What’s wrong with US broadband?

Broadband in the US is in bad shape. We already know that large parts of the country don’t have access to broadband speeds – but even where they do, those connections are often plagued by limited options, predatory billing practices and a general lack of choice. And because of the dismal state of federal data collection, it’s hard to gauge the full extent of the problem.

So last year we took matters into our own hands. In partnership with Consumer Reports, we asked readers to share their internet accounts with us, and more than 22,000 of you did. The Consumer Reports data team spent more than a year reviewing this data, and together we’ve put together a picture of how much people in the US are paying for internet access.

To be clear, this is not a standard statistical survey. The 22,000 notes we received are specific to our readers, so they are not predictive or representative of the national broadband market. However, it is one of the most ambitious efforts of its kind to understand and provide a unique look at what broadband access in America really looks like.

Consumer Reports has a more detailed and methodical write-up of the data we find and how we analyze it. But for our part, we try to get a bird’s eye view of what we’re learning and what people are saying about their experiences with the companies they pay monthly for.

That, in a nutshell, is the problem with broadband in America.

a:hover]:shadow-highlight-franklin [&>a]:shadow-underline-black dark:[&>a:hover]:shadow-highlight-franklin dark:[&>a]:shadow-underline-white md:text-40 lg:-ml-100″>This is expensive

This is the most basic fact about all of this, something you almost certainly notice if you take out an internet account. On average, people in our sample pay about $75 a month for Internet access—a bit higher than previous estimates, but certainly not unheard of. There are a few people who pay $150 or more, but they are pretty clearly outliers.

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To most Americans, this probably sounds normal – but it shouldn’t. For starters, it’s more than people pay in other countries. Our survey only looked at US customers, but there are plenty of other surveys that can give you a sense of the international landscape. A 2020 survey by the Open Technology Institute found that prices in Europe have been falling steadily, falling to $31 in Paris and $40 in London.

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The price difference isn’t all bad. Countries with lower prices often have slower connections, so if you look at the price per megabit, the picture improves a bit – not enough to completely close the gap. There are plenty of intangibles that could fill the rest of the void, whether it’s less downtime or more consistent velocity.

But the simple fact is that we are paying more, which raises the difficult question of whether we are getting our money’s worth.

a:hover]:shadow-highlight-franklin [&>a]:shadow-underline-black dark:[&>a:hover]:shadow-highlight-franklin dark:[&>a]:shadow-underline-white md:text-40 lg:-ml-100″>Most people don’t get to choose their carrier

It’s an iron law of internet access: if you don’t like your carrier, you’re probably stuck with them — and when they know you’re stuck, you’ll pay more.

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These two claims may seem obvious, but proving them is harder than you might think. The FCC maintains a comprehensive map of US telecom coverage, but these maps are based on self-reported ISP data, meaning they tend to paint an optimistic picture of what actually exists. Simply put, telcos will claim to cover large areas where they never had a line.

Our data provide insight into the broader problem, but we must be upfront about the shortcomings. Even with 20,000 bills, we’re limited to just over 40,000 zip codes in the US, so anyone that appears as the only bill in a zip code is automatically lumped into the “1” column. Even if a zip code has more than one bill, it’s unlikely we’ve clocked every carrier in the region. In short, we don’t know how many options most of these people have; we can only make guesses based on the data.

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Having said that, there is ample evidence that lack of choice is a problem. A 2020 study from ILSR found that 83.3 million Americans have only one broadband option, despite increasingly slower DSL lines being offered as alternatives. We know it hurts consumers; the question is how much.

This is where the information gathered really starts to come in handy. Even with our limited data, we can see a pretty clear trend for zip codes with more than one bill in the database: the more options you have, the cheaper the service. So it’s not a huge difference—the split between having a sole provider and three or more adds up to a few dollars on average—but it’s a reminder of how grim the outlook can be without meaningful competition.

a:hover]:shadow-highlight-franklin [&>a]:shadow-underline-black dark:[&>a:hover]:shadow-highlight-franklin dark:[&>a]:shadow-underline-white md:text-40 lg:-ml-100″>They add false charges

This is perhaps the most annoying part. Even when prices are both high and unavoidable, they still find a way to add a little extra on top.

The fees represented by the dark green bars are the main offenders here, and you’ll probably find a few on your internet bill labeled as “internet infrastructure fee” or “network expansion fee” or a myriad of data cap charges. some ISPs charge expensive “data cap” fees to avoid data caps or caps. To keep our charts neat, we call them all by the same name (“company-imposed fees”) because they’re all basically fixed. There is only a minimal cost associated with providing DNS or IP services, and this minimal cost has nothing to do with the fee they charge you. Even if there is, there’s no reason why these costs can’t be factored into the total price of the service, just like any other business. That’s bullshit—the telecom equivalent of selling you a $5 sandwich and then adding a 50-cent “mustard fee.”

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Equipment fees are a bit more legitimate. They usually tell you that your ISP is leasing you a router, and you can get out of it by buying your own (which will probably be cheaper and less hassle in the long run). Most people don’t, but at least it’s possible.

Still, the variety of fees is somewhat embarrassing. This is part of a wider strategy aimed at inflating prices and confusing customers. Some providers are worse than others (congratulations to Sonic and TDS for being the worst of the bunch), but everyone does at least some of it. With no clear incentives for good behavior, it seems unlikely that we will see any of these fees drop in the future.

a:hover]:shadow-highlight-franklin [&>a]:shadow-underline-black dark:[&>a:hover]:shadow-highlight-franklin dark:[&>a]:shadow-underline-white md:text-40 lg:-ml-100″>There is no escaping fiber

We’re a tech blog, so it’s always tempting to think that some new technology will save us from this kind of problem. In the case of Internet access, that technology is satellite Internet. The economics of laying fiber encourages this kind of rent-seeking, so maybe avoiding fiber will allow us to build a better telco?

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Someday, maybe – but we’re not there yet. Verge editor-in-chief Nilay Patel delved into issues with Starlink last year (which, to be generous, is still very much in beta), but it’s not limited to any one service. Providers like HughesNet, Dish, and Viasat have been providing satellite connectivity for decades, and while newer generations have gotten better, the underlying problems haven’t changed. Providing reliable service via satellite is difficult; requires a lot of equipment and is not much cheaper than relying on terrestrial fiber. Unless you’re far enough away that satellite is your only option, it generally doesn’t make sense.

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The data we collected confirms this. For starters, only a small fraction of bill senders used satellite service: just 274 out of a total of more than 18,000 bills. For those using satellite, the prices weren’t that different from the average wired connection – and that’s before factoring in the quality of the connection. That’s not to say the satellite revolution won’t improve things; it just means it’s not here yet.

In the meantime, we must make the best of what we have.

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