What happened to America’s Internet lead? Bad policy. Specifically, the United States made the same mistake in Internet policy that California made in energy policy: it forgot — or was persuaded by special interests to ignore — the reality that sometimes you can’t have effective market competition without effective regulation.Krugman reminds us that as recently as 2001 the U.S. was far ahead. And then he gets specific.
You see, the world may look flat once you’re in cyberspace — but to get there you need to go through a narrow passageway, down your phone line or down your TV cable. And if the companies controlling these passageways can behave like the robber barons of yore, levying whatever tolls they like on those who pass by, commerce suffers.
— The French Connections, Paul Krugman, New York Times, 22 July 2007
And when the Bush administration put Michael Powell in charge of the F.C.C., the digital robber barons were basically set free to do whatever they liked. As a result, there’s little competition in U.S. broadband — if you’re lucky, you have a choice between the services offered by the local cable monopoly and the local phone monopoly. The price is high and the service is poor, but there’s nowhere else to go.Ah, but it’s only that old bleeding heart liberal Krugman. And he’s praising the French!
Well, maybe he should praise the Russians. At least they seem to have learned that putting political commissars in charge of running the economy according to political ideology leads to economic ruin.