Small pipes part 2

The fact that almost everyone outside of Japan and Korean gets screwed on broadband speeds and prices is one of my favorite topics. I've had reason to think about the situation since the Verizon FiOS TV roll out in the Philly area but not in Philadelphia. Of course part of the reason Verizon hasn't rolled out the service in Philadelphia is because of issues over franchise fees as in Chicago. With the change in the congress we might see movement on NetNeutrality and statewide franchise agreements. Basically, municipalities prefer to negotiate with telecoms for franchise fees to offer programming. This allows a large municipality such as Philadelphia or Chicago make a lot of money in fees and taxes. Telecoms don't like this because it cuts down on profits. Statewide or federal franchise agreements allow telecoms to maximize profits and can speed up the roll out to some areas. The potential problem is that there may not be franchise agreements to carry local stations or to provide community services that municipalities can barter out of tlecoms.

An article that I read on Ars lays out what I've noticed over the years, there is more competition but the prices are increasing instead of getting lower. This makes sense for the reasons pointed out in the article that it is hard to move from one service to another. That is assuming that one even has a choice which a lot of people do not. My brother recently dropped Comcast after getting tired of their crappy service and high prices. For example, his old house was about twenty yards from a regional office where the trucks came from for installations but he had to wait nearly a month for a sometime between 9 and 5 installation. He's going with Verizon's FiOS but I live in the city and am thus screwed. Frankly, FiOS is overpriced in the greater scheme of things when one can get 100 MBPS in Japan and Korea. There are some differences in taxes and culture but the biggest thing is there is no real competition.

The Brand X decision is partly to blame and an inept FCC deserves a lot of blame as well. From an economic standpoint what the telecoms are doing makes perfect sense. If you can deliver the same product for more money why wouldn't you? Even the incremental increases of 1MBPS for the same price in the face of competition is rather insulting since they could go even faster. Of course profits would only remain steady doing that.