Free choice?
ZDNet columnists Dana Blankenhorn and Paula Rooney ("Rebuilding a competitive Internet market", 10/22/07) react to an online comment that spouts the usual free market mythology. The commenter wrote about Internet services and complaints about them: "The only way to deal with companies not providing you with the service you want is to boycott them. They have a right to run their ISP any way they want just as long as they are upfront with their intentions and they do not break any laws."
Blankenhorn and Rooney point out that AT&T and Verizon between them control almost all of the US Internet backbone, and there are only a few more high-speed Internet providers, mostly cable companies like Comcast and Cablevision. In the US, few consumers have a choice between more than two broadband suppliers. As they point out, "a decade ago there were about 14,000 ISPs in served by slick magazines such as Boardwatch. I don't know how many there are today. But for most of us it's only two."
So the idea that when crappy service from Internet providers, a typical users has very little choice - and the competitor is often just as bad. Worst of all, it gives the local duopoly very little incentive to make major improvements in technology or reductions in price. In spite of major increases in Internet speed in the competitive European market and big changes in available technology, "The real speed offered to U.S. broadband customers hasn't really increased in a decade."
They only err in calling the duopoly a "monopoly," but their analysis is right on. An oligopoly can offer false alternatives while exerting themselves no amore than they have to deliver services, and customer have no power to boycott (unless they want to go back to dial-up Internet).
5:33:19 PM 
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