dslreports logo
 story category
Commerce Dept Study Shows Limited Competition at Faster Speeds

A new study by the Commerce Department confirms something FCC boss Wheeler has been repeating in recent months: competition for faster speeds in the U.S. barely exists because of lagging DSL networks. Wheeler has consistently stated that two-thirds of the country doesn't have more than one competitive choice for speeds over 25 Mbps, and that's something the study reiterates.

Click for full size
The study found that at speeds of 3 Mbps -- 98% of the country had a choice of at least two mobile ISPs, and 88% had the choice of two or more fixed ISPs. The study proceeds to note that 3 Mbps isn't good enough for many online behaviors (it doesn't even meet the FCC's stale 4 Mbps definition of broadband).

Speed things up, and the dearth of competitive options becomes more apparent. The study found that at speeds of 25 Mbps or higher, only 37% had the choice of two fixed-line service providers. Just 9% had the choice of three or more providers (aka real competition). At speeds of 100 Mbps or greater, only 8 percent of the population had access to two or more providers, and 1 percent had access to three or more.

And for all the talk of 1 Gbps taking over, the study found that just 3% of the population has access to speeds of 1 Gbps.

As noted repeatedly, while cable has found speed upgrades moderately inexpensive due to DOCSIS upgrades, phone companies like AT&T and Verizon have been unwilling to upgrade millions of DSL users. As a result they're either hiking prices until those users leave to cable or wireless, or they're selling them to smaller telcos with less cash -- and the same minimal competitive incentive -- to upgrade.

"We know that competition typically drives down prices. And we also know that increasingly, higher Internet speeds are required for optimal functionality of popular, high-bandwidth computing applications," says U.S. Commerce Department Chief Economist Sue Helper. "As more and more commerce and information move online, we risk further widening the digital divide if access to affordable, higher speed Internet doesn’t keep pace."

You can find the report's full findings here (pdf).
view:
topics flat nest 

TechyDad
Premium Member
join:2001-07-13
USA

TechyDad

Premium Member

Full Numbers In The Report

The actual report gives the full results.




You need to subtract the "Two or more" figures from the "One or more" to get the percentage of people with only one ISP at that speed. At 25Mbps, it breaks down to 14% with no access, 49% with one option, 28% with two options, and 9% with three or more options.

davidc502
join:2002-03-06
Mount Juliet, TN

1 recommendation

davidc502

Member

Re: Full Numbers In The Report

Those are very dismal results...

37% of people have access to 25mbps with 2 or more providers.... That's pretty piss poor choice.

8% of people have access to 100mbps with 2 or more providers.... I'm sure you'll find of the 8% it's mainly the more affluent areas in the U.S.

As long as the United States continues to allow Corporations to buy up the competition, these are the results we will continue to see>>>> Less Choice, Higher prices, and poor service.

We have ourselves to blame I suppose.

TechyDad
Premium Member
join:2001-07-13
USA

TechyDad

Premium Member

Re: Full Numbers In The Report

Even the 10Mbps numbers aren't great. 6% have no access, 24% have one provider, 42% have 2 providers, and 28% have 3 or more providers.
InvalidError
join:2008-02-03

InvalidError to davidc502

Member

to davidc502
Wired first mile is a natural monopoly: most markets are unable to make more than two networks economically viable.

If you split the market with three competing providers, you incur nearly three times the capital cost per subscriber and need to charge nearly 3X as much for the same services. If you want fast and cost-efficient first-mile, what you need is a regulated monopoly to eliminate cost duplication.

This problem is nowhere near as bad on wireless due to tower-sharing, roaming agreements, only having to put new towers where load dictates one is needed, etc.

Very few places in the world have more than two significant competing wire-line infrastructures within any given serving area.
dfxmatt
join:2007-08-21
Crystal Lake, IL

dfxmatt

Member

Re: Full Numbers In The Report

"Wired first mile is a natural monopoly"

this is untrue. Wired is a monopoly if you do illegal things to create one during the (last mile) which is what I presume you meant. Illegal things such as : locking out access with something you control, actually tearing up anything else people try to do, etc. This has been done by comcast and verizon before.

The first mile of wired, so to speak, is almost entirely open access.
InvalidError
join:2008-02-03

InvalidError

Member

Re: Full Numbers In The Report

The physical reality is that having triple infrastructure over-builds costs nearly three times as much as everyone sharing a single infrastructure and that means three times as much capital spending to serve the same market.

Even if the regulatory red tape against new entrants was removed to help them build a third wire infrastructure, the existing incumbents still have the benefit of having built and amortized large chunks of their infrastructure back when market share was nearly 100-100 - until converged services on coax and phone lines came long, almost everyone subscribed to both TV and POTS.

