February 21, 2024


Consider It Solved

Yet Another Study Shows U.S. Broadband Users Are Being Ripped Off By Local Monopolies

2 min read

from the do-not-pass-go,-do-not-collect-$200 dept

For decades, we’ve discussed how U.S. broadband is generally spotty, expensive, and slower than many countries due to regional monopolization. And, for just as long, we’ve highlighted how U.S. policymakers in both parties comically go out of their way to not even acknowledge that monopolies are a problem, often instead employing vague, causation-free rhetoric about a mysterious digital divide.

Enter a new study by Consumer Reports that analyzed the broadband bills of more than 22,000 Americans from more than 50 states. Unsurprisingly, the study found that Americans routinely pay significantly more for broadband than their European counterparts, get slower speeds, and are routinely nickled-and-dimed through a variety of sleazy, below-the-line surcharges:

More than a dozen ISPs were found to charge company-imposed fees—also known as junk fees—under names such as “network enhancement fee,” “internet infrastructure fee,” “deregulated administration fee,” and “technology service fee.” They can surprise consumers when they appear on monthly bills, and can enable providers to raise prices without seeming to violate marketing or contractual price commitments.

This is what you get when you have neither healthy market competition nor competent regulatory oversight. Instead, we have generally embraced regulatory capture disguised as a “free market conservative” policy approach. This generally involves the federal government turning a blind eye as regional monopolies mindlessly consolidate, crush all competition in their wake, then abuse this vacuum to rip off captive customers with a rotating array of spurious surcharges.

Here’s a fun game you can play at home: try to find one instance of an FCC Commissioner from either party clearly criticizing the regional monopolies directly responsible for substandard broadband at absolutely any point in the last six years.

You won’t find it. What you’ll find instead is a bunch of overly cautious, causation-free rhetoric about how we really should fix the “digital divide” or “homework gap.” And a bunch of policies where the primary approach involves throwing millions in additional subsidies at the same regional monopolies that have spent the last 35 years demolishing any competitive new upstart that enters the telecom sector.

In response, the U.S. press has also generally adopted telecom policy rhetoric that acts as if the digital divide just mysteriously dropped out of the sky one day, and isn’t the direct and obvious result of unchecked regional monopolies, regulatory capture, and the widespread state and federal corruption that protects it all.

The solution to the problem exists. It’s highly localized, open access fiber networks built by municipalities, cooperatives, smaller local companies, and regional utilities (see our recent report on this very subject). Not only do our policymakers not acknowledge that this is the path forward, they very often can’t even acknowledge that telecom monopolies exist, making it kind of hard to fix the problem.

Filed Under: broadband, competition, corruption, digital divide, fcc, high speed internet, monopoly, prices, regulatory capture, telecom

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