FreePress Report on the Woeful State of Broadband in America

FreePress, Consumer Federation of America, and Consumers Union have released an informative report on how the US is lagging behind the rest of the world with regard to broadband.

In the report, FreePress et. al. take the FCC and Commissioner Martin to task for painting a misleading rosy picture of broadband use and deployment across the US. They highlight a number of important, but often overlooked aspects of how the FCC evaluates broadband deployment (which they are required to do yearly by law):

• The FCC overstates broadband penetration rates. The FCC report considers a ZIP code covered by broadband service if just one person subscribes. No consideration is given to price, speed or availability of that connection throughout the area.

• The FCC misrepresents exactly how many connections are “high-speed.” The FCC defines “high-speed” as 200 kilobits per second, barely enough to receive low-quality streaming video and far below what other countries consider to be a high-speed connection.

• The United States remains 16th in the world in broadband penetration per capita. The United States also ranks 16th in terms of broadband growth rates, suggesting our world ranking won’t improve any time soon. On a per megabit basis, U.S. consumers pay 10 to 25 times more than broadband users in Japan.

• Despite FCC claims, digital divide persists and is growing wider. Broadband adoption is largely dependent on socio-economic status. In addition, broadband penetration in urban and suburban in areas is double that of rural areas.

• Reports of a broadband “price war” are misleading. Analysis of “low-priced” introductory offers by companies like SBC and Comcast reveal them to be little more than bait-and-switch gimmicks.

• The FCC ignores the lack of competition in the broadband market. Cable and DSL providers control almost 98 percent of the residential and small-business broadband market. Yet the FCC recently eliminated “open access” requirements for DSL companies to lease their lines, rules that fostered the only true competition in the broadband market.

I think one of the most important findings of this report is something I’ve been talking about for a while, namely the misleading pricing that cable/telco companies have been promoting. Also important is the report’s assertion that there is no real competition in the broadband market, and that wireless and satellite broadband should even be considered anything but a fringe part of the market. All of the findings in the report are based on published facts, many of them provided by the FCC. Every statement FreePress makes cites the relevant source for information.

If you read one thing this week, make it this report!