Not doubting the omnipotence of the free market – just questioning whether there’s a solution that might lead to a better result, faster. 😉
It’ll eventually work out – despite there being some barriers to market entry. In European countries the problem isn’t as widespread as it is in the US – because people live closer together thereby making this stuff more profitable. In the US – well, not so much. Tough shit for people living in rural areas, to some extent.
There are certainly some areas where the government’s partly responsible for the current situation – mainly where it restricts access for some more important reason (helping the poor, ensuring access for everyone – and doing so by giving some company a monopoly plus forcing them to do what is considered in society’s best interest). Seriously though – there’s less and less justification for that. As can be seen by pretty much everyone – telecommunications is a very profitable business and I don’t see why people living in fucked up areas should be subsidised by the rest. In the end, that’s only part of the problem though.
As that Economist article I linked to in the original post pointed out (and as you mentioned again), it takes a whole lot of capital to build your own infrastructure. While there certainly are plenty of companies who have the kind of money it takes, most of them aren’t interested in entering the market. So yeah, we’re pretty much stuck with the situation we have right now – whether we like it or not. It’s certainly not a horrible situation but as some countries illustrate, it could be better (though I’m not exactly sure whether there won’t be unintended consequences down the road).
Anyway – to get back to the issue of net neutrality (where this initially started, remember? 😉 ): still undecided on this end. Google certainly would never have gotten this big if it weren’t for net neutrality – but then again, is that really such a good thing? What about Web 2.0? It isn’t really making any money so far and giving up net neutrality would almost certainly break its neck…