Unless the hypothetical new entrant offers services the incumbents cannot match in a timely manner, the incumbents have the option of slashing prices and make the would-be new-entrant choke on its initial build-out debt.
BiggA
Premium Member
join:2005-11-23
Central CT
·Frontier FiberOp..
Asus RT-AC68

BiggA

Premium Member

Re: Full Numbers In The Report

I don't think 3 physical plants is that big of an issue for suburban and urban areas. It's the exurban areas where it begins to be a problem. I know many exurban areas here in CT that have U-Verse and cable, and similar areas in RI that have FIOS and cable, so if they can support 2 physical plants, surely suburban areas can support 3 providers.

Yes, the amortization issue is a big one, although if a provider comes in and runs GPON, then they have a huge advantage over HFC and especially POTS-based plants.

Remember, however, that those TV and POTS subscribers were paying a small fraction of what today's triple play customers pay, and analog coax plants were relatively expensive to maintain on a day to day basis compared to today's HFC plants, which have a much steeper upfront investment, but a smaller day to day cost, since there's no traps, no one stealing cable, etc.

This is true, price competition is always an issue for a new entrant. That's why fiber is good, since the new entrant can differentiate itself, even if it costs the same as the existing one.
BiggA

BiggA to InvalidError

Premium Member

to InvalidError
There are some with 3 physical plants. It works fine in relatively dense urban/suburban areas assuming that there aren't laws put in place by the incumbents just to be a PITA to anyone trying to enter the market.
InvalidError
join:2008-02-03

InvalidError

Member

Re: Full Numbers In The Report

Yes, there are SOME places. But they are VERY rare.
BiggA
Premium Member
join:2005-11-23
Central CT
·Frontier FiberOp..
Asus RT-AC68

BiggA

Premium Member

Re: Full Numbers In The Report

Well actually, while there are VERY few places with 3 GOOD physical plants (like RCN, Comcast, Verizon FIOS), there are quite a few with 3 physical plants of some type. My neighborhood has DSL, and two cable companies, and some areas in my town also have U-Verse.

Basically anywhere with a cable overbuilder, an incumbent cable provider, and a telco, or the two typical incumbents and a local fiber ISP have 3 physical plants.

Yes, it is the exception to the rule, but there are still millions of households passed by 3 physical plants. Everywhere there is local fiber, RCN, or WOW has 3 physical plants, with some areas in Columbus, for example, having TWC, WOW, and U-Verse. The ultimate is probably what a few towns in Metro Boston have, with Comcast, RCN, and FIOS.

cork1958
Cork
Premium Member
join:2000-02-26

cork1958 to davidc502

Premium Member

to davidc502
"The study found that at speeds of 25 Mbps or higher, only 37% had the choice of two fixed-line service providers"

I wouldn't really call that a piss poor choice. In fact, I can't believe that many have a dual choice of fixed line speeds like that!

I live in a relatively decent sized city and only have 1 choice with that speed and that's a take it or leave choice of $50 a month for what they THINK I want or need! Granted, $50 isn't going to break the bank, but for how I use the internet now a days, I don't really need to spend that much on internet.

TechyDad
Premium Member
join:2001-07-13
USA

TechyDad

Premium Member

Re: Full Numbers In The Report

Same with me. FIOS isn't in my area so my only option is Time Warner Cable. If TWC decided to charge $100 a month for 10Mbps Internet, there would be no option but to pay them or go without Internet. (Not an option for a web developer.)

TIGERON
join:2008-03-11
Boston, MA
Motorola MG7550

1 edit

TIGERON

Member

We need real broadband competition, not metered broadband limited choices

Click for full size
metered bill
this is why we need choices.

»www.change.org/p/city-of ··· petition

»www.change.org/p/sonic-n ··· lifornia

»petitions.moveon.org/sig ··· =4516097

KennyWest
@98.28.97.x

KennyWest

Anon

Re: We need real broadband competition, not metered broadband limited choices

that's not a metered bill. And any person that calls 411 enough to spend $20 deserves to be charged the full amount and then some.
chgo_man99
join:2010-01-01
Sunnyvale, CA

chgo_man99

Member

Re: We need real broadband competition, not metered broadband limited choices

I bet after the rent or mortgage he pays in Pacifica, CA in Bay Area, one of the most expensive regions in this country, $60 is nothing.

hyphenated
@75.149.119.x

hyphenated to KennyWest

Anon

to KennyWest
What's the line Internet Usage ... [1] ... $30 under Itemized Charges and Credits (Internet Services)?

ATT HSI ELITE is only 36$? Wow
xthepeoplesx
join:2013-10-21

xthepeoplesx

Member

Grossly inflated...

If these numbers are anything like what Broadbandmap.gov provides, then its a completely grossly inflated and bull report. The companies reported to them that I have 5 choices all above 10mbps. The truth is, I dont have a single one! It all depends on where they got their reports.

