Americans Have Unacceptably Poor Choices Of Broadband Provision, Says FCC Chairman

John Hopton for redOrbit.com – Your Universe Online

Federal Communications Commission (FCC) chairman Tom Wheeler said this week that Americans suffer a lack of realistic choices when it comes to high speed broadband providers, a problem which he intends to rectify.

For desirable speeds of 25 Mbps, 55 percent of households have only one provider option, and for almost 20 percent there is no possibility at all of such a high speed connection. Some areas of the country may have the choice of several Internet providers, but not all of them can offer optimal speeds. Less than 2 percent of Americans can get 50 Mbps delivery from three or more broadband providers.

In a speech to the tech business incubator 1776, Wheeler said that, “There is an inverse relationship between competition and the kind of broadband performance that consumers are increasingly demanding. This is not tolerable. My goal is not to criticize but to recognize that meaningful competition for high-speed wired broadband is lacking and Americans need more competitive choices for faster and better Internet connections.”

Wheeler went on to say that even where consumers do have competitive choices, switching costs are prohibitively high. “Once consumers choose a broadband provider, they face high switching costs that include early termination fees and equipment fees,” he explained. “And, if those disincentives to competition weren’t enough, the media is full of stories of consumers’ struggles to get ISPs to allow them to drop service.”

The Commission is considering whether download speeds of 10 Mbps or higher should be required for Internet service to qualify as broadband or high-speed. It also promises further proactivity to ensure more diversity and better service in the future. “What is the FCC prepared to do in the face of this competitive reality?” asked Wheeler. “As must be clear by now, incentivizing competition should precede regulation. We must try our best – companies and communities, incumbents and insurgents – to foster more competition. The best answer for limited competition is more competition, plain and simple.”

There is evidence that emerging options such as Google Fiber will assist in broadening competition, but there are currently several obstacles to a more vibrant marketplace. Wheeler is concerned that DSL services aren’t living up to expectations, stating that “Traditional DSL is just not keeping up. Today it seems clear that mobile broadband is just not a full substitute for fixed broadband.” Equally, the proposed merger of major ISPs Comcast Corp and Time Warner Cable Inc, although not covering the same areas, raises further questions of reduced choice. The FCC intends to oppose monopolies, as well as cultivate new players and scrutinize state legislation that may stifle competition.

Harold Feld, Senior Vice President with open Internet activist group Public Knowledge commented that, “As much as we hope that nascent competitors like Google Fiber will grow, we have spent too much time hoping for a miracle. If the FCC wants to see new competitors, it needs to act on pending complaints by competitors that incumbents already use their market power to smother competition.”

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