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ISP’s Improve Broadband Speeds: However, Competition Troubling

ISP’s Improve Broadband Speeds: However, Competition Troubling

While US ISP’s improved on advertised speeds for delivered broadband, the cost of access continues to be a concern.

ISP’s Improve Broadband Speeds: However, Competition TroublingA new report issued by the FCC, Measuring Broadband America – 2012, based on broadband advertised speeds vs. delivered speeds improved substantially from 2011 to 2012. The survey of 6,500 household’s revealed speeds increased to 96% delivered from 87% in 2011. That is a marked increase year-over-year with fiber leading the way at 117%, cable coming in at 99% and DSL reaching an average of 84%.  The last survey taken in August 2011 indicated broadband speeds were divergent in actual vs. delivered speeds across different companies. The most recent report indicted those divergent speeds were much closer to each other by company.

Great News, but with a Catch

Although overall average speeds increased during the period, prices for broadband service were substantially higher than other countries. Competition, which is a governing factor on US economic pricing, continues to be an issue on how much consumers must pay for those speeds. In foreign countries pricing is substantially lower than US levels going back to a lack of competitive pressures which tends to reduce overall prices for goods and services.

ISP’s Improve Broadband Speeds: However, Competition Troubling

Measuring Broadband America – July 2012 – FCC Report

US Lags in Competition Compared to Global Counterparts

According to the FCC this is troubling, and should to be addressed going forward. The regulator has long lobbied for more competition within the ISP industry believing in the resulting positive effects on consumer pricing, and job creation.  The New America Foundation released a recent report, The Cost of Connectivity, which undertook a comparison of high-speed Internet prices in 22 cities around the globe, found interesting statistics regarding competitive pricing. Their research centered on pricing, download-upload speeds, and bundled services.

“When looking at the cost and speed of Internet access in major U.S. cities in comparison to other global cities, it is difficult to ignore the fact that the U.S. is so much more expensive than many of its international counterparts.” – (New America Foundation)

Interestingly, the foundation indicated that the key metric in its findings, which conveys US consumers often pay more for slower broadband access than its foreign counterparts, was a lack of serious competition across markets. The report found that where competition of at least 3 service providers existed within a market, prices were lower and speeds were higher. These results are undeniable, that increased competition is good for market forces, including price demand and job creation.

U.S. ISP’s: Too Large, Too Complacent

Clearly the US has work to do in becoming a global competitor in broadband metrics. This includes affordable access to consumers and businesses, reasonable speeds of broadband service offered, including download-upload capability. Until legislators are willing to tackle the competition issue head-on, the US will languish in lackluster broadband access and performance in a global setting. Have we created a large non-competitive ISP industry which has become complacent and slow to meet market demands? I think so, if you look at hard data on a global scale.

photo credit: USDAgov via photo pin cc

ISP’s Improve Broadband Speeds: However, Competition Troubling
ISP’s Improve Broadband Speeds: However, Competition Troubling Leonard Grace (270 Posts)

Founder of Broadband Convergent, a Broadband-Mobile-Cable-Wireless-Telecom market website focused on highlighting industry news and strategic issues within technology arenas. Highly researched and experienced insights and trends both inform and enlighten readers on current industry convergence of Broadband-Cable-Mobile-Wireless and Telecom Sectors.

ISP’s Improve Broadband Speeds: However, Competition TroublingISP’s Improve Broadband Speeds: However, Competition TroublingISP’s Improve Broadband Speeds: However, Competition TroublingISP’s Improve Broadband Speeds: However, Competition TroublingISP’s Improve Broadband Speeds: However, Competition TroublingISP’s Improve Broadband Speeds: However, Competition Troubling

  • Chuck

    I believe this message is fundamentally wrong. There IS competition in nearly every market via CATV,telco and wireless. The fact that the price is higher than many other countries is driven by far more than greed – government regulations, taxes, fees and the sheer size of US networks combines to raise the cost to deliver service. I am no expert, but price is not an apples-to-apples comparison when comparing nations.

    • http://www.ivpcapital.com/blog Michael Elling

      Chuck. The US had the lead 15 years ago. It is less than a duopoly today; more like a monopoly. Bandwidth pricing disconnected from Moore’s and Metcalfe’s laws about 10 years ago and as a result is 20-150x overpriced on a price/performance basis.