by Bill Snyder

U.S. Lags in Broadband Speed Due to Serious Lack of Competition

Oct 01, 20143 mins
Consumer ElectronicsInternet Service Providers

The United States lags behind 24 other countries in average broadband speed, according to new research. The reason? A serious lack of competition among U.S. broadband providers.

If you live in Singapore, you can enjoy a 1 Gbps broadband connection for just $40 a month. For the same money in the United States you’d be lucky to get 10 Mbps. Why the difference? Competition. They have it; we don’t. Telecom giants including Comcast, Verizon and AT&T want to keep it that way.

In many U.S. markets there are only one or two major broadband providers. Contrast that with Singapore, a city-state with a population of about 5.4 million. Three competing companies in Singapore have launched a price war on gigabit fiber home Internet access — and their plans don’t have data caps.

It is not only Singapore that puts U.S. broadband providers to shame. At 29 Mbps as measured by Ookla, the United States is twenty-fifth in a global ranking of average Internet download speeds, behind such countries as Moldova, Latvia and Estonia, and more than three times slower than global leader Hong Kong. (The U.S. speed is an average value, so it’s likely that many consumers have much slower connections.)

The United States did not fare well in the U.N. Broadband Commission’s annual report, either. The United States trails Europe and Asia by various measures of affordability, speed and subscription rates, at a time when high-speed connectivity is increasingly important to modern economies. For example, the United States fell from twentieth to twenty-fourth place in wired broadband subscriptions per capita, behind virtually every country in Western Europe, according to the report.

Yet, the nation’s biggest broadband providers, including AT&T and Comcast say we don’t have a problem. When FCC chairman Tom Wheeler said earlier this month that “a 25 Mbps connection is fast becoming ‘table stakes’ in 21st century communications,” AT&T replied with a filing that argued 4 Mbps is plenty fast enough.

From that filing:

“Consumer behavior strongly reinforces the conclusion that a 10 Mbps service exceeds what many Americans need today to enable basic, high-quality transmissions.”

Verizon executives have made similar statements.

Seriously?  Four Mbps? That’s not even enough to smoothly stream a video. Forget anything that requires much more bandwidth, such as imaging applications.

Comcast, which is one of the nation’s largest broadband providers, as well as a cable company, has been on the offensive recently, saying that opponents of its controversial merger with Time Warner Cable are “extortionists.” If the merger is approved by regulators, the number one and number two cable providers will merge and gain immense power to set rates and decide which content you can watch on TV or on the Internet.

The reports by Ookla and the U.N. make it clear that the problem U.S. consumers face is a shortage of competition. Google and publicly owned broadband deployments in some states are beginning to fill that void, but it will be quite a while until we catch up to the tiny Asian nation of Singapore.