Phone companies won’t upgrade DSL lines, and cable companies won’t expand their service maps.
New FCC data indicates that competition in the broadband market is virtually nonexistent at faster speeds. Most people are intimately familiar with their lack of alternatives to unpopular incumbent ISPs like Comcast. The inability to vote with your wallet is a major reason U.S. broadband customers pay some of the highest prices in the developed world, and these companies sport some of the worst customer satisfaction ratings of any industry in America.
And while the scattered deployment of Google Fiber and other gigabit connections tend to grab headlines that make us feel good about progress on this front, the reality is that in a large number of American markets the problem is actually getting worse.
According to the FCC’s new Internet Access Services Report, 13 percent of “developed census blocks” can’t get broadband at all at the FCC’s standard “broadband” definition of 25 Mbps down, 3 Mbps up. While 56 percent of census blocks can get those speeds from at least two ISPs, 44 percent of census blocks have access to 25 Mbps speeds from just one ISP.
And the faster the broadband speeds get, the more obvious the lack of competition becomes. According to the FCC’s data, 44 percent of census blocks have no access to speeds of 100 Mbps or greater, and 41 percent of census blocks can only get those speeds from just one provider. In other words, 85 percent of U.S. census blocks either can’t get 100 Mbps speeds from any ISP, or only have the option of getting 100 Mbps from just one provider.
The backhaul connectivity that feed these wireless networks are all monopolized by just a handful of companies
With no competitive motivation, ISPs in these areas will routinely jack up prices with little to no real repercussions. In many instances, this lack of competition opens the door to arbitrary and unnecessary usage caps and overage fees, which makes both the cost of the connection and the ability to use competing streaming services far more expensive.
And the problem is actually worse than this data suggests. For years the FCC has been criticized for the census block approach to measuring deployment and competition. Under the FCC’s current measurement model, a census block is considered “served” if just one home in the census area has access to broadband at those speeds.
Efforts to shift this model toward a more accurate address-based approach have popped up over the years, but are routinely shot down by ISP lobbyists, who don’t want the nation’s deployment and competition shortcomings being highlighted.
This failure to map broadband availability accurately was painfully mirrored by the FCC’s broadband availability map. The now defunct map, built with $300 million in taxpayer dollars, historically overrepresented both broadband availability and speed. And thanks to ISP lobbying pressure, excluded mentioning pricing whatsoever.
Large ISPs like Comcast and AT&T are nervous that if someone were to more accurately map broadband availability and competition, somebody might just get the funny idea to actually do something about it.
Instead of fixing the problem, the government tends to buckle to ISP efforts to make the data seem rosier than it actually is. Especially when the FCC is suffering from the kind of regulatory capture enjoyed under revolving door regulators like current FCC boss Ajit Pai, whose net neutrality repeal has made him one of the least popular men in America.
These companies are so saddled with debt from repeated mergers and acquisitions, upgrading their networks at scale is now impossible
A large reason for the nation’s lack of competition at faster speeds is the country’s phone companies, for whom residential broadband isn’t profitable enough, quickly enough for investors’ liking. Verizon, for example, has all but given up on expanding its FiOS fiber footprint to focus on making inroads in the wireless video and advertising markets.
Smaller telcos, like Windstream, CenturyLink, and Frontier, have similarly shifted their focus toward enterprise services, and tend to only upgrade aging DSL lines in the most profitable areas. In many instances, these companies are so saddled with debt from repeated mergers and acquisitions, upgrading their networks at scale is now impossible.
As a result, the nation’s cable broadband providers are running away with a greater monopoly over broadband than ever before across countless U.S. markets, gobbling up the lion’s share of broadband subscribers while the nation’s telcos hemorrhage frustrated DSL users at at alarming rate.
Data from Leichtman Research Group indicates that during the first three quarters of last year, the nation’s cable providers added roughly 2 million broadband subscribers. In contrast, the nation’s phone companies lost around 430,000 subscribers, most of them users tired of waiting for broadband upgrades that were never delivered.
And while many try to argue that wireless networks (especially the 5G standard) will somehow fix this lack of competition, that ignores a few unsightly realities.
For one, the backhaul connectivity that feed these wireless networks are all monopolized by just a handful of companies (traditionally Verizon, CenturyLink, or AT&T), keeping prices high. And wireless remains particularly undercooked in rural areas, where users have lately found themselves kicked off the network for treating wireless connections like their wired counterparts.
5G networks should help in this regard to some degree, but the wireless industry has never been known for its bargain-basement pricing, and it will take years before 5G is a suitable replacement for fixed-line networks, especially in more rural areas.
This lack of competition is a major reason why more and more towns and cities are now building their own broadband networks. But that in turn is why ISP lobbyists have successfully passed protectionist laws in more than 21 states designed to stop that from happening. It’s a ridiculous cycle of corruption and dysfunction that shows no sign of abating anytime soon