Facing Growing Pressure To Suck Less, Big Telecom Claims Broadband Is Super Cheap (It Is Decidedly Not)

Say That Again

from the reality-is-what-I-say-it-is dept

Despite some bold but vague promises, it’s still not clear exactly where the Biden administration is going to fall on broadband policy. While the administration is promising a $100 billion investment and “bold action” on broadband, it’s also oddly in no rush to appoint a permanent FCC boss, or restore the FCC consumer protection authority gutted during the Trump administration. There’s also a lot of telecom industry lobbyists standing in the long stretch between the administration’s promises on broadband, and actual implementation.

COVID put an extremely bright light on the US’ expensive and mediocre broadband, applying more political pressure on lawmakers and regional monopolies than they’ve seen in a long while. That’s compounded by the very correct sense that as everybody has hyperventilated over “big tech,” “big telecom” has gotten away with a pretty large heist the last few years when it comes to enjoying mindless deregulation and massive tax breaks in exchange for, well, absolutely nothing.

Enter consumer groups, which have been trying to apply more pressure by highlighting the very real cost of rampant regional monopolization, and all the empty promises of the Ajit Pai era. Free Press, for example, recently released a study (based largely on data from the Bureau of Labor Statistics) showing that during the last four years, broadband prices grew at four times the rate of inflation during the Trump era.

AT&T, Comcast, Verizon, and Charter (Spectrum) lobbyists haven’t much liked that, and have been trying to circulate misleading studies of their own claiming that if you tilt your head and look at U.S. broadband pricing just so, it’s an incredible and growing value:

“The cable industry’s top lobby group, NCTA?The Internet & Television Association, this week accused advocacy groups of using “cherry-picked data.” But the cable group’s claims that prices are going down is contradicted by US government data showing that Americans are paying more every year. The cable lobby’s argument that prices are going down relies on the price per megabit rather than the average price that consumers pay each month.”

By that logic, Americans should feel lucky that they’re not paying $2,800 a month for 100Mbps service. But obviously, the bandwidth needs of Americans and the bandwidth capabilities of broadband networks have steadily increased over time, even as ISPs’ costs have dropped, just as the capabilities of smartphones, processors, and other technology products inexorably increase over time.”

One of the primary ways telecom giants sock captive consumers with endlessly higher prices (then pretend they’re not doing this) is the use of misleading fees and surcharges that only show up when you get your bill. So of course if you only look at the advertised price (which many industry studies do), or only look at the price per megabit, you’ll get decidedly different pictures than what you’ll see on actual consumer bills. But most objective studies have made it clear for many years that US consumers pay some of the highest prices for broadband in the developed world thanks to limited competition and regional monopolization.

Neither party has been seriously willing to challenge massive, politically powerful telecom monopolies. The industry’s worst nightmare is meaningful rate regulation. But while that’s often bandied about as some sort of apocalyptic bogeyman and ever-present threat, the reality is that’s never been a serious consideration under either party. Even net neutrality rules, the now dead attempt at something vaguely resembling telecom monopoly oversight, went well out of its way to avoid ever meaningfully regulating the telecom sector when it comes to price via forbearance and large regulatory carve outs.

It’s just not politically productive to seriously challenge, say, AT&T, a company that slathers Congress in campaign contributions and happily spies on your own citizens for you. And while the Biden administration is at least initially promising to change that narrative and lower consumer broadband prices via “bold action,” it’s still not really clear how that’s going to actually happen, or if good intentions will survive the telecom industry lobbying and disinformation gauntlet.

Filed Under: broadband, competition, fees, prices