No, U.S. Broadband Isn’t Miraculously Getting Cheaper
from the only-if-you-squint dept
Hoping to pretend that the U.S. broadband industry is vibrant and competitive, every so often the broadband industry will issue a broad proclamation that U.S. broadband is secretly amazing and super affordable. Unfortunately data uniformly, clearly shows that it’s not. The availability of fast speeds remains spotty, prices remain high, and customer service, while improving glacially, is generally terrible.
Yet the U.S. telecom industry employs an absolute army of consultants, lobbyists, and PR shops who’ll routinely try to argue that U.S. broadband is secretly amazing… you just hadn’t noticed yet.
That usually specifically involves blanketly ignoring the glaring lack of competition (83 million Americans live under a monopoly) or high prices (the U.S. is estimated to have the 9th most expensive broadband on the planet). It’s an almost religious sect so dedicated to an illusory concept of what “free markets” are supposed to look like, they’ve spent several decades lost in the woods.
For example, last week some telecom industry-allied consultants made a bit of a stink about how, once again, U.S. broadband was secretly super affordable, and getting cheaper. They immediately crafted headlines claiming U.S. broadband prices had dropped 46 percent since 2016, proof positive that the sector doesn’t need reform (or pesky things like competent consumer protection):
The data clearly demonstrate lowered price and increased competition. This contradicts the assertions of many leading media, think tanks and regulatory advocates that US broadband prices are high and that there is little to no competition.
But it didn’t “clearly” show any such thing (because U.S. broadband prices overall aren’t dropping).
As usual, telecom industry monopoly apologists had to twist themselves into pretzels to come to this conclusion, leveraging a study that didn’t even actually look at consumer bills. Instead, the study’s findings were based on “relative value in cost-per-Megabits per second (Mbps),” which industry experts note doesn’t actually reflect real-world pricing.
Yes, an increase in speeds in some parts of the country may have improved the overall value proposition. But if you’re not factoring in uneven deployment, uncompetitive territories, and looking at real-world consumer bills (once all sneaky fees are leveraged in) you may as well be making a study out of Play-Doh:
what the report authors don’t make clear enough is that this is actually a report of relative value in cost-per-Megabits per second (Mbps), not a report of broadband bill trends over time.
More specifically, the report basically just shows that some speed tiers in some areas have gotten cheaper for some people as the underlying technology has gotten cheaper for some ISPs:
That’s not all that revolutionary though, for all the reasons that we might expect: web content has become more data hungry, remote work more common, the presence of an increasing number of connected devices, and more people using the Internet every day. A 500 Mbps connection in 2016 was more expensive than it is today, but that’s only because those users who wanted it in 2016 were willing to pay a premium. In fact, if we boil it down, that’s all this report really shows – the decreasing luxury value of a high-speed connection over time.
The telecom industry generally prefers nebulous studies that examine “value” from very specific viewpoints for what should be obvious reasons. Such studies generally ignore looking at actual consumer bills. And even when they do look at actual consumer bills, they look only at advertised price — not the real monthly price you’ll pay once you’ve factored in sneaky fees and bullshit usage caps.
Granted the telecom trade press didn’t make any of this clear when sharing the study’s findings, much to the glee of telecom executives who very much don’t want to believe they’re not providing exceptional product at an exceptional value. Neither did the broader press, which also parroted the study’s findings without disclosing the fact it doesn’t actually look at consumer bills.
If you’re looking for an actual analysis of U.S. broadband industry pricing, most telecom experts will direct you to this 2020 study by Becky Chao and Claire Park of the Open Technology Institute. It found, as countless other studies and actual experts have, that regional monopolization, consolidation, limited competition, and regulatory capture means U.S. broadband is generally patchier, more expensive, and slower than a laundry-list of countries all over the world.
That’s also apparently obvious to anybody who has looked at their broadband bill, or spent more than thirty seconds on the phone with U.S. telecom customer support. Especially low income Americans, rural Americans, those living in Tribal territories, and those in marginalized urban America.
There’s a contingent of telecom-allied folks who very much still want to make the negative impact of unchecked monopolization something that’s debatable, when it very much isn’t. Something the COVID home schooling and telecommuting boom made exceptionally clear.
Filed Under: broadbnad, competition, prices
Comments on “No, U.S. Broadband Isn’t Miraculously Getting Cheaper”
makes perfect sense
This is super obvious why they would do that. Because if you compare that to every other country in the world we’re basically dead last. Our cost per mb is hilarious vs other countries.
what should be?
well, it’s pretty routine for any business sector to boast and exaggerate about how good they are, and avoid pointing out any shortcomings.
