Commerce Department Study Reveals There's Almost No Competition If You Want Real Broadband

from the what-broadband-problem? dept

Just recently, the U.S. Commerce Department’s Economics and Statistics Administration (ESA) released yet another study for defenders of the broadband industry status quo to ignore. The study specifically took a look at the competitive options available at higher speeds, and found that — surprise surprise — they simply don’t exist for most users. FCC boss Tom Wheeler has recently been making the rounds trying to sell the idea that our minimum broadband definition needs to be higher than 4 Mbps, in the process pointing out that three quarters of the country doesn’t have the choice of more than 1 ISP when it comes to speeds of 25 Mbps or higher.

The ESA study confirms this and then some. When it comes to speeds of just 3 Mbps, the study notes that 98% of the public has the choice of two providers. Of course 3 Mbps is barely enough for decent HD streaming, much less a household of hungry bandwidth users, and the choice of just two providers means both are going to be expensive. It’s fairly similar at speeds of 10 Mbps, where most people at least have the choice of two ISPs — an apathetic cable operator, engaging in “wink wink nod nod” competition with a phone company. Move past 10 Mbps, and competitive options get worse — quickly:

“For example, only 37 percent of the population had a choice of two or more providers at speeds of 25 Mbps or greater; only 9 percent had three or more choices. Moreover, four out of ten Americans did not live where very-high-speed broadband service ? 100 Mbps or greater ? is available. Of those with access to broadband at this speed level, only 8 percent had access to two or more providers; 1 percent had access to three or more. Only 3 percent of the population had 1 Gbps or greater available; none had two or more ISPs at that speed.”

So for all the hype surrounding 1 Gbps speeds this year, it’s important to remember that only 3% of the population can get it. That’s a lot of fiber to the press release. The ESA offers a handy graphical breakdown of the dearth of options in most markets:

It’s worth noting that while the ESA makes it clear from the outset that the lack of competition impacts pricing, the word “price” is mentioned just twice in the study. For years ISPs have worked very hard to ensure that specific pricing data never reaches the eyes of the public. The defense is always that ISPs don’t want to give competitors access to pricing data, though any ISP worth its salt already knows exactly what its competitors charge — and where. There’s really one reason efforts like our $300 million broadband coverage map don’t include pricing data: it makes it easier for the industry’s proud defenders of the status quo to continue pretending there isn’t a problem.

Filed Under: broadband, competition, fcc, net neutrality, tom wheeler