Government get your hands on my telecommunications!

Over the weekend, the wind blew hard and I lost my internet connection. Today, a calm and sunny day, I lost power and internet (again). The outages are short but nonetheless frustrating. They are usually accompanied by a drop in 3G service as well. While my internet is being finicky, the FCC is hoping to make more spectrum available without a license , which would make wifi available to more people. This announcement was naturally met with suspicion from the telecom giants.

This news has created a lot of buzz about “free wifi” (not happening). It has also renewed a lot of latent frustrations in my household. Specifically, a frustration about how much we pay for inferior telecom products. Having been fortunate enough to live and travel overseas I know that it doesn’t have to be this way. We pay over $100/mo for two cell phones that can only talk and text. When we lived in East Timor (the poorest country in Asia) we paid significantly less for this same technology, less than $50 combined. There were no contracts. You paid for the phone and then you paid for services as you used them. When we lived in East Timor (5 years after they got their independence), there were lots of places with no reception. But, rumor has it, most of the country now has reception.

My husband can’t even drive 45 minutes from his office to our house, in a minor metropolitan area, without losing signal at least twice. Ok, Timor is smaller than America so it is easier to cover the whole nation. What about China? When we visited a portion of the great wall (in the middle of nowhere) there were tourists posting photos to Facebook from their smart phones. My Chinese friends often complain about our slow networks and poor coverage. What is America doing wrong? Aren’t we supposed to be the greatest?

We aren’t because we don’t have nationalized telecommunications. Unlike land lines, there is no requirement that internet and wireless service providers serve everyone. Meaning, you only get services if it is profitable for the companies to provide these services to you. Comcast has little or no incentive to invest in the costly infrastructure necessary to improve our internet connection. Sprint doesn’t care if I can make a phone call in Mississippi or not; because not enough people are trying to make phone calls from Mississippi to warrant an investment in additional towers. This is why public utilities (electricity and water) are public; because otherwise most of Mississippi and Alabama would still be using candles and outhouses.

Compare this to East Timor. One public company has a monopoly over the infrastructure, so basically the state maintains the wireless infrastructure much like it maintains the roads. This is similar to how public utilities work in the US, one company provides electricity for an area and their profits are limited so that consumers aren’t gouged for services necessary to ensure a basic standard of living. The utilities are required to service everyone equally.

So why don’t we have a public monopolies over telecommunication infrastructure? Well, because we have private ones. On my to-read list are two books: David Cay Johnston’s “The Fine Print”  ( recommended by Terry Gross) and Susan Crawford’s “Captive Audience” (featured on a lively Diane Rehm show). Both of these books explore why we pay more for less when it comes to internet and phone service, and the answer is private interests. Privatizing the nation’s infrastructure needs, means we pay more for less and deprive the government of revenues–roads are a great example.

It comes down to what you think the role of the state is. I believe the role of the state is to guaranty the basic infrastructure necessary to be economically competitive and maintain a modern standard of living. The state should provide access to affordable electricity, water, and education; efficient and quality transportation options; and competitive communication technology. Who benefits when we price people out of these things? Not the people that entered into the social contract with the state, but the companies crying for free market principles while engaging in monopolistic practices.

Good things happen when the state gets its hand on telecommunications, see Chattanooga. Bad things happen when you privatize services necessary to succeed in the modern world, see Enron’s role in the California energy crisis.


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