Limited Competition Means US Broadband Prices Can Vary Drastically On The Same Block

from the do-not-pass-go,-do-not-collect-$200 dept

For years we’ve noted how a lack of competition means consumers across the country pay dramatically different prices for the same or worse service. For example a customer in Chattanooga, Tennessee can pay $70 or less for gigabit service, thanks to competition between Comcast and the regionally owned community broadband network.

But live in any of the countless US markets that major broadband providers have neglected (despite decades of major subsidies, tax breaks, and the near-mystical promises surrounding mindless deregulation), and you’re often facing the choice of either an apathetic telco with sluggish, neglected DSL, or, more likely, a regional cable monopoly (Charter or Comcast) that charges significantly more money thanks to regional monopolization.

Over at Stop the Cap!, Phil Dampier recently showcased how the presence or absence of competition can even result in customers having to pay up to $40 more per month for the same or sometimes slower service. Not only that, users in more competitive markets enjoy longer promotion rates (often two years rather than just one). Even the fees charged by the regional monopoly (one major way they hit consumers with dramatically higher prices than advertised) are significantly higher at homes that lack any real competition:

“Spectrum charges a hefty $199.99 compulsory installation fee for gigabit service in non-competitive neighborhoods. Where fiber competition exists, sometimes just a street away, that installation fee plummets to just $49.99.”

When asked to explain itself, Charter engaged in some tap dancing:

When contacted by Ars, Charter said that “Spectrum Internet retail prices, speeds, and features are consistent in each market?regardless of the competitive environment.” But “retail prices” are the standard rates customers pay after promotional rates expire. Stop the Cap showed that Charter’s promotional rates vary between competitive and noncompetitive areas.

Charter told Ars that its promotional offers are affected by several factors, including “location.”

So while retail (post promotion) rates might be similar from block to block (which often isn’t the case regardless of what Charter states), the local cable monopoly uses contract length, promotional rates, and fees to charge significantly different rates. That makes it more difficult for policymakers, consumers, and the press to analyze pricing is quite by design. And it’s a major reason why the cable lobby, for years, has fought against the FCC sharing consumer pricing data, knowing full well that once you clearly illustrate the impact of regional monopolization and limited competition, somebody might get the crazy idea to try and actually fix it.

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Comments on “Limited Competition Means US Broadband Prices Can Vary Drastically On The Same Block”

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Anonymous Coward says:

Re: Well, whaddaya know?

In the vast majority of cases, competition is good for the consumer. In a few cases, it’s a wash (I remember reading of one company that decided to price their patent-protected as if they were in a competitive environment – they are one of the few to keep a dominant position after their patent expired). It a very few cases – and government competitions are notable here – they are actually wasteful and expensive for the consumer. If you doubt this, just look at the commercial crew "competition", where Boeing has yet to reach the ISS, despite being paid almost twice as much as SpaceX. It really does seem to me that there is no truth so fundamental that a government can’t find a way to screw it up.

James Burkhardt (profile) says:

Re: Re: Well, whaddaya know?

But that’s not competition for consumers, is it? That’s competition over government contracts for major industrial scale r&d. That involves a completely different set of factors. many of them tying directly back to the issues described as the military industrial complex. The government is not a neutral consumer, particularly with Boeing. It’s the same reasons they are try8ng to give a 10 billion contract to Blue origin despite its lackluster success.

Samuel was commenting on competition over individual consumer choice relating to established ready to sell products and services. To shrink government bids on major projects down to consumer competition fails to understand why these things fail

Anonymous Coward says:

At the close of the Constitutional Convention on September 17, 1787, as Benjamin Franklin left the hall in Philadelphia, he was asked, “What kind of government have you given us, Dr. Franklin?” He replied: "A republic, if you can keep it."

It is, was, and will always be our job to keep the government in check. If we do not, then we will end up back at square one and become slaves once again. No one is going to come to our rescue… except ourselves.

So with that in mind, if you’ve never heard of the following:

Asset Forfeiture, NSLs, ALEC, AIPAC, TPP
FISA Courts, Congressional Insider Trading
Judicial Standing, Deferred Prosecution
Parallel Construction, Stingray Devices
EO 12333, XKeyscore, COINTELPRO
Pentagon Papers, Gary Webb
Operation Mockingbird
Operation Northwoods
Operation Paperclip
Project Monarch

Or worse, you’ve heard of them but can’t be bothered to care, then like it or not, you are one reason among many that we are on a one-way flight straight to Hell. To the corporations and their puppet politicians, your ignorance and apathy are worth more than all the slaves in China. Because it is your indifference that enables these bottom feeding cockroaches to thrive in the dark and rob you of your wealth and liberty.

This is not political, it’s universal. Both of the puppet parties you think you get to choose from every two years are completely infected by blanket webs of corruption and have long ago mortgaged their allegiance to their corporate masters. And what these leeches need more than anything to survive and thrive is a stupid, apathetic populace with red tags on their ears who will lap at their feet and believe every lie they feed them, or worse, are too busy staring at their smart phones to even care that they’re being lied to.

The natural state of humanity is to slide into slavery and conflict. Our American bulwark against that decay was built by the blood, sweat, tears, hard work, and personal sacrifice of countless millions. These people gave everything to build the pillars of justice that protect and sustain you, and it is your responsibility to give something back and sacrifice a little in order to maintain those pillars and pass them on to the next generation. Anything less is a betrayal to those who broke their back to build the structure you are now standing on. So put down your Facebook and start paying attention to the things going on around you before that structure crumbles to nothing beneath your feet and you become a slave once again.

Remember, a nation of sheep breeds a government of wolves and you get more of what you tolerate. So turn off your Goddamn TV, turn on your mind, and get out there and stop tolerating it before you wake up one morning robbed of your remaining liberty and you no longer have a choice.

Someone far wiser than I once pointed out that: ‘Power without oversight is the fastest route out of a democracy’. Your responsibility then, is to render that oversight.

Joseph de Maistre said: ‘Every citizenry has the government they deserve…’

Lostinlodos (profile) says:

Regulations with care

The consumer petrol industry is a good example of what over regulation can do as well. Gas stations can not sell fuel below cost.
What benefit to the consumer is there in this.
If a government service offered Internet at 10Gbps for $79 would they welcome or challenge Comcast offering it at $65? I have a feeling it would be the latter.
The problem is once the government takes control it rarely gives it up.
You can get entry level internet in the 25 megabit range in most wired locations for as low as $25.
I’m concerned any attempt at federal internet would wind up the same mess that Obamacare became.
It helps the lowest level of our country. But the government finds ways to appease the big companies with asinine rules that disrupt everything at lower-middle-class and above.

Let’s look at a few things that happened with Obamacare to the upper 90% of the country.
You can only change insurance once a year, in a very small time frame.
You can only change a service supplier every 60 months.
You must now purchase insurance if you want it or not.
Plan options previously available have been reduced and combined creating less options.
Prescription coverage is still additions.

So what happens when the government try’s this with the internet?
Internet becomes a standard with mandatory levels.
So someone who reads emails and uses irc and doesn’t need 5Mbps service let alone 100 must now choose a bare minimum far above need.

Plans could be combined into broken tiers with major gulfs between them.

Everyone will be offered mandatory annual contracts. You don’t like the service wait till the registration period.

If you over buy or under buy, wait till the registration period.

$10 DSL disappears.

The government is great at making everyone get something but what you get is rarely useful for the majority.

Not everyone needs, or wants, gigabit internet.
I can use it. But my mother doesn’t need that. Hey should she pay for higher service than she needs?

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