Tuesday, October 29, 2013

Paying through the nose

"Americans pay so much because they don't have a choice," says Susan Crawford, a former special assistant to President Barack Obama on science, technology and innovation policy. Although there are several national companies, local markets tend to be dominated by just one or two main providers.

"We deregulated high-speed internet access 10 years ago and since then we've seen enormous consolidation and monopolies, so left to their own devices, companies that supply internet access will charge high prices, because they face neither competition nor oversight." Two-thirds get their broadband via their television cables, she says, because the DSL (digital subscriber line) service provided by phone companies over copper lines can't compete with cable speeds, while wireless and satellite services are subject to low usage caps.

For Susan Crawford, author of Captive Audience, higher prices have created a digital divide which excludes poor Americans from quality internet access. And there are economic implications too. "The 2008 banking crisis demonstrated what happens when we allow banks to act out of pure self interest. The communications crisis in America is less visible but also destructive of America's ability to function on the global stage." Like electricity, she says, internet access should be available equally to all at reasonable prices so that every other sector of US industry and society can flourish.

Rick Karr, who made a PBS documentary in which he travelled to the UK to find out why prices were lower, says that the critical moment came when the British regulator Ofcom forced British Telecom to allow other companies to use its copper telephone wires going to and from homes.

But US regulators took a different approach. Rather than encouraging competition between operators using the same network, the US encouraged competition between different infrastructure owners - big companies that could afford to build their own networks.
Why is broadband more expensive in the US? (BBC)

Health care, higher education,  broadband service, cellphone service, why do Americans pay so much more than the rest of the world for nearly everything(except gas)? Clearly the answer lies in the collusion between government and corporations. How much longer can the sheep be fleeced by the wolves?

And continuing on from our last post about Neofeudalism in the U.S., here's the latest episode of Congressional Dish:

Now that the government is back up and running and the American public has looked away, the House of Representatives got back to work privatizing our government. H.R. 3080 takes the first steps towards privatization of water projects typically done by the Army Corps of Engineers, using entirely fixable budget issues as the justification.

The Corps of Engineers is in charge of the nation's infrastructure. Selling that off is game over as far as I'm concerned. Note also that the funding for their work has not increased since the 1980's and they refuse to raise taxes on the users to an adequate level to pay for the upkeep. Finally, note how they're eliminating redress through the court system (um, is that a Libertarian principle?) Listen and weep.

Finally: California’s New Feudalism Benefits a Few at the Expense of the Multitude (Daily Beast):
As late as the 80s, California was democratic in a fundamental sense, a place for outsiders and, increasingly, immigrants—roughly 60 percent of the population was considered middle class. Now, instead of a land of opportunity, California has become increasingly feudal. According to recent census estimates,  the state suffers some of the highest levels of inequality in the country. By some estimates, the state’s level of inequality compares with that of such global models as  the Dominican Republic, Gambia, and the Republic of the Congo.

At the same time, the Golden State now suffers the highest level of poverty in the country—23.5 percent compared to 16 percent nationally—worse than long-term hard luck cases like Mississippi. It is also now home to roughly one-third of the nation’s welfare recipients, almost three times its proportion of the nation’s population.

Like medieval serfs, increasing numbers of Californians are downwardly mobile, and doing worse than their parents: native born Latinos actually have shorter lifespans than their parents, according to one recent report. Nor are things expected to get better any time soon. According to a recent Hoover Institution survey, most Californians expect their incomes to stagnate in the coming six months, a sense widely shared among the young, whites, Latinos, females, and the less educated.

The state’s digital oligarchy, surely without intention, is increasingly driving the state’s lurch towards feudalism. Silicon Valley’s wealth reflects the fortunes of a handful of companies that dominate an information economy that itself is increasingly oligopolistic.  In contrast to the traditionally conservative or libertarian ethos of the entrepreneurial class, the oligarchy is increasingly allied with the nominally populist Democratic Party and its regulatory agenda. Along with the public sector, Hollywood, and their media claque, they present California as “the spiritual inspiration” for modern “progressives” across the country.

The gap between the oligarchic class and everyone else seems increasingly permanent. A critical component of assuring class mobility, California’s once widely admired public schools were recently ranked near the absolute bottom in the country. Think about this: despite the state’s huge tech sector, California eighth graders scored 47th out of the 51 states in science testing. No wonder Mark Zuckerberg and other oligarchs are so anxious to import “techno coolies” from abroad.

As in medieval times, land ownership, particularly along the coast, has become increasingly difficult for those not in the upper class. In 2012, four California markets—San Jose, San Francisco, San Diego, and Los Angeles—ranked as the most unaffordable relative to income in the nation. The impact of these prices falls particularly on the poor. According to the Center for Housing Policy and National Housing Conference, 39 percent of working households in the Los Angeles metropolitan area spend more than half their income on housing, as do 35 percent in the San Francisco metro area—both higher than 31 percent in the New York area and well above the national rate of 24 percent. This is likely to get much worse given that California median housing prices rose 31 percent in the year ending May 2013. In the Bay Area the increase was an amazing 43 percent.

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