U.S. broadband prices need to be pushed down by at least 25 percent and typical speeds need to be increased dramatically to catch up to countries such as France and Japan, according to a new report from Consumers Union and the Consumer Federation of America.
Consumers Union is the sponsor of this blog.
Titled “Broadband in America: A Policy of Neglect is Not Benign,” the study calls on the incoming Obama administration and Congress to pursue policies to help prevent overcharging, blocking and discrimination against consumers and small businesses on the Internet.
Of particular concern are communities where competition among Internet providers has not emerged. In those communities, the groups suggest the federal government should step in to stop price gouging and promote low-cost broadband Internet access.
The Bush administration’s telecommunications policies have failed to achieve affordable access to a ubiquitous, advanced network, the report says. Among the results of those policy failures, the report says, the digital divide has not been closed and the U.S. has fallen behind at least a dozen other advanced industrial nations in the deployment and adoption of broadband communications.
“Inadequate competition makes it essential to reinstate policies that can squeeze prices down 25 percent and drive economic growth through a more open Internet,” says Gene Kimmelman, CU’s Vice President for Federal and International Affairs. “Advanced industrial nations in Europe and Asia recognized the need for aggressive policies to promote deployment of broadband and keep prices down and they shot ahead of the U.S. in the past decade.”
The report examines data on Internet adoption and broadband deployment in 2001 and 2007/2008 to measure both the extent of the digital divide with the U.S. and the status of broadband networks in a number of nations.
Among the key findings:
• In 2001, 54 percent of households did not have the Internet. In late 2007, 49 percent of households did not have broadband.
• About 25 percent of households with incomes below $25,000 per year had broadband in 2007; whereas over 80 percent of households with incomes above $75,000 did.
• Rural areas lag behind urban areas in broadband adoption by 10% to 20%.
• In the U.S. consumers pay substantially higher prices for slower service than in a dozen developed nations.
• In 2001 the OECD rankings on Internet penetration put the U.S. in third place; by 2007 it had fallen to 15th on broadband.
• Half a dozen studies that try to “excuse” the lag in U.S. performance by introducing explanatory variables, like income, education, population density, urbanism and inequality only reaffirm the finding that the U.S. is underperforming.
“The Bush administration allowed a cozy duopoly of telephone and cable companies to gain a stranglehold on the advanced telecommunications network,” notes Mark Cooper, Consumer Federation of America’s Director of Research. “It allowed the cable and telephone companies to consolidate control over wires and wireless networks through mergers, foreclose competition from new entrants by denying access to monopoly network elements, and undermine competition from Internet service providers by eliminating the obligation to operate the telecommunications networks in a nondiscriminatory manner.”
Click here to read the full study.
