Americans pay more for slower broadband


Americans are still paying more and getting less when it comes to broadband. The New America Foundation’s Open Technology Institute released new data on broadband prices around the world showing that Americans in major cities such as New York, Los Angeles, and Washington DC continue to pay higher prices for slower Internet service when compared to similar cities in other parts of the world.

The data ranks home and mobile broadband offerings in 24 cities around the world by price, download and upload speeds, and other variables. The rankings indicate a clear trend: even when comparing cities of relatively similar size and population density, the United States continues to fall behind cities in other nations. The Open Technology Institute first started doing this study last year. In its updated release, authors show that while speeds are getting marginally faster, costs aren’t going down and overall speed still lacks that of international markets.

n the U.S. the best deal for 150 Mbps home broadband from cable and phone companies is $130/month, offered by Verizon Fios in New York. In contrast, internationally, the cities we surveyed offer comparable speeds for $77 or less per month, with most around coming in at $50/month. When it comes to mobile broadband, the cheapest price for around 2GB of data in the US ($30 from T-Mobile) is twice as much as what users in London pay ($15 from T-Mobile).

Report data shows that the high level of consolidation among telecommunications service providers accounts for the increased cost and lower speed. This correlation may also account for why these same providers are working to keep municipal broadband from expanding.

Cities that are exemptions to the trend, highlight areas with strong municipal backing for their broadband networks. Community-owned networks U.S. cities such as Chattanooga, Tennessee and Lafayette, Louisiana are offering some of the fastest speeds for reasonable prices. In these cities, speeds are significantly higher, costs are lower, and consumers have more choices. Worldwide, Chattanooga and Hong Kong lead in speed and affordability.

Report data also shows that prices continue to drop internationally, while the best US consumers can hope for is a flat trend. Data caps are also more common in the US. In July 2013 Verizon announced a new 500 Mbps service (with 100 Mbps upload speeds) available in selected areas of its FiOS service. However, this new 500 Mbps service costs around $300 a month. In Amsterdam, a symmetrical 500 Mbps broadband plan (with 500 Mbps download and upload speeds) costs just over $86, according to report authors.

Cities that are seeing new services are seeing them come from third party providers like Google Fiber, as Verizon FIOS has halted expansion. Municipal broadband pricing starts lower and generally stays flat, although Chattanooga did announce plans to dramatically lower monthly subscription fees. As it stands, that municipal broadband network now offers some of the highest speeds in the world at a notably lower cost than those of us on traditional networks in the US.

New America plans to release policy prescriptions based on the report data in November.