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Senator Begs FCC to Pay Attention to Soaring Broadband Prices
Though Genachowski is Almost Out the Door...
by Karl Bode 10:33AM Thursday Mar 14 2013
Over the last few weeks both AT&T and Verizon have been raising rates substantially for their lower-grade DSL services, in some cases as much as 25% for low speed (as low as 768 kbps) connections that cost the carriers very, very little to provide. Those price hikes are part of a concerted effort to push those users (who the companies don't want to upgrade) preferably over to more expensive wireless services, or to new cable operator partners -- who'll then sell them bundled wireless anyway.

Most regulators and media outlets have been oblivious to the cozy plan afoot here, despite the fact it could sever tens of millions of lines, will create a less competitive fixed line broadband market, while driving up the cost of data for everyone. Dave Burstein over at DSLPrime interestingly notes that our reports here on the latest telco DSL hikes hikes appear to have gotten the attention of Connecticut Senator (and former AG) Richard Blumenthal:
New customers at Verizon are in even worse shape. After the introductory period, Verizon now wants $57 for one meg, now requiring you take a phone package. It’s at least $67/month for anything faster than one meg. For FiOS, the cheapest service they offer is an amazing $84.95 - and in some FiOS areas they won't sell DSL any more. Bode also reports AT&T increases that appear to be 10-15% but details vary. Neither Cecilia Kang at WsahPo nor any other DC reporter has yet picked up the AT&T story, so DSLR was almost certainly the inspiration for the question.
I blush. Blumenthal then did something I hardly ever see a politician do: he went to FCC boss Julius Genachowski and asked him why he wasn't investigating the suddenly soaring prices in the broadband industry:
The Senator challenged Julius Genachowski. "AT&T announced a rate hike on their DSL service. This comes just a week after Verizon announced an almost identical rate hike. Both of them trouble me. We ought to pay closer attention." JG tried to change the subject, saying "We’ve seen much better trends in mobile competition over the last couple of years than we’ve seen before.” With the Senator glaring, he added "I’m troubled by rate increases that aren’t based on competitive factors." Then Jules said he’d work with Blumenthal investigating prices.
Genachowski has repeatedly insisted he's an FCC boss with a laser-like focus on broadband, yet as Burstein notes broadband fixed line growth has effectively stalled on his watch (while the use of caps and unreliable meters has soared). The agency has also repeatedly and painfully ignored competition issues and the resulting soaring prices. The FCC's national broadband plan, for example, only paid fleeting lip service to competition, while the FCC's already inaccurate broadband maps don't bother to collect data on price because the carriers didn't want them to.

The problem is that after ignoring soaring prices and competitive failings for his entire tenure, Genachowski's almost out the door, and the top candidate to replace him at the moment was a former lobbyist for both the cable and wireless industries.

60 comments .. click to read

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West Tenness

2 recommendations

How do you create more competition?

Seriously everyone says "more competition" no one explains what that even means. You're not getting another cable company to more into your town. You're not getting another telco moving into town. So seriously where is this "competition" coming from?

Ai Otsukaholic
·Clear Wireless
·Cox HSI
·Verizon FiOS

2 recommendations


Too bad the Senator isn't so concerned with soaring taxes, food and energy costs...the real cost drivers for families. Nope; keep diverting 1/2 the corn crop to ethanol while flooding them with subsidies, keep restricting new energy exploration so we have summer like gas prices in Winter and keep raising taxes...but get us back that $5 that DSL went up.

It is no wonder that Congress is so universally hated, there is no bigger enemy of the people.