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Broadband competition is not "limited"
Submitted by Scott Cleland on Thu, 2009-10-01 09:22
The leading justification offered by FCC Chairman Genachowski in his "Open Internet" speech announcing his intention to pursue formal net neutrality regulations was that "limited competition" was "simply a fact."
A fair review of the facts shows that broadband competition is anything but limited, it is actually robust, dynamic, and increasing in intensity.
- The problem comes from a choice to assume a static and pessimistic view the competition glass as half empty, because it is not perfect.
- This is not a fair representation of the broadband competitive situation because the core markets involved were originally price regulated monopolies but now are increasingly-dynamic, fiercely competitive markets where literally many tens of millions of Americans have taken advantage of available competitive choices.
I would like to highlight some important and illuminating competitive facts presented in an outstanding post by Link Hoewing over at Verizon's Policyblog:
- "...the facts show that the U.S. broadband marketplace is, indeed, delivering the results one expects from competition and has been for more than a decade.
- Prices have declined. The average price of entry-level broadband for 5 major providers moved from $50 a month in 2001, to $33 in 2004, to $25 in 2007. Verizon’s own entry-level price in 2009 is $17.99 a month, with a 12 month contract.
- Output has increased: According to Pew, seven out of 10 households still used dial-up modems in 2004. Today only 1 in 10 households use dial-up, while the U.S. broadband marketplace is perhaps the largest in the world, with nearly 70 million households connected, up from just 3.2 million in 2000.
- Furthermore, typical broadband speeds have more than doubled since 2004: DSL has moved from 1.5 mbps to 7; cable has moved from an average of 1.5 to 3 mbps to 8-16 mbps. Fiber didn’t exist in 2004. Today it’s available to more than 15 million households and delivers speeds of up to 50 mbps up and 20 mbps down.
- Furthermore, Internet use is increasingly un-tethered, with portable connections evolving into mobile. In any given month more than 1 in 3 users now report they’ve used wireless to reach the Internet, up from almost no one in 2004. The U.S. now has 4 nationwide 3G wireless providers, some with plans for 4G wireless that will offer 5 to 12 mbps speeds. A 5th company, Clearwire, is gearing for a nationwide launch of a 4G service using WiMax technology. The U.S. has 70,000 WiFi hotspots, the most in the world.
- According to Nielsen, more than 40 million Americans use mobile devices to access the Internet, more than in any other country in the world."
In short, a fair review of these broadband competitive facts indicates that broadband competition is not "limited," but vibrant.