Two charts that show how crappy U.S. broadband is

21 Comments

Despite the deployments of a few gigabit networks by Google(s goog) and the spread of faster cable technology, U.S. broadband is falling behind. It’s expensive both as a monthly bill and on a per-megabit basis when compared to the rest of the world. For example, at $89 per month on average, U.S. residents pay more for broadband than residents in 57 other countries including Canada, Bulgaria, Colombia and the U.K. That’s right, the U.S. ranks 58 out of 90 countries.

longchart

The research, from research firm Point Topic concludes that the higher broadband prices are “caused by lower investment in infrastructure as well as lower take-up which prevents them from benefiting from economies of scale.” To get the above data the firm compared the prices paid for residential broadband and includes standalone and bundled services offered over DSL, fiber and cable broadband in the fourth quarter of 2013.

Thus, those higher prices are also caused by a tendency is the U.S. to bundle our broadband with voice and television service, which undoubtedly leads to higher prices (although I pay $70 a month for just cable broadband). However, in many areas it’s hard or impossible to buy standalone broadband. Sometimes, when you do, you pay a higher rate!

North America (the U.S. is the largest broadband market in North America) also fails to wow in a chart measuring the cost of broadband relative to its speed for a variety of regions. Instead, North America is both more expensive and relatively slow compared to Eastern Europe, Western Europe and Asia Pacific.

res cost premeg

However, the U.S. shouldn’t give up hope. In some ways it has an advantage when it comes to the cost of the actual access technology. The Point Topic data showed that DSL is the most expensive access technology by more than seven times when compared with fiber and cable broadband. The research team counts any fiber to the node technologies such as AT&T’s(s t) U-verse deployment as fiber. And outside of rural areas, the U.S. broadband buying public has shifted to mostly cable or what Point Topic counts as fiber services. So maybe we’ll see costs drop or speeds grow.

A final takeaway for those not feeling lousy enough about broadband in the U.S.: During the last three months of 2013, the average monthly charge for residential broadband services was $76.25 (I’m average!) and the average bandwidth provided by residential services was 51.9 Mbps (I’m below average). Here’s to hoping this improves in 2014.

21 Comments

Rick

So much for the power of capitalist to provide low prices. It’s pretty sad when a country like China can have companies that provide a year of fast broadband for about $150. I’ve lived and worked there and I had China Telecom ADSL. I was a bit shocked to find that it was about the same speed as my Verizon FiOS fiber broadband, at home. (Verizon charges me about $55 a month, just for their middlin’ speed service.)

kevin

This is good information and underscores despite all the talk of IoT – internet of things and the reliance of things being introduced which rely on access to wifi and such that greed takes over and many roadblocks are put in place to gouge for what should simply be there as a utility like water, gas and electricity – available at a reasonable cost. When I was in Asia the wifi in hotels was extremely fast and free. In Europe it depends – some areas like Germany gouge and others like Ireland were free. In the US hotels and convention centers (especially the “full service= full gouge” hotels charge while if you pay less you get free fast internet. since you need wifi to do business and enable the IoT etc… it needs to be low cost or free and always on without speed bumps and hassles. but baggage fees should not exist either and look at that!!

Packet Guy

In other news, pizza costs double in the US compared to the price diners pay in Belarus, according to clueless liberals who don’t understand free markets. And average homes in Aspen, CO are unfairly priced versus proletariat hovels in Beijing.

Location, location, location.

Richard Bennett

The cost of providing broadband depends mainly on the number of miles per connection the network needs to cover. Density drives costs for cable, switches, and repair. Additional operating costs come from labor and investment. The US is responsible for 25% of the world’s global broadband investment.

Given that there’s a relationship between cost & price, the data aren’t surprising; but Point Topic’s analysis is incredibly weak.

Matt Norris

I will say this flatly:

The U.S. telecommunications infrastructure, within a decade of the conclusion of World War II, was not intended for use at the residential level beyond telephone calls over a switched central office system with “fiber backhaul” moving long distance calls over…well…long distance.

It appears that, around the early 1990’s (or maybe the late 1970’s or early 1980’s, if you want to read about related industries like the software industry or Bell Labs after the AT&T divestiture), somebody got really upset with the fact that the parts that weren’t used at the residential level but were all over the nation (mainly, the Bell System’s Long Lines infrastructure that ran on microwave towers, satellite, and coax cable) were instead being used for Cold War purposes that involve levels of lying, snooping, and deception that are equivalent to what you hear today about the NSA and unlike the present incident never made it to the public eye.

Allied signals intelligence activity (the monitoring of electronic activity associated with wireless communications or radar) was a program that continued upon the conclusion of the Cold War and presently has almost its entire story still classified even as far back as the 1950’s.

To be blunt, the price of U.S. broadband is largely related to the fact that the U.S. is one of several nations in a giant “beta test” for open communications. Part of that involves a 100% redesign of everything from the physical infrastructure to the software and the devices that run the software. It’s expensive. It’s REALLY expensive. If you want to disseminate a very public figure about the cost, read up on the amount of money Verizon and AT&T spent on LTE infrastructure, per their press releases, starting in year 2008 or 2009 or 2010. It approaches a trillion dollars.

