French-owned U.S. cable company Altice has announced it will soon be offering its users 86 percent slower broadband service—for the same price. It’s the latest example of a U.S. broadband market that sees little incentive to compete on price or performance in the face of limited competition and flimsy oversight.
Starting on July 12, the company will be significantly reducing upstream speeds across most of its broadband tiers for new users. For example, users on the company’s 100 Mbps downstream tier will see their upstream speeds slashed from 35 Mbps to just 5 Mbps. Users on its 200 Mbps tier will see their upstream speeds reduced from 35 Mbps to 10 Mbps.
The changes won’t impact existing users for now, but users hoping to switch plans or nab a new bundle promotion will inevitably be shoveled toward the new, slower tiers.
Altice, which acquired U.S. cable company Cablevision and its Optimum broadband service in 2016, told Ars Technica that the changes were not due to any performance issues on the network. Instead, Altice claimed the changes were an attempt to bring the company’s service speeds "in line with other ISPs and aligned with the industry."
In short, Altice intends to take full advantage of limited competition and feckless government oversight by charging users more money for a worse product.
“This is jaw-droppingly perverse logic—and a neat parable about the problems of market-based service provision without competition,” activist and author Cory Doctorow said of the company’s plans. “It’s not always the case that competition sends corporations on a race to the top — but for-profit monopolies always race to the bottom.”
Up to 42 million Americans lack access to broadband. 83 million currently live under a broadband monopoly where they have the choice of just one ISP—usually Comcast. Millions more live under a duopoly, where their only choice consists of a cable giant or a phone company that has often neglected its DSL lines and aging infrastructure.
With virtually no competition at faster speeds, entrenched cable providers have little incentive to compete on price, shore up spotty coverage, or improve what is historically terrible customer service. And with regulators and lawmakers heavily lobbied by the same companies, US leaders routinely turn a blind eye to this very profitable dysfunction.
Frustrated by this gridlock, more than 750 US towns and cities have pursued some variation of community-owned broadband. Studies have shown such home-grown networks routinely provide faster broadband service at significantly lower rates.
But prodded by telecom giants, 17 States have monopoly-backed laws restricting community broadband. Ohio lawmakers are currently debating embedding new restrictions that would be included as part of a budget bill. Last February, House Republicans proposed a new law that would have banned community broadband in the US entirely.
The Biden administration’s vague $100 billion broadband plan originally included a promise to fund community broadband. But it’s unclear if such a promise will survive Congressional infrastructure negotiations, which have already reduced the proposal’s scope by $35 billion in a bid to gain Senate Republican approval.
“Public broadband provision is a no-brainer, just like electrification and interstates — essential public goods that require large-scale, muscular government intervention to weld the nation together and propel it into the future,” Doctorow said.