The Future of American Broadband Is a Comcast Monopoly

The FCC insists a new report proves that broadband competition is raging and prices have dropped. The reality is notably different.

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Dec 14 2018, 4:00pm

Image: Shutterstock

The FCC this week released a new, 182-page Communications Marketplace Report it claims proves the US broadband industry is awash with vibrant competition. In reality, consumer groups, third-party data and the report itself paint a starkly different picture; one where consumers increasingly only have access to just one ISP: Comcast.

FCC Chairman Ajit Pai attempted to put a rosy spin on the report, and commissioner Brandon Carr issued a statement claiming it showed unprecedented competition and price reductions across the broadband market thanks to Pai’s policies.

“This is not like any competition we’ve seen before,” Carr proclaimed. “After broadband investment fell during the final two years of the last Administration, the key indicators have turned around. Broadband investment is up. Speeds have increased. Infrastructure deployments have accelerated. And prices have declined. All great signs for consumers.”

But actual consumer groups and the FCC’s own data indicate a different reality.

For one thing, all publicly-available earnings data and public CEO statements contradict Carr’s claim that investment declined during the last two years of the previous FCC, something both ISPs and the Pai FCC have repeatedly, falsely attempted to blame on net neutrality.

The FCC also appears to have simply buried many of the less flattering portions of the report under layers of policy arcana and footnotes. For example, data showing that DSL providers like Windstream and CenturyLink routinely fail to deliver advertised speeds is buried on page 474 of a 581 page collection of associated appendices few will read:

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Image: FCC



Most DSL providers still fail to deliver the FCC’s base definition of broadband (25 Mbps) to huge swaths of their footprints. Why? Despite billions in subsidies over the years, upgrading these aging networks isn’t profitable enough, quickly enough, for Wall Street’s liking. As a result, many telcos have shifted their focus elsewhere, leaving frustrated users in their wake.

As a result, companies like Comcast and Charter Spectrum are quietly securing a greater monopoly over broadband. Less competition means that, contrary to Carr’s claims, American consumers continue to pay some of the highest prices for broadband in the developed world—while receiving some of the worst customer service of any sector in America.

Few companies are eager to go head to head with Comcast. And towns and cities frustrated by a lack of options often run into protectionist laws passed in more than 21 states (quite literally written by giant ISPs) when they attempt to build their own networks.

Other contradictory findings are similarly buried deep in the FCC’s latest report. Page 48, for example, quietly informs readers that telco fiber upgrades “appear to have slowed recently,” highlighting both CenturyLink and Google Fiber’s stalled ambitions.

Consumer groups weren’t particularly impressed by the FCC’s claims.

“This slowdown coincides with the complete deregulation of the ISP industry under the “Restoring Internet Freedom Order” and a massive tax cut stimulus from Congress to the tune of billions,” the EFF said in a blog post. “We are the only advanced market in the world to take this approach to the broadband industry and the results of dwindling and declining competition for the future comes as no surprise.”

The EFF says its own data indicates that 68 million American households either have access to no broadband or just one ISP (most often Comcast), resulting in prices that are 200 to 400 percent higher in uncompetitive markets.

While many look to fifth-generation (5G) wireless to provide supplemental competition, 5G’s impact could be muted courtesy of both Sprint and T-Mobile’s looming megamerger and the monopoly AT&T and Verizon enjoy over cellular tower connectivity.

Lawmakers and Pai’s own fellow Commissioners have also stated that the FCC and industry’s coverage claims are far too generous, something the FCC itself acknowledged just this week.

“The draft report says that nearly one hundred percent of our country is served by one or more LTE wireless providers, which is a joke,” argued US Representative Mike Doyle in a statement.

At the heart of the problem is the FCC’s broadband mapping methodology, which declares an entire zip code “served” by broadband if just one home in a census tract has service. Efforts to improve this methodology have repeatedly been derailed by ISP lobbyists with a vested interest in protecting the broken, but profitable, status quo, critics charge.

“In evaluating the availability and competition in the fixed broadband market, the Commission continues to rely on self-reported data by broadband providers and has been found to be inaccurate and overstates service availability in much of the US,” consumer group Public Knowledge said in a statement.

Users looking to confirm the FCC’s rose-colored-glasses approach to measuring broadband need only go check out the agency’s $350 million national broadband map, which routinely hallucinates both competitors and the speeds they’re able to offer consumers.

While the FCC insists that broadband is getting cheaper, faster, and more widely available thanks to its recent policies (like killing net neutrality), most American consumers’ first-hand experiences—and the FCC’s own data—continue to paint a dramatically different picture.

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