The need for speed: why is the United States still waiting for the future to download?

• Author: Thompson, Nicholas
• Position: SPECIAL REPORT ON ENTREPRENEURSHIP - Broadband internet connection

Broadband Internet in the United States is a disaster. It's appalling. It's embarrassing. It's preposterous. Compared to the rest of the world, our connections are slow, balky, and expensive. If you divide speed by cost, Australia's Internet access is three times better than ours; France's is nine times better; and Japan's thumps us twenty-one times over. We're catching fish with our hands, while they are out in trawlers. And the reason doesn't have to do with anything intrinsically American. It's not, for example, that the country is too rural. Broadband stinks even in Chicago. The problem is almost entirely a failure of policy and of imagination.

Our tortoise-like downloading isn't just a problem because it means YouTube videos buffer and stall: it means we're missing out on a whole generation of useful technology. Doctors in a Tokyo hospital routinely examine tissue samples from patients in rural areas, using high-definition video and remote-controlled microscopes. In South Korea, it is so easy to share files and upload video that a whole mini industry of video tutors has flourished. According to a report published recently by the Information Technology and Innovation Foundation, the teachers who provide the best test-prep lectures have become national celebrities.

Americans should be envious, but also worried. The countries that deploy ubiquitous high-speed broadband first are the countries that will develop the tools to use it. America built the world's first computers, and then along came Microsoft. America pioneered the Internet, and along came Google. It's hard, however, to imagine that the technologies of the future will be hatched here. In 2001, the first year that the OECD recorded data, the United States ranked fourth in the world in a metric measuring broadband cost, speed, and penetration. Now we rank fifteenth, and are dropping steadily.

America's problem starts with one fact: we have a total lack of competition. In most places, you can only get broadband through your cable company or through the DSL your phone company sells. Both industries have recently gone through merger madness, meaning that there is not only minimal competition between industries, there's minimal competition within industries. You're basically locked into one of two bad options. The government tried to solve this problem in the 1996 Telecom Act, which required the incumbent monopolists to lease their infrastructure to competitors. But the law wasn't...