How is it that South Korea can have both a faster average Internet speed and cheaper Internet connections than the United States? The Motley Fool investigated this seeming conundrum, and found some interesting answers. Part of the problem is physical. South Korea is one of the most densely populated countries in the world, and a huge percentage of its population lives close to local switching stations. In contrast, the U.S., with its widespread suburban sprawl, has many more households situated far from switching stations, which results in slower Internet speeds.

As for the descrepancy in pricing, the natural monopolies created by domestic telecoms and their hard-to-duplicate networks are partly to blame. In South Korea, the government forced telecoms to sell access to their subscribers on a wholesale basis, which allowed independent ISPs to offer varied and competitive price and service tiers without having to build up their own connection networks. Unfortunately for Americans, the price to wire up far-flung suburbs and rural areas is simply higher than that of more crowded countries, and even if more competition were introduced, the costs would remain close to current levels, although customer service would likely improve.

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