As Broadband Speeds Increase, Americans Have Fewer Options

The state of competition in the U.S. broadband market is a mixed bag. Although a bounteous number of ISPs offer basic broadband, Americans who hunger for the fastest Internet speeds aren’t likely to have many options, according to a U.S. Commerce Department report released this month.

A whopping 98 percent of the U.S. population can pick from at least two mobile ISPs that offer download speeds of at least 3 megabits per second (3 Mbps), and 88 percent of Americans can access the same speed from two or more fixed ISPs, the Commerce Department noted in a press release.

But as Internet speeds increase, the number of options for consumers shrinks. For instance, at speeds of 25 Mbps or greater, 86 percent of the population had access to a fixed provider but just 37 percent of individuals can select from two or more fixed service providers, according to the report, “Competition Among U.S. Broadband Service Providers.”

“Mobile service is virtually nonexistent at download speeds of 25 Mbps or greater,” the Commerce Department added.

The report also revealed that four out of 10 Americans did not reside in areas where broadband service of 100 Mbps or greater is available. 

For the millions of Americans who stream movies, confer with colleagues and customers through video conferencing, and conduct other bandwidth-hogging activities, speed matters. Consider, for example, the download of a 6 gigabyte movie. The Commerce Department noted a 25 Mbps Internet service would download the movie in just 16 minutes, while a customer with basic broadband (3 Mbps) would have to wait 2 hours, 15 minutes to do so.

“All else being equal, having fewer competitors at a given speed is likely to drive up prices,” wrote Sue Helper, chief economist for the Commerce Department, in a blog, commenting on the broadband findings. “As a result, some consumers will decide not to adopt Internet at all, some will choose a slower speed and some will economize in other ways.

The report examined Internet service that was available to homes in December 2013 and reflects data from the Census Bureau and the National Telecommunications and Information Administration.


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