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.