Government agencies and politicians do the same.
so real issues become what ‘should be’ the current operational US hispeed broadband coverage and how much ‘should’ it cost consumers ?
nobody has any objective method of figuring that stuff out, dynamic Supply & Demand processes ultimately determine things
Every Buyer wants more good stuff at a cheaper price and every Seller wants more sales at the highest prices he can get.
What is then the outcome that you see daily on every product and service all around you >
We should treat this like rural electrification or telephone service, with coverage to nearly 100% of people who want it. I don’t know how much it should cost, but I can tell you I was paying $20/month for internet access 25 years ago. That was dialup (and excluded the phone line), but everything else in technology has gotten vastly cheaper by every measure; I don’t see why broadband should cost more, and in many countries it doesn’t.
(Go look at some old Byte Magazines on archive.org; e.g. from August 1990, vol. 15-08: “Best of all, since we sell direct, cutting out the retailer and his markup, you can buy a complete Dell 425E  for just $6,399. That’s $5,954 less than Compaq’s 33 MHz 386 and $7,855 less than Compaq’s 25 MHz 486.” I recently built a pretty powerful computer for less than $3000.)
The costs to pay humans have increased; but once a wire’s running to a residence, customers and ISPs only need to deal on a human level when one of them, or a backhoe operator, fuck up. So maybe high-end (symmetrical 1-10 Gb/s) broadband for $20/month would be reasonable, with basic service (100 mbit/s, symmetrical) around $10/month and government-sponsored free service around 1-10 mbit/s (remember Free-nets?—cost-wise it’s likely similar to letting cyclists “freeload” on infrastructure paid by gas taxes).
Re: Re: Then electricity should be going down in price too.
Mostly All the electric wires have been placed so in your world electricity costs should be going down as well. But its not.
Also with electric lines they don’t have the technology upgrades that telecom does. Utilizing copper to the home always has a ton of maintaining and cost.
As close to 100% as feasible.
I would say however much municipal broadband customers are paying sounds reasonable.
This is NOT a pro-Trump comment, just an observation of fact.
I retired to a small rural community in 2017. In 2018 or 2019 we got fiber optic cable installed by our local telcom with a grant from the Trump administration.
We now get 200mbps uploading and downloading speed with absolutely no cap on usage.
I never got this kind of service living in St Paul or when I lived for a while in Wisconsin.
The U.S. doesn’t get quality broadband from sea to shining sea because the people that make money from garbage service have more clout in our govt than we the people do.
Srsly, my internet hasn’t been this awesome since I did work for an indie ISP and they let me have a wildcard email address back in the ’90s. EVERYONE SHOULD HAVE THIS KIND OF BROADBAND.
“a grant from the Trump administration.”
I’d probably need a citation on this. You might have got a grant while Trump was in the White House, but it doesn’t track that that’s the specific reason you got it or that his administration had anything to do with it.
Maybe if the community had repeatedly been turned down in the past and Trump signed something to push it through when he came into office, I could believe that. Otherwise, it’s probably just coincidence that Trump was in office when they got the grant, and it’s proof of nothing more than a grant being distributed effectively in your case.
“EVERYONE SHOULD HAVE THIS KIND OF BROADBAND.”
I think it’s great that a rural area is getting this kind of service and I hope it rolls out as far as possible, but I’d rather not have my speed cut by 1/5.
“Yet the U.S. telecom industry employs an absolute army of consultants, lobbyists, and PR shops who’ll routinely try to argue that U.S. broadband is secretly amazing… you just hadn’t noticed yet.”
For all the things not said. The CIA installation in Utah, the other article you posted after this one about Gov. agencies posting on the net.
I dont consider the USA much better them Russia or China. its just the End result that we have problems with. Those other countries Love listening to all the people and finding dissidents. The Police in those countries have a job to do.
But Ours, generally cant do allot until they have MORE PROOF that you are doing something Bad, via the FBI playing games AGAIN.
Yes, broadband companies– telco, calbeco and even google have languished in not ramping up deployment when they had a huge opportunity to do so on the CHEAP with low interest rates, labor costs that weren’t our current inflationary era.. now they have the perfect excuses to truck out when they have to conveniently RAI$E rates in 2022 and beyond! Add to that the fleecing in geographies with only ONLY dominant broadband provider and another who just “GAVE UP” deploying their network!! Interesting how the dominant company is still charging 2 – 10x the price of geographies that have 2 fiber and/or gigabit+ docsis competitors to the same customer.
Small Town Rural
Living in 17268 we should consider ourselves lucky to get what we get. NOT. We are getting abandoned through our copper lines with no upgrades for DSL $$. Cable is available $$$. Getting 50/10M from T-Mobile Home Internet. I don’t live in a BIG population area but I live in a commute from area for DC and Baltimore. Great internet at work, just not at home.