Your tax dollars are at work, or rather your untaxed dollars, and part of the reason you don’t see a lot of government fooling around in the matter is because the U.S. government fooling around with communications is 100% unpopular in the world eye since the problems with doing that finally started to surface in the 1960’s.

Conversely, you could make the argument that it’s kept corporatized because it gives the government a front to manipulate things without being “hands on” about it.

Or, you might want to consider this:

It is fact that the government is becoming less proficient at lying. To an extent, based on Edward Snowden’s education credentials, it almost looks like that incident was intentionally staged to undermine the NSA. The NSA has existed since the 1950’s, and individuals like Bill Clinton and Barack Obama (if you want to believe what they say, which I refuse to do 100%) would take serious issue with the activities of that branch of the government.

I will lastly tell you this: The theoretical maximum speed of an LTE connection is 1gb/s. While I doubt we will see that, it is also the case that LTE technology (and other wireless technology) gives one of the best possibilities of extending broadband into rural areas. The towers have fiber running up to them, and the signal can be extended via “repeaters” similar to the way amateur radio operators use repeaters to communicate over long distances.

You are paying for the Internet, right now, like PC gamers pay for their hardware at 3 and 4 and 5 times the price it will be when it lands in video game consoles a few years later. Welcome to progress. Yes, it mixed with some corporate “greed”. Laughably, it’s hard to argue that corporations in the industry should be taxed very heavily (Google has had a few very public incidents about the amount of taxes they pay), because such corporations already pay for the existing and new infrastructure via “taxing” you with your subscription fees.

Again, you may also note that some municipalities are now offering fiber or some other service through local government. That, for a fact, may be another tell about a coming change in this stuff. The service that I have read about in those cases is comparatively inexpensive to purchasing from a private company, at the subscriber level.

I haven’t got a clue how much it costs the municipality who offers it, when they pay a private company to install and maintain it, or else pay a company at a higher tier on the backbone for a particular amount of leased data usage or bandwidth each month.

Realistically, whatever they are paying is funded with tax dollars, and that works fine in a case where the community has a high level of tax revenue. In a small rural town in a place like southwest Kansas, it may not work so great…unless there’s LTE…

Dave Thomas

Why would capable of rational though compare the United States to Denmark? The geographic area covered and population densities are beyond apples and oranges. Try comparing a spec of sand to Jupiter as a more accurate depiction.
If Stacey has a point to make she should compare Denmark to the LA/Metro Area.

jfleni

Just as states cannot prohibit localities investing in electric power networks (Interstate commerce regs since about 1934), Federal law should prohibit all states from banning localities to invest in communication services.

The Internet then will change from a machine for corrupting state politicians to a source of revnue for localities to make decisions their people (not the cable-crats and telephone-crats) want!

JesseGarboden

Reblogged this on JesseGarboden and commented:
If you want better Internet service move out of the United States. The rich don’t care if they herd most people as long as they get there millions in dividends from the major Telcos.

Beni

We need someone to take the T-Mobile approach to broadband pricing; just turn the market on its head with new prices, better systems, and higher speeds.

Tom Schutte

@Beni I think that’s what Google fiber is all about. They just aren’t deploying it fast enough

MD

Sending these data around to a few folks yesterday when trying to explain what the “Dirt Road” means in light of the FCC vs Verizon ruling. Standard response was “wow”. Spot the US ISPs with interconnect policies that promote high quality Internet reachability and those that, well, don’t.

http://goo.gl/UHVnlw

MD

I should explain the data a little more… these data are download speed measurements based on the same server infrastructure the FCC uses for other monitoring projects like Measuring Broadband America (http://www.measuringbroadbandamerica.com/). The data shows actual download throughput rather than advertised service speed.

P.S “RoadRunner” is Time Warner Cable

Sam

58th out of 90? That sounds about right. I do a lot of international travel and I not only is U.S. broadband more expensive, but its also nothing special, in terms of performance.

Even in China, where they have a national firewall (which is easily gotten around with a cheap VPN service), a year of China Telecom ADSL costs only $155…for a whole year! (No, its not subsidized by anyone….that’s the market price.) Even more shocking, it performs better than my Verizon FiOS service back home, which costs $55, per month. That’s pretty sad. As a result, I see more smartphones and mobile devices on the streets of Beijing, than I do in most American cities.

Mike Baca

I’d be interested to see how the US compares to these countries in terms of wages and cost of living. That would give us a better picture of how US Broadband compares to other countries.

Atheist0579

This is entirely by design. The profits are maximized and the overhead is minimized. Nothing to see here… move along.

keninca

Just think how much worse it will be if the government doesn’t enforce net neutrality. Service will get worse and prices will get higher.

Artur Minkin

Today on Diane Rehm show Jeffrey Eisenach from AEI was trying to argue quite the opