Obama's 'US-Ignite' Broadband Plan Ignites Nothing

Internet access in the U.S. is lousy. So the Obama administration yesterday announced "US Ignite," which is supposedly a strategy to make the Internet "100 times faster" by developing a one-gigabit network backbone between cities and universities.

That's nice, but the government is frosting a plate without a cake on it. The broadband crisis in the U.S. is about slow, expensive connections in the "last mile" to people's homes, not about backbone capacity and 3D medical imaging. The government could do something about that, but it won't.

You've heard the stats before. According to the OECD we're fifteenth of 34 developed countries measured when it comes to home, wired broadband penetration. (We do better at 7th place with wireless broadband, but I'll explain later why that doesn't matter.) Depending on the study cited, we're also at the middle or bottom of the pack when it comes to prices. Not exactly the leaders of the free world.

Before you complain that this is because we have rural areas, yes, it's an often-cited stat that 18 million Americans don't have access to broadband. But that's only 6 percent of the population. It's a much bigger problem that the other 295 million Americans have lousy broadband choices that make us look second-rate.

The Real Broadband Crisis
The Economist put it best: there is one reason broadband is slow and expensive in American cities. (Notice I'm saying "cities" here; rural areas have their own challenges.) It's just lack of competition. That's it. One reason. Really basic economics.

It's terribly expensive to build Internet cable out to an entire city. So nearly every other civilized country in the world requires some sort of compromise where multiple companies can compete while using the same physical broadband lines. The U.S. doesn't, so most Americans have at most two broadband choices: a sclerotic cable company with a locked-in municipal monopoly, and a fading DSL provider with declining interest in laying down fiber.

For a brief moment we thought fiber-to-the-home might be an alternative, but then we saw that Verizon would rather make cozy deals with the cable companies not to compete than do the hard work of laying down cables.

Meanwhile, the incumbent providers have done their best to slap down any potentially disruptive new entrants by doing things like convincing 14 states to ban municipal broadband networks.

There's a funny bit on the US-Ignite website where it promotes Chattanooga, Tenn. as "the country's first and only 1-gigabit-per-second Internet network … owned by "the city's publically owned electric power system" (video below). Yep, the fastest network in the country is muni broadband, but you probably won't be able to get that. It might be competition. (Google Fiber, , also qualifies as the oft-banned muni broadband.)

I'm also a little giggly about the "Mozilla Ignite" challenge, a related competition where startups can win prizes for coming up with applications for 1Gbps networks. I guess none of those applications will assume any endpoints in homes.

Backers of our current system point to our wealth of 4G options, which are great as long as you don't actually want to use the Internet much at home. AT&T estimates that each of its home broadband customers used, on average, 21GB per month. That amount of 4G would cost $190 per month on Verizon and $250 per month with AT&T. Not exactly competitive.

US Ignite's nod towards the real broadband problem in America - the last mile - comes in an order for federal agencies to include Internet cables when they build new roads. This is common sense. It also, once again, does absolutely nothing to fix our problems. Our set of non-competing broadband providers will take those lower costs and turn them into shareholder profits at the expense of consumers.

US Ignite is all smoke and no fire. Until the Obama administration decides to enforce competition in broadband, our Internet connections will continue to be expensive and slow.