Packeteers
Premium Member
join:2005-06-18
Forest Hills, NY

Packeteers

Premium Member

Re: Grossly inflated...

actually, since it's year old data and many isps have doubled their bandwidth for the same price in many urban markets this past year, the most recent figures would probably not seem inflated to you at all.

techguyga
Premium Member
join:2003-12-31
00000

techguyga

Premium Member

Re: Grossly inflated...

Yet the ones in the urban markets with NO wireline access (read me) still have NO access.
BiggA
Premium Member
join:2005-11-23
Central CT

BiggA

Premium Member

Re: Grossly inflated...

Where?

techguyga
Premium Member
join:2003-12-31
00000

techguyga

Premium Member

Re: Grossly inflated...

There are too many areas in the Atlanta metro to name. I'm in a subdivision of 250+ homes that has no fixed line internet access. Most everyone is using satellite with a handful on cellular data.
BiggA
Premium Member
join:2005-11-23
Central CT

BiggA

Premium Member

Re: Grossly inflated...

And the incumbent cable company won't build out? And AT&T won't install a VRAD? That's insane on both counts...

techguyga
Premium Member
join:2003-12-31
00000
ARRIS BGW210-700

techguyga

Premium Member

Re: Grossly inflated...

Yeah, Charter has no interest because they don't want to spend the money to trench in the neighborhood. The subdivision is only a couple of years old, but when it was starting, Charter was just coming off their bankruptcy and didn't install copper before concrete was poured.

There is AT&T copper to every house, but we're only eligible for dial-tone. Again, they don't want to spend the money. Their U-verse expansion is stopped, and they're trying to dump DSL users. They'd rather force customers to wireless or lose them than maintain their copper.

We're just in a broadband black hole. I wouldn't have bought the house had I even guessed that. Never thought to ask, though, as I came off 23 acres in the middle of nowhere with both Comcast and VDSL available there.
BiggA
Premium Member
join:2005-11-23
Central CT
·Frontier FiberOp..
Asus RT-AC68

BiggA

Premium Member

Re: Grossly inflated...

Huh? Coax is run after the roads and sidewalks are already in. The developer who builds the road puts in PVC conduits that are spec'ed for power, POTS, cable, and fiber, and then the various utilities pull their wire through later. Where my parents live, the fiber conduits have been empty since 1998 I think when the road was put in, since AT&T and now Frontier didn't/don't want to spent the money.

That's pretty pathetic of both ISPs considering the market and how relatively easy the installation is.

Also, what kind of BS franchise agreement did the town get from Charter? Here in CT, we've been 100% coverage since the late '70's/ early '80's, but in other places, the franchises allow less than 100% coverage, but with a requirement that's something like if 10 houses in a cable mile want service, they have to provide it.

Metrocast ended up having to get permits from the US Army Corps of Engineers to lay submarine fiber and build a cable plant in New Hampshire to an island because it had 10 homes that committed to basic cable for a year and were within one cable mile. There's no way they will ever make money on it, but they had to protect their franchise that includes a touristy town, expensive summer places, and several hundred hotel rooms with individual boxes in each room.

The ironic part is that in the mean time, Verizon sold out to FairPoint, which spent virtually nothing to get DSL running on the island by putting a fiber-fed RDSLAM at the cable crossing site, utilizing the existing submarine crossing of 1950's copper that serves the island, and branches out to several other islands. If Verizon had done that, or if LTE had been around at the time, the residents likely would never have forced MetroCast to install cable in the first place.
BiggA

BiggA to techguyga

Premium Member

to techguyga
And why weren't they wired with cable TV either when they were built, or if they pre-date cable, in the 1970's when cable came along?
BiggA

BiggA to Packeteers

Premium Member

to Packeteers
Yeah, especially with TWC MAXX. And they totally missed the sweet spot of 50mbps.

techguyga
Premium Member
join:2003-12-31
00000

techguyga to xthepeoplesx

Premium Member

to xthepeoplesx
I literally just talked to a gentleman in our state broadband authority. He told me that if a single home in the census block is served, then the whole block shows served on the map.
wkm001
join:2009-12-14

wkm001

Member

The Physical Layer

It really is amazing how cable companies use a single piece of shielded copper and the phone companies use two pieces of twisted copper.
shmerl
join:2013-10-21

1 edit

shmerl

Member

Re: The Physical Layer

What is amazing about it? Twisted pair and coaxial cables are both old, but their usage started at different times. Twisted pair was used in telephone lines since the end of 1890s, while coaxial cables took much longer to see adoption (until 1930s at least) and even longer to see massive adoption. So prevalence of twisted pair isn't surprising. It's also obviously cheaper.

I'd expect fiber optical cables to catch up faster, but it also takes a long time.
BiggA
Premium Member
join:2005-11-23
Central CT

BiggA

Premium Member

Re: The Physical Layer

Fiber was ready for 100% mass deployment in the mid-2000's, Verizon got about 2/3 of the way there and gave up, AT&T never bothered to start. It's a business and political problem, not a technical problem.
shmerl
join:2013-10-21

shmerl

Member

Re: The Physical Layer

Yeah, most of those delays weren't technical, but all kind of side reasons.
BiggA
Premium Member
join:2005-11-23
Central CT

BiggA

Premium Member

Re: The Physical Layer

None of them were technical.
InvalidError
join:2008-02-03

InvalidError to wkm001

Member

to wkm001
The more amazing part about telephone is that phone has 24 pairs sharing a single shield ("binder") and a phone cable may have multiple such binders. That amounts to quite a heck of a lot of copper when there can be kilometers worth of cable with 500+ pairs between your home and the CO.
BiggA
Premium Member
join:2005-11-23
Central CT

BiggA

Premium Member

Re: The Physical Layer

Yeah, it's obsolete technology that needs to go bye-bye. 32:1 splits with xPON is the future (and the present for about 65% of Verizon's network).
DeLiver3
Premium Member
join:2004-09-01
Cincinnatus, NY
Actiontec F2250
(Software) pfSense

DeLiver3 to wkm001

Premium Member

to wkm001
said by wkm001:

It really is amazing how cable companies use a single piece of shielded copper and the phone companies use two pieces of twisted copper.

I agree, the technology has changed drastically to allow the use of these old assets. Like it or not, copper is still King for a lot of consumers.
quisp65
join:2003-05-03
San Diego, CA

1 edit

quisp65

Member

The anti-business political push has changed the public attitude.

During the Clinton years pushing ISPs as a utility would never fly. Public attitudes change but I feel some of the change has come from a political anti-business atmosphere, where we are more likely to view business as evil and less likely to empathize and look at the full picture and effect of our laws. Certainly there are pros and cons to Title II, and reasonable people can disagree, but I wish we would wait and give this thought later when our country is more empathetic to business.

We are in era of the cult of an anti-business personality.

•••••••
BiggA
Premium Member
join:2005-11-23
Central CT
·Frontier FiberOp..
Asus RT-AC68

BiggA

Premium Member

There's a lot wrong with this

1. 56% of people have 3 providers for 3mbps or higher? WTF? They must be counting CLECs running over the incumbent's copper, or counting DSL and U-Verse/FIOS separately, neither of which is truly offering 3 choices from 3 different companies with 3 different physical plants. And I am saying this as someone who does have 3 choices for 6mbps or faster, 6mbps DSL, and 100mbps cable from two different companies.

2. For the 25mbps to 100mbps, the year-old nature of this data is showing, as TWC MAXX upgrades have boosted this number significantly. When TWC is done with MAXX, or Comcast gobbles them up and goes to 105/20 in those markets, a large majority of America will have access to one provider offering 100mbps.

3. More than 8% of the households have 2 or more options at 100mbps or higher. I can say this with relative certainty, because FIOS alone covers about 15% of US households (18 million of 117 million total). Their four main competitors, CableVision, Comcast, TWC, and BHN, all offer 100+mbps service in most or all of their areas. TWC has upgraded most of their systems to MAXX that compete with FIOS, while Comcast and CableVision have had 100mbps service at varying price-points available for quite a while. There is no reasonably priced FIOS package above 75/75, but that's not the point, you can get up to 500/500 for some outrageous price. It's possible that the age of this data is showing again, since NYC, among other places, has so many people, and TWC has only just recently upgraded to MAXX.

4. We jump from 9% to 1% having access to 3 providers at 100mbps? This seems a bit suspect, either the 9% is a bit high, or 1% is low, or both. While there are areas with U-Verse and two cable companies, areas that have FIOS and two cable companies often have 3 providers over 100mbps, like near Boston with RCN/Comcast/FIOS or in NYC with RCN/TWC/FIOS. What's also strange is that relatively few U-Verse customers can get more than 24mbps, so I think both of those numbers are off.
mlcarson
join:2001-09-20
Santa Maria, CA

mlcarson

Member

Competition doesn't work in rural america

You aren't going to get competition where there's a high barrier to entry, an established incumbent provider, and a low population density. This describes rural America and you don't need a study to figure this out. The only reason there's ANY competition in most of this country is because two existing markets (Cable and Phone) evolved in to a third (Internet). The infrastructure to do this was already mostly in place and paid for by monopolistic pricing and/or your tax dollars.

If you live in a large urban environment, you might eventually get another provider to try and compete but this almost never happens in small communities. The only hope for these areas is municipal fiber but incumbents lobby to make these efforts illegal. It's way past time for a government effort like the REA (rural electrification act) for broadband. Competition is NOT going to get it done for most of the land mass of this country. Our government figured this out in the 1930's but can't seem to do so today.