State of the Union, Part 1: Obama’s Push to Break Internet Monopolies

In yesterday’s State of the Union speech, President Barack Obama announced his support for an expansion of the federal role in promoting competition for internet service at the local level. This follows Obama’s support for “net neutrality” in late 2014, with the goal of regulating the provision of internet service in favor of consumers.

A week before the address, the White House released “Community-Based Broadband Solutions: The Benefits of Competition and Choice for Community Development and High-Speed Internet Access,” a report detailing the disparities among states and between rural and urban areas in the availability of download speeds of at least 25 Mbps, which the report claims nearly 51 million Americans cannot purchase today. The report cites data showing that for yearly internet plans at every level of speed, prices are higher in select US cities than in a sample of foreign cities. The report alludes to multiple studies that show that competition among internet providers pushes prices down and service quality up.

Internet providers have vigorously protected their monopoly ownership of the physical infrastructure for broadband, arguing (as AT&T did last year before the Federal Communications Commission regarding two municipal broadband projects) that they have invested billions in building out the systems that exist, and that publicly imposed competition would discourage further investments by the private sector for continued build out. The crux of the Obama initiative is to urge the FCC to expand its reach and overrule local and state laws that protect incumbent providers — laws that often reflect the political influence of these large companies in the areas they serve.

Even if greater competition does take hold, America will still face a “digital divide” that may require policy intervention to address. The Google Fiber project in Kansas City, which aims to offer households across the city service of up to 100 times the current speed, has highlighted the economic and educational “divide” that remains between higher- and lower-income households.

Beyond access may lie yet another “divide,” one that has already emerged in American politics as access to information has increased, allowing information sources to become more fine-grained and polarized. One draft paper projects that if all states acted to maximize information access through internet service competition, partisan animus among the population would increase by two percent. If that’s true, resolving the internet access debate could wind up sharpening debate on just about everything else.

Feature Photo: cc/(Bill Dickinson)