FCC Chair Admits There Is Nowhere Near Enough Broadband Competition

This chart presented by Wheeler shows how little competition there is for broadband, especially at increased speeds.

In spite of what Comcast would have you believe, there is very little actual competition among broadband providers in the U.S. And this morning, FCC Chair Tom Wheeler publicly explained the woeful state of competition for America’s Internet users.

“Our economic future is inexorably tied to the continued expansion of the Internet,” said Wheeler at a speech in D.C. this morning. “My goal is not to criticize, but to recognize that meaningful competition for high-speed wired broadband is lacking and Americans need more competitive choices for faster and better Internet connections, both to take advantage of today’s new services, and to incentivize the development of tomorrow’s innovations.”

As you can see from the chart above, presented by Wheeler, the faster the service, the fewer options available. And the 10Mbps tier — what many believe should now be considered the lowest acceptable definition of broadband — more than one-third of the country has fewer than two options for service, and 8.4% of America doesn’t even have the option of getting this level of service. Fewer than 10% of the country has at least three choices for 10Mbps service.

And it just gets worse as you increase the speeds. More than 1-in-5 Americans don’t have access to the highest tier shown on the chart, and nearly 2/3 of the country has only one provider to choose from. A mere 1.6% have the luxury of selecting between three providers.

Wheeler says too much focus has been put on merely providing people with the minimum level of service.

“We need to keep moving to the right on the chart,” he explained.

Things are particularly bleak in rural America, where nearly 25% of residents (around 14.5 million people) don’t even have access to the lowest level of broadband service. And as for the argument that wireless broadband is a viable competitor for rural markets – a notion we’ve already shown to be complete hokum — Wheeler points out that only 37% of rural consumers are covered by enough 3G or 4G mobile wireless providers to say the market is competitive.

“The simple lesson of history is that competition drives deployment and network innovation,” said Wheeler. “That was true yesterday and it will be true tomorrow. Our challenge is to keep that competition alive and growing.”

And while he applauds efforts like Google Fiber and AT&T’s recently announced expansion of its gigabit Internet service, the Chair said there is still much to be done.

“Looking across the broadband landscape, we can only conclude that, while competition has driven broadband deployment, it has not yet done so a way that necessarily provides competitive choices for most Americans,” explained Wheeler.

He also cautions against simply looking at the number of available options as a way of defining competition.

“Counting the number of choices the consumer has on the day before their Internet service is installed does not measure their competitive alternatives the day after,” said the Chair. “Once consumers choose a broadband provider, they face high switching costs that include early-termination fees, and equipment rental fees. And, if those disincentives to competition weren’t enough, the media is full of stories of consumers’ struggles to get ISPs to allow them to drop service.”

by Chris Morran via Consumerist