No, U.S. Broadband Isn’t Miraculously Getting Cheaper

Broadband

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