It’s been the fall follies in U.S. ISPs. Two major ISPS (Level3 and Cogent) depeered each other. SBC raises DSL prices and brags about how it’s going to charge companies that want to use its bandwith for fast applications:

How concerned are you about Internet upstarts like Google (GOOG ), MSN, Vonage, and others?

How do you think they’re going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes?

The Internet can’t be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! (YHOO ) or Vonage or anybody to expect to use these pipes [for] free is nuts!
— At SBC, It’s All About "Scale and Scope" CEO Edward Whitacre talks about the AT&T Wireless acquisition and how he’s moving to keep abreast of cable competitors, BusinessWeek, 7 November 2005

Meanwhile, back in Japan, NTT and others provide the pipes, and multiple application providers provide VoIP, video, and numerous other services on top of them. End-user speeds in Japan are typically 50 megabits per second over DSL, with 100 megabits per second available over fiber to the home (FTTH), both at prices less than what the average U.S. DSL customer pays. Why can Japan (and Korea) do it while the U.S. can’t?

Hint: the answer is not population density, nor government subsidies.