Policy

Commerce: Broadband Choice Dwindles As Speeds Increase

Report Buttresses Administration Push For Higher Speeds 12/17/2014 11:15 AM Eastern

A new report from the Department of Commerce finds that there is "far more" broadband competition at slower speeds than higher.

 

That is according to a report from the Economics and Statistics Administration and based on the National Telecommunications & Information Administration's National Broadband Map and Census Bureau figures, though those figures are a year old (from December 2013), so it is a snapshot of a target that is always moving, generally toward higher-speed rollouts.

 

The report appears to buttresses arguments by the Administration and FCC that high-speed should be the new definition of broadband access http://www.broadcastingcable.com/news/washington/wheeler-natoa-broadband...).

 

That was certainly the takeaway of Commerce Chief Economist Sue Helper. “We know that competition typically drives down prices. And we also know that increasingly, higher Internet speeds are required for optimal functionality of popular, high-bandwidth computing applications," she wrote in releasing the report. "As more and more commerce and information move online, we risk further widening the digital divide if access to affordable, higher speed Internet doesn’t keep pace.”     

 

The report found that at 3 Mbps download speeds, 98% of the population had a choice of at least two mobile ISP's and 88% had two or more fixed ISPs available. But, and again the report appears to echo Wheeler arguments, when multiple household members are streaming video, music and games, 3 Mbps won't cut it. The report points out that at 3 Mbps, it would take 6 hours to download a 6 gigabyte movie, as compared to 16 minutes with 25 Mbps.

 

Wheeler has signaled that 10 Mbps, and more likely 25, should be the new "table stakes" for competitive broadband.

 

When speed is bumped to 10 Mbps, "the typical person" can choose from two fixed ISPs or three mobile ISPs. At speeds above 10 Mbps, only 37% had a choice of two or more fixed services.

 

The study also found that 40% of the population did not have access to "very-high-speed" broadband, defined as 100 Mbps or greater. Of those that did, only 8% had a choice of ISPs. Mobile service is virtually nonexistant at those speeds, the report pointed out.

 

"All else being equal, having fewer competitors at a given speed is likely to drive up prices," said Helper in a blog on the report. "As a result, some consumers will decide not to adopt Internet at all, some will choose a slower speed and some will economize in other ways."

 

Scott Cleland, who heads NetCompetition, which is supported by ISPs including members of the National Cable & Telecommunications Association and CTIA, saw the report as a way to justify regulation of the Internet.

 

“Both the NTIA and the FCC are artificially ‘moving the goalposts’ of broadband competition to justify more regulation, potentially including Title II regulation of the Internet,” he told Multichannel News/B&C. “This is a de-competition policy to justify more regulation, which goes against the policy of the bipartisan 1996 Telecom Act, which was to promote competition and reduce regulation, and to preserve the competitive Internet unfettered by Federal or State regulation. Mandating monopoly Title II regulation on the most competitive facilities-based broadband market in the world would be the antithesis of a pro-competition and open Internet policy.”

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