It’s not just Canadians. Koreans are two and a half times as likely to have broadband connections as US households (57% vs. 23%). (See also Part 1 and Part 2)
Korean DSL connections are not only half as expensive, they are a lot faster, especially upstream.
Drawing conclusions about Americans from Korean behavior is riskier than using Canadian behavior, but it seems pretty obvious that the telcos the the main obstacle to widespread adoption of broadband. And I find it hard to believe they can’t make money at $25/month by lighting up wires that are already in the ground.
Korea’s secret? Encouraging competition with the monopoly provider. Didn’t we try that?
The United States has gone through a similar shakeout, except it happened before the broadband network was extensively built. The Telecommunications Act of 1996 set off a surge of expansion that collapsed when the Internet bubble burst, driving many of the broadband start-ups, like Rhythms NetConnections and NorthPoint Communications, out of business. While fixed-line operators in Korea and Japan were cajoled into making D.S.L. service available at low cost, analysts say that the Bells are reluctant to cut prices.
At around $50 a month, broadband costs about twice as much in the United States as in Korea and Japan. Worse, broadband in the United States is slower and less suited for interactive entertainment and other two-way uses because it relies on an asymmetric system that receives data much faster than it can send it.
The Bells say they are doing everything they can to promote broadband. But critics say the phone companies view broadband as more of a threat than an opportunity, so they have done little to rectify these problems.
We also failed to enforce the Telecommunications Act, allowing the Bells to starve their competitors.
The current broadband market is a drag on the economy. Billions of dollars in consumer investment in computers, peripherals, software, networking, downloadable music, and content are being held back back because of the low penetration and poor quality of our current broadband connections.