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The more Internet speed, the fewer choices among ISPs

17 Dec, 2014

Most Americans have a choice among Internet service providers (ISPs). But according to a new report from the Economics and Statistics Administration of the Commerce Department, that choice is becoming less effective and less meaningful.

The report, Competition Among U.S. Broadband Service Providers, looks at ISP competition pegged to download speeds. The findings: the slower the Internet service, the greater chance of competition. And, that means as more and more people use the Internet for high-bandwidth downloading (like video) there is less competition – and higher prices – at the upper end.

At medium speeds, “the typical person is able to choose among two fixed ISPs. They also have the option of subscribing to any of three mobile ISPs at 10 Mbps.”

However, “At speeds greater than10 Mbps, the number of providers decreases further. For example, only 37 percent of the population had a choice of two or more fixed-service providers at speeds of 25 Mbps or greater; only 9 percent had three or more choices.”

The Commerce Department found that only two-thirds of Americans can access 100 Mbps broadband at any price. And it was here that competition was most lacking. As the news release said:

“Of those with access to fixed broadband service at this speed, only 8 percent of the population had access to two or more providers, and 1 percent had access to three or more. Only 3 percent of the population had 1 Gbps or greater available, and none had two or more ISPs at that speed.”

And the American consumer pays a premium. Said the report’s executive summary:

“All else equal, having fewer competitors at a given speed is likely to drive up prices. As a result, some consumers will decide not to adopt Internet access at all, some will choose a slower speed that otherwise, and some will economize in other ways.”

And remember, to determine just what speed your ISP is providing, go to the Speed Matters Speed Test.

New Commerce Department Report Examines Competition Among U.S. Broadband Service Providers (U.S. Commerce Dept. news release, Dec. 17, 2014)

Competition Among U.S. Broadband Service Providers
(U.S. Commerce Dept. report, Dec. 2014)

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