Why is American broadband so lame? Robert Cringley sees one failure point being telcos and the Telecommunications Act of 1994. In short, the Act asked states to contract with telcos… and none managed to do so. So that broadband angle failed, while telcos collected fees.

There are no good guys in this story. Misguided and incompetent regulation combined with utilities that found ways to game the system resulted in what had been the best communication system in the world becoming just so-so, though very profitable. We as consumers were consistently sold ideas that were impractical only to have those be replaced later by less-ambitious technologies that, in turn, were still under-delivered. Congress set mandates then provided little or no oversight. The FCC was (and probably still is) managed for the benefit of the companies and their lobbyists, not for you and me. And the upshot is that I could move to Japan and pay $14 per month for 100-megabit-per-second Internet service but I can’t do that here and will probably never be able to.

Cringley is careful to identify this as not being a technology failure:

This could all be credited to technology misadventure and forgotten if it weren’t for the money. The telcos played games with state utility commissions, cutting deals with the states to deploy new technologies in exchange for “incentives,” which were new charges and new ways of charging customers. One typical ploy was to offer to freeze basic telephone rates for a period of years (typically five) then deploy a bunch of new services, which would be sold on an a la carte basis. The problem with this is that it applied analog economics to what were now digital services. The cost of providing digital services is always going DOWN, not up, so the telcos that might have been forced to cut rates instead offered to freeze them, locking in an effective multiyear rate increase.