Many of us who eat and sleep broadband have thought for a while that is Want to solve America’s problems? Start with broadband. It’s sure nice to the Fortune Magazine feel the same with an editorial from Adrianne Benton Furniss…
We believe too many people in the U.S. have been left behind—because broadband networks don’t reach them, the service is unaffordable, or people don’t yet have the skills to make use of this powerful tool.
One reason for this? Broadband market concentration is stifling the benefits of competition for consumers. Nearly three out of four people in the U.S. are served by a broadband monopoly or duopoly offering Internet download speeds of 100 megabits per second and upload speeds of 10 Mbps. An estimated 35% of people have only one choice of broadband provider; another 37% have just two to choose from. Without competition, people—especially those with lower incomes or those who live in rural areas—are threatened with artificially high prices, lower-quality service, and little innovation. A Wall Street Journal report published last year found that low-income areas and high-income areas pay similar median monthly costs (about $66) for stand-alone internet, but poorer areas get 40% slower speeds for the price.
Wealthier communities are two to three times more likely to have more than two choices for broadband providers than are communities with lower-than-average household incomes. With limited competition, it is perhaps unsurprising that Americans pay the second-highest broadband prices among OECD countries. Yet when new competition is introduced in broadband markets, the benefits are demonstrable. Look no further than Kansas City, Kan.; Chattanooga, Tenn.; Wilson, N.C.; and Longmont, Colo. for evidence that competition from a private or municipal broadband provider results in incumbent providers dropping prices and increasing speeds—but not in nearby areas the new competition didn’t serve.
So what can we do?
So, what can governments do? Right now, laws in 19 states restrict local communities from experimenting to increase broadband deployment. These laws should be revisited and repealed.
And when it comes to federal funding…
We believe Congress and the FCC should require, as a condition for funding this broadband deployment, true high-speed service at actually affordable prices—for instance, service rated at 50 Mbps for upload and download with unlimited usage for $10 per month to eligible recipients.
Affordable service is crucial.