The case for strong government rules to protect an open Internet rests in large part on a perceived market failure — the lack of competition for high-speed Internet service into American homes.
The Federal Communications Commission is expected to adopt on Thursday utility-style rules to ensure so-called net neutrality, prohibiting practices like offering pay-to-play fast lanes on the Internet. A legislative response by Republicans on Capitol Hill has stalled out.
The F.C.C.’s approach makes sense, proponents say, because for genuine high-speed Internet service most American households now have only one choice, and most often it is a cable company.
“For the moment, cable has won the high-speed Internet market,” said Susan Crawford, co-director of the Berkman Center for Internet and Society at Harvard Law School, and a former adviser to the Obama administration.
The new rules will not ensure competition from new entrants, ranging from next-generation wireless technology to ultrahigh-speed networks built by municipalities. Instead, strong regulation is intended to prevent the dominant broadband suppliers from abusing their market power.
Three-quarters of households have the choice of only one broadband provider while only a quarter have at least two to choose from.
The share of homes with
broadband providers
available at each speed
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Dozens of cities across the country are working to set up their own municipal broadband networks. The goal is typically to own or subsidize construction of broadband networks with fiber directly to the home, at speeds of up to a gigabit per second, or 1,000 megabits. To further these projects, resource sharing and education organizations have been established, like Next Century Cities.
Google is helping to provide an alternative, with Google Fiber. It is building out gigabit networks in Austin, Tex.; Kansas City, Mo., and Kansas City, Kan.; and recently moved into Provo, Utah. Other cities will be added, Google says.
Opponents of Mr. Wheeler’s plan, which would place Internet service under a pared-down version of Title II, a regulatory regime devised for common carrier phone companies, point to Google Fiber as a success story of regulatory restraint.
Cities have lured Google Fiber with promises of minimal regulation and ample subsidies as incentives to invest. “The broadband market isn’t perfect, but it’s working pretty well,” said Larry Irving, a former Commerce Department official in the Clinton administration, who helped shape Internet policy in the 1990s.
“I think the key is to give people incentives to compete rather than trying to create competition through regulation,” said Mr. Irving, co-chairman of the Internet Innovation Alliance, a nonprofit group whose supporters include telecommunications companies and community organizations.
The city-by-city broadband initiatives, analysts say, are encouraging, but it is not clear how far such programs might spread. Local budgets are tight, and the experience so far is mixed.
“Municipal is the only way you’re going to get competition, but it’s not going to be as much as many people think,” said David J. Farber, a professor of computer science and public policy at Carnegie Mellon University, and a former chief technologist at the F.C.C.
“I wouldn’t sell my stock in Comcast,” Mr. Farber said, “if I had any, which I don’t.”
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