Feb. 5 (Bloomberg) -- In Stockholm late last year, I met Daniel Khilgren Kallander, a 22-year-old who is very excited about his future career in virtual-reality design. To give me a sense of the possibilities, he strapped plastic goggles over my eyes and sent me on a roller-coaster ride, plunging me into a fully immersive virtual experience that involved some terrifying drops. Take it from me: Your brain is easily convinced that you really are wherever the screen suggests you are.
In the future, when those big goggles have evolved into micro-thin surfaces, virtual-reality businesses will need very-high-capacity fiber-optic Internet networks to keep up with the demand for immersive digital interactions.
This is why it was so discouraging last week when a bill that would bar cities from working with private companies to build their own fiber-optic networks was introduced in the Kansas Legislature.
It was a classic example of powerful incumbent businesses trying to protect their turf. Although the bill was offered with no named sponsor, Ars Technica quickly figured out that it had been drafted by the Kansas Cable Telecommunications Association, a lobbying group that includes Comcast Corp., Cox Communications Inc. and Time Warner Cable Inc.
Luckily for economic growth in Kansas, other businesses quickly organized to block the bill, and the lobbying group now says the bill needs some “tweaking of language.” (And I thought legislators were the ones who draft and revise legislation.)
Better to dispose of the bill altogether. Daniel’s plans for the virtual-reality future illustrate why. Very-high-capacity networks foster new ideas and new jobs. And these will be hampered in the U.S. unless the current system is shaken up. At the moment, when it comes to fiber-optic connections, we’re in the middle of the pack of developed nations, according to the Organization for Economic Cooperation and Development.
Americans also pay more for high-capacity connectivity than people in any country other than Chile, Turkey or Mexico do.
Given the power of the local cable monopolies in the market for high-speed Internet access, we’re stuck at a plateau of second-best cable service (compared with fiber-optic) and high prices. The best way to improve is for cities to build their own fiber-optic networks.
Cities need not be involved in selling services to consumers, but they can lay the groundwork to allow fierce competition by retail fiber-optic businesses.
Cable industry leaders know that independent fiber-optic businesses would break cable’s grip on the U.S. market. Hence, the legislation introduced in Kansas -- and similar laws already passed in 19 other states.
Left to their own devices, the local cable monopolies won’t provide fiber-optic networks. But without them, Americans won’t be able to keep up with Daniel in Stockholm.
(Susan Crawford, the John A. Reilly visiting professor in intellectual property at Harvard Law School and a fellow at the Roosevelt Institute, is the author of “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age.” Follow her on Twitter at @scrawford.)
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