Are you ever frustrated about a lack of choice for home Internet providers? Well, worry no more. The nation’s top cable lobby group is here to let you know that the US is simply overflowing in broadband competition.
In a new post titled, “America’s competitive TV and Internet markets,” NCTA-The Internet & Television Association says that Internet competition statistics are in great shape as long as you factor in slow DSL networks and smartphone access.
Competition isn’t just the rule in television, it defines broadband markets as well. In spite of living in one of the largest and most rural nations, 88 percent of American consumers can choose from at least two wired Internet service providers. When you include competition from mobile and satellite broadband providers, much of America is home to multiple competing ISPs leveraging different and ever-improving technologies. This competition has led to rapid progress in the quality of consumer internet connections with average peak speeds in America quadrupling over the last five years, from 23.4 Mbps to 86.5 Mbps and the average price per megabit dropping 90 percent in 10 years, from $9.01 per megabit per second to $0.89 per megabit per second.
Many Americans who feel that they have only one viable choice for home broadband might think that cable lobbyists are describing an alternate reality. But it’s easy to see the difference between NCTA marketing and Internet users’ actual experiences. Yes, if you factor in any wireline home Internet provider offering any speed, then US customers can generally choose between a fast cable network and a slow DSL one. But if one of your two options isn’t fast enough to meet your needs, then there’s really just one choice.
The NCTA post makes a better case that competition is prevalent in subscription TV services, noting that nearly all American homes have access to a wireline TV provider and two satellite providers. Netflix and other online streaming services also take up a huge share of TV watching, the NCTA pointed out.
Plenty of competition—at 3Mbps
There’s more reason to quibble with the NCTA’s analysis of broadband competition. The NCTA’s 88-percent figure comes from a December 2014 report by the US Department of Commerce, which used a now-outdated definition of broadband. The report said that 88 percent of Americans “had two or more fixed ISPs available to them” at download speeds of 3Mbps. This is “the approximate definition of basic ‘broadband’ download speeds,” the report said.
But just one month after that report was issued, the Federal Communications Commission changed its definition of broadband from 4Mbps downstream and 1Mbps upstream to at least 25Mbps downstream and 3Mbps upstream. The higher speeds better reflect the statutory definition of “advanced telecommunications capability” that “enable[s] users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology,” the FCC said at the time.
Then-FCC Chairman Tom Wheeler pointed out that cable company marketing pitches tell customers they need speeds higher than 25Mbps to handle advanced capabilities like online gaming and HD streaming in households with multiple people and multiple devices.
Despite that, the NCTA opposed the FCC’s new definition of broadband, claiming that slower speeds are fast enough for the purposes of measuring deployment and competition. More than two years later, the cable lobby is still using an older broadband definition in order to claim that the US is awash in broadband competition.
At high speeds, much less competition
Studies using the 25Mbps definition show that tens of millions of US households have at most one option for fast home Internet services.
Out of 118 million US households, more than 10.6 million have no access to wired Internet service with download speeds of at least 25Mbps, and an additional 46.1 million households live in areas with just one provider offering those speeds (as we noted in a recent story). Even including fixed wireless connections, there were still nearly 50 million households with one 25Mbps provider or none at all, based on the analysis of FCC data.
That’s the reality that broadband customers are frustrated with. And while there is more competition in mobile broadband with four major nationwide providers, the FCC said in its 2016 Broadband Progress Report that fixed and mobile services have different characteristics and serve different needs. Mobile data obviously provides portability, but wireless transmissions can be disrupted by environmental factors that do not degrade fixed line connections, for example.
Consumers that use only mobile broadband often do so because they can’t afford both services, the FCC said. The report continued:
[A]s the record demonstrates, American consumers simply do not treat the two services as functional substitutes. On the contrary, Americans, including those who do not have broadband, increasingly view an at-home, high-speed broadband connection as a critical communications tool. Indeed, as Pew recently found, two-thirds of Americans believe that “not having a home high-speed internet connection would be a major disadvantage to finding a job, getting health information or accessing other key information.”
New FCC chair sees things differently
That report was issued before current Chairman Ajit Pai took over from Wheeler. Pai voted against the 2015 decision to raise the broadband speed definition, criticized Wheeler for excluding satellite and mobile services from the new broadband benchmark, and has said the broadband market is too competitive for strict privacy rules. Under Pai’s leadership, the FCC’s future conclusions about broadband deployment and competition might be more in line with the cable lobby’s.
That could make a difference for Internet users because the Telecommunications Act of 1996 requires the FCC to promote competition in the telecommunications market if it finds that broadband is not being deployed to all Americans in a reasonable and timely fashion. If the FCC changes its analysis and concludes that broadband is being deployed to Americans fast enough, then it isn’t required to take such steps.
As the cable lobby said this week, “Competition is alive and well in the TV and Internet marketplaces and consumers are benefiting every day.”