The Indicator from Planet Money - Why Your Internet Sucks

We answer two questions today: Why is American internet so bad? And why was the unemployment benefit extension set at $600?

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This is the indicator from Planet Money. I'm Patty Hirsch and you're stuck with me today because Stacey Vanek Smith is hosting All Things Considered this week and Cardiff Garcia. Well, I'm not sure where Cardiff is it summer while they're away. I'm going to answer some of our listener questions for the health of our producers and one question that comes up regularly in one form or another is one that I find myself asking at least once a week. Why does our internet suck so badly, but I can understand if you live in a rural area where you know is inevitably patchy service, you know, it's hard to connect people but 80% of the people in the US live in urban areas are all clustered together, which means we should be easy to service right and yet our internet sucks to why is that produce a Camille Peterson looked into it? If you've got a broadband internet connection, you're actually pretty lucky a big portion of Americans don't have access to broadband.

At all, your problem is competition your Internet sucks and there's nowhere else for you to turn to no other internet providers. You could just switch over to that lack of competition is an enormous problem in the u.s. Internet Market to understand how we got here. We have to go back to the 1990s. That's when the two main sources of broadband today phone and cable companies got in the internet game really huge amount of competition for Christopher Ali is a media studies professor at the University of Virginia. He says back then phone companies started using their existing wires to provide internet service and they were required by law to lease those wires to smaller competitors. But in 2005 that leasing requirement went away, which basically was the end of that competition because I'm me all these companies went under because they didn't own any of the infrastructure.

The phone company's what about the other big provider of Broadband cable companies? There was actually a lot of competition in the cable Market back in the nineties to but the Telecommunications Act of 1996 made it easier for cable companies to consolidate with a 96 act allowed was for companies to gobble up all those tiny Cable Systems in mm. The big remaining cable companies made handshake deals with each other companies were basically trading off areas. They wouldn't compete Time Warner Cable might have Minneapolis. But Comcast has Philadelphia and I knocked him has New York Mets ball basically agreed to stay out of each other's neighborhood who has deals are honored to this day, which means there's also almost no competition among cable companies to provide internet and you may be thinking okay.

But what about antitrust law can't that step in and make these companies compete the Comcast Monopoly, but if you drill down to the individual markets you start to see these kind of local monopolies exist. Christopher says antitrust is done at the national level. So if there's no government agency enforcing internet competition, but you may wonder why these companies are not trying to break these handshake deal is and compete anyway, or why smaller companies and startups don't get into the market Christopher says it's because of the cost it is so incredibly expensive to lay down wires now like the literal infrastructure Casa Capital Investments too much right now Christopher actually took a road trip across the u.s. To get a sense of what the internet looks like here and he discovered a bunch of towns and cities experimenting with her.

Make the internet better like towns that fund their own high-speed networks, and then allow lots of private companies to deliver service using those networks. But he says at the national level there is a very intrinsic system for how internet works. It's been crafted through policy and corporate decisions over decades and is probably not going away anytime soon.

Pictures of Camille Peterson and if you're interested in learning more about how smaller cities are making their own internet are cousins of Planet Money have a great show on the topic. You can find links in the show notes on our webpage make another great question answered after the break

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Democrat and Republican lawmakers are still tussling over the $600 a week extension to unemployment benefits in a nutshell Democrats a the extra funds are critical for the unemployed and it dates for the Republican say the money could remove the incentive to return to work for some people are listening to have a lot of questions about all of this but one that keeps on coming up is why $600 such a wrong number right producer Darius rafie and has the answer when Congress was debating the care Zach back in March people were trying to figure out how much additional unemployment the government should give to the millions of people who have lost their jobs Michelle Evermore the senior researcher at the national employment law project says that one idea was to just give people exactly as much money as they been making before the pandemic a lot of people including me or calling for 100% income replacement. However, trying to do that is technically infeasible infeasible because the computer says

Seems that many state unemployment offices run on simply can't handle calculating in percentage terms. Michelle has traveled the country visiting unemployment offices and she's spoken with State officials about their computer systems and what she's found is not exactly reassuring State unemployment insurance. It is incredibly Antiquated. It's based on largely 1970s COBOL Mainframe, there's only 16 states that have completely upgraded from those mainframes. And even those new modernize systems aren't necessarily all that modern. That's right many of these crucial government agencies, which are the first line of defense against the economic Devastation wrought by the pandemic are using computer systems that may have been built more than 40 years ago part of the reason for this says Michelle is that unemployment office administrative budgets are an easy thing to cut when the economy is good and there aren't a lot of claims to process. She says admin budgets and unemployment offices are lower now in

Absolute terms than they were in 2001 and that made it extra difficult for unemployment offices to tackle the flood of new claims that poured in during the early weeks of the pandemic making claims was historic. So the highest amount of new claims in history was 695000 in 1982, but we saw a 3.3 million new claims the first week and then 6.6 million claims 6.6 million claims over 5 million, but they're still processing over 2 million claims. They're still processing more than twice as many claims is the highest point in history given the scale of the crisis and the lack of resources at state unemployment offices lawmakers came up with an alternative solution rather than a percentage which was impossible to calculate they would go with an average. So they took the average weekly wage before the pandemic which was about $900 and then I took the average unemployment benefit which was about $300 and

Attracted 300 from 900 and they got six hundred so they said give everyone $600 a week and that gets everyone who lost a job up to the average weekly wage. But of course some people were making more than the average wage before the pandemic. Some people were making a lot less. So the system isn't perfect. But until we can bring our unemployment infrastructure into the 21st century. It may be the best we can do.

Pictures of Darius Ruffian who recently Departed the indicator to join the night budget fellowship at Columbia University. We wish him the very best. If you'd like to ask us a question. You can reach us on Twitter or Instagram or email indicator on NPR. Org. We'd love to hear from you. This episode of the indicator was produced by Britney Cronin an edited by me Patty Hirsch. The indicator is a production of NPR.
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