The real broadband competition situation

Bringing down the cost of broadband is an obvious path to increasing accessibility and economic opportunity. Joshua Stager gives a great overview of the problem and potential solutions in TechDirt. Their research showed the average internet bill is $68.38 per month!

I want to zoom in on the competition data. The last FCC Internet Access Services report makes the bold claim that 18% of census blocks are served by two broadband providers. And 81% have access from 3 or more providers — no way! A footnote confesses they’re including two satellite internet services (HughesNet and ViaSat). If you know anyone who has used those services, the latency is horrific and they are super expensive. They should not be included.

If you take out the satellite providers, you get a more believable picture. The chart below tries to match the 25/3 column of the above chart as closely as possible. 32% of census blocks have no competition at all. There are two providers in 30% of census blocks. And only 21% of census blocks have 3 or more providers. (*All the usual disclaimers about FCC Form 477 data over-counting access apply.)

I’m a great example of how the benefits of broadband competition are benefiting those who need help the least. I have access to three broadband providers, two cable and one fiber optic, Fios. I pay $40/month (plus a little bit in fees) for 200 Mbps from Verizon. So, I pay $0.20/Gbps which according to PC Mag must be about the lowest in the country.

There’s a long way to go to provide the right incentive mix to add competition in broadband services. Let’s start by using charts that aren’t drastically misleading.