50 Million US Homes Can't Get 25 Mbps From More Than One ISP

Broadband

from the who-needs-competition? dept

We’ve talked for a while how while there has been a lot of hype placed upon the nation’s scattered but modest deployment of gigabit networks, broadband in countless parts of the country is actually getting significantly-less competitive. That’s thanks in large part to the nation’s phone companies, which have increasingly refused to pony up the necessary costs to upgrade their aging DSL networks at any scale. Instead, many have shifted their focus either to enterprise services, or as in the case of Verizon, into trying to peddle ads to Millennials after gobbling up AOL and Yahoo.

As a result, cable has established a growing monopoly over broadband across massive swaths of the country. This reduced competition has resulted in rampant price hikes (usually in the form of hidden surcharges or arbitrary and unnecessary usage caps and overage fees). But it also has eliminated any real incentive to keep rates low or repair what’s statistically some of the worst customer service in any industry in America.

A new study by several consultants for the broadband industry offers a little more insight into the real-world result of the sector’s ongoing competition problem. According to the report by Economists Incorporated and CMA Strategy Consulting, there’s a fairly staggering number of broadband consumers that don’t see any real competition whatsoever, especially at the FCC’s standard definition of broadband (25 Mbps down, 3 Mbps up):

“More than 10.6 million US households have no access to wired Internet service with download speeds of at least 25Mbps, and an additional 46.1 million households live in areas with just one provider offering those speeds, a new analysis has found. That adds up to more than 56 million households lacking any high-speed broadband choice over wired connections. Even when counting access to fixed wireless connections, there are still nearly 50 million households with one 25Mbps provider or none at all.”

So it should be noted here that these estimates are likely optimistic. FCC data has previously suggested that this number is even higher, former FCC boss Tom Wheeler stating that around 80% of homes can’t get access to the agency’s standard definition of broadband. It’s notably worse in rural or tribal areas. But even this week’s new, toned down report by industry consultants doesn’t paint a particularly pretty picture. Even at slower broadband speeds, you’d be hard pressed to identify anything close to reasonable competition:

“There were 31.1 million households with exactly one wireline provider offering speeds of at least 10Mbps, and another 6.9 million households with zero providers offering such speeds over wired connections. At the paltry level of 3Mbps download speeds, 19.3 million households had access to one wireline ISP and 4.9 million households had no access at all.”

It should be noted that one of the co-authors of the report, Hal Singer, has a bit of a history creatively-massaging data at the industry’s behest — especially when it comes to trying to vilify net neutrality (which the 45-page report seems to avoid talking about). So while Singer’s ability to candidly acknowledge a lack of competition is a little surprising (even though the report does try to scale back previous FCC estimates on this front), less surprising is the authors’ proposed solution to the broadband industry’s broadband deployment and competition shortcomings: the magical wand that is telecom sector deregulation.

So again, the report is quick to avoid the debate over the current administration’s decision to kill consumer privacy protections and gut net neutrality, despite Singer being a major player in trying to make the latter happen. And while it pays some lip service to competition, it fails to acknowledge how cable’s growing monopoly and outright telco apathy are making competition problems worse. The report however does try to claim that several, less talked about FCC initiatives are going to expand fiber and competition to an additional 26.7 million homes:

“In two recent Notices of Proposed Rulemakings (?NPRMs?), the FCC has outlined a range of potential actions to make it faster and less costly to deploy next-generation networks. It is expected that these proposals will lower pole-attachment costs, reduce the time and cost of make-ready, reduce barriers to copper retirement, accelerate legacy time-division multiplexing (?TDM?) product discontinuance, and reduce barriers to locating and deploying wireless infrastructure.

The telecom industry has insisted for decades that if you remove all regulatory oversight, competition and connectivity will magically spring forth from the sidewalks, bathing us uniformly in dirt-cheap, ultra-fast connectivity. Of course that never happens because reality is notably more complicated, and each piece of regulation (especially in an industry where incumbent legacy giants are usually quite-literally writing the laws) needs to be weighed on its actual merits. When you just blindly “deregulate” a sector that suffers from both regulatory capture and limited competition, history tells us you don’t get a miracle — you get Comcast.

What most people also don’t seem to understand is that when the telecom industry pushes for “deregulation,” what it actually means is passing regulation it writes. And, historically, that regulation unsurprisingly makes life easier for wealthy, entrenched duopolists, but makes life substantially harder on the smaller competitive upstarts that lack the same lobbying and campaign-contribution firepower. It’s generally how they get partisans who adore the concept of killing burdensome regulations (because yes, there is plenty of that) into cheering against their own best self interests. And it has been a smashing success for decades. Your Comcast bill surely agrees.

So while the report is correct that things like utility pole attachment reform is important for fiber deployment, it fails to mention that cities that have attempted to do so have been sued by Comcast, Charter and AT&T to try and slow competitive threats. Similarly, while the report is quick to emphasize the importance of “reducing barriers to copper retirement,” it fails to mention that AT&T and Verizon’s version of this involves severing the taxpayer-subsizied DSL connections of millions of users (many elderly), and just shoving them toward notably-more expensive wireless (assuming it’s even available).

So yes, some of these efforts — in an ideal world — could speed up deployment. But because we’ve let industry giants quite literally infect government (including surveillance) on a bone-marrow level, actually implementing any regulatory or deregulatory policies that improve competition simply doesn’t happen — because it would reduce sector revenues. Consultants predominantly paid by the industry aren’t likely to admit this, but as somebody having spent the better part of a lifetime tracking this sector I can assure you: none of the competition, coverage and service problems in telecom are going to be fixed until we somehow lessen Comcast, AT&T, Charter and Verizon’s influence over state and federal politics.

Filed Under: access, broadband, competition, fcc