Mapping the Internet: Wiring America

July 16, 2012, 9:00 AM UTC

Laying fiber-optic cable in Lac Qui Parle county in western Minnesota

FORTUNE — The Internet was born in the U.S., but we can hardly claim to have the greatest percentage of citizens online (in fact, we are 23rd, behind Slovakia). Why is that? We’re accustomed to thinking the problem is the “last mile,” meaning the connection between our phone or cable company’s office and our homes. But that’s only part of the story. Just as important is the “middle mile,” meaning the connection between your Internet service provider (ISP) and the rest of the Internet. If you don’t live in or near a city, the middle mile can be costly. The key indicator is the price of “Internet transit,” the term for an ISP’s wholesale access to the Internet’s backbones. The big commercial networks sell transit at competitive prices, but with a catch: Delivery isn’t included. An ISP must physically connect its network to the wholesale providers in one of just a few dozen buildings around the country. As with hub airports, the path of least resistance isn’t always the shortest or most efficient.

This story is from the July 23, 2012 issue of Fortune.

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