Silicon Valley fails to deliver us to broadband paradise

FACEBOOK is building drones that will beam WiFi to rural Africa. Google is laying down fiber lines to connect homes and businesses in Kansas City and Atlanta.

And now Amazon is thinking about adding broadband to the palette of services it sells in Europe with its customer loyalty program, Prime.

It’s enough to feed a collective fantasy that Silicon Valley derring-do will fix the shabby and overpriced broadband that plagues many users. Unfortunately, the dream of cheap and fast broadband for all remains just that in much of the world.

In the US, the dominance of a handful of cable and telecoms firms leaves most Americans with few choices for broadband. As a result, Americans pay more than people do elsewhere, often for an inferior product.

The picture is better in places like Japan and Korea, where governments subsidised construction of fast fiber networks, as well as across Europe, where regulators require the largest telecoms companies to rent access on their fixed lines to competitors.

Surely the big brains at Google and Amazon can solve this problem? They certainly have the means.

The early signs aren’t good, though. Google has seemed uncertain about its commitment to its six-yearold Google Fiber project to build high-speed broadband networks and to its intriguing low-cost mobile service called Project Fi. Google Fiber had revenue of roughly $100 million (R1 billion) last year, according to reports, which was about 0.1 percent of total revenue last year for Google’s parent company.

In the US, nothing requires the telecoms and cable companies that own the internet networks to open its pipes to anyone. About 61 percent of Americans have access to one or fewer choices of home providers that offer zippy broadband service, according to the Federal Communications Commission’s definition. Mobile internet access isn’t much more competitive, with Verizon and AT&T holding a firm grip on the mobile market.

Bolstering investment in networks is a real issue, and tech companies aren’t the answer (yet). Maybe that will change, but Silicon Valley doesn’t seem willing to deliver us to broadband paradise. – Bloomberg