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Broadband competition is not "limited"

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.

 

 

Q&A One Pager Debunking Net Neutrality Myths