Today the Fiber Broadband Association filed comments at the Federal Communications Commission (FCC) in the Restoring Internet Freedom Proceeding. In our filing, we urged the FCC to restore economic rationality to how it oversees the regulation of broadband access. Arguing against previous FCC findings that Internet Service Providers (ISPs) hold a terminating monopoly, the Association reviewed pricing and availability of ISP services. A monopoly indicator of market power would be increasing prices are and/or decreasing supply or quality. In order to test whether these indicators exist, the Association undertook an analysis of broadband pricing and supply or quality over the past six years (2011-2017) based on two sources: the U.S. Bureau of Labor Statistics (“BLS”), and standalone pricing data (standard and promotional) collected by SNL Kagan and other third parties from 20 providers offering service in approximately 40 metropolitan statistical areas.
Our analysis found:
· Prices for broadband Internet access service from 2011-2017 lagged inflation. The BLS
Internet services consumer price index grew by 1.4 percent during this period versus 8.7
percent for all items; and
· Based on SNL Kagan and other third-party data, from 2011-2017, prices for broadband
Internet access service declined in every speed tier, from a reduction of 14 percent for
lower speed services (below 10 Mbps) to a reduction of 57 percent for higher speed
services (between 100 Mbps and 1 Gbps).
· Prices for broadband Internet access service in rural areas experienced similar declines,
based on a sampling of four major ISPs (Comcast, Cox, AT&T, and Charter (Time
Warner)) across a variety of markets and Suddenlink in select markets.
· In addition to these favorable pricing trends, ISPs have greatly expanded their higher speed offerings. In 2011, 75 percent of offerings were below 25 Mbps; today, nearly 80
percent are above 25 Mbps.
· Finally, U.S. penetration and adoption of higher-speed services compares favorably with
developed countries, especially when normalized for population density.
In sum, these declining prices and increasing supply for broadband Internet access
service are the hallmarks of a functioning market, where government intervention is not
warranted. In such an environment, the Commission should do no harm by intervening on the premise it can improve the market. Rather, it should seek to further expand supply by removing barriers to investment, in particular unnecessary regulatory barriers such as those imposed by Title II, and otherwise encouraging entry.
About the Fiber Broadband Association
The Fiber Broadband Association—formerly the Fiber to the Home Council Americas—is the largest and only trade association in the Americas dedicated to the pursuit of all fiber optic network infrastructure to the home, to the business, and to everywhere. The Fiber Broadband Association helps providers make informed decisions about how, where, and why to build better broadband networks with fiber optics, while counting on its members to lead the organization forward, collaborate with industry allies, and propel fiber optic deployment forward. Since 2001, these companies, organizations, and people have worked with our communities and consumers in mind to build a better broadband future here and around the world. Learn more at fiberbroadband.org.