Mignon Clyburn's Courage

Federal Communications Commission member Mignon Clyburn gave the keynote at the FCC/Newseum praising the plan's National Digital Literacy Corps. Well and good, she said the next day, but nothing affects the poor more than the price.

In a D.C. bombshell, Clyburn tore into the carriers for sabotaging U.S. broadband with higher prices. Comcast, AT&T, and Verizon have just announced $500M in broadband price increases. The cost of providing broadband continues to fall. Wall Street pegs margins at 80%. But the cablecos and telcos are mostly competing on how quickly they can raise prices, and wireless will never be more than a partial substitute. The solution isn't easy, because the cost advantages of scale probably will prevent any strong competitor emerging.

Economists don't have answers for what to do when competition is weak other than some exercise of government power, but traditional regulation is no panacea. Hard decisions are needed, however, unless the U.S. is comfortable with an overpriced and occasionally inferior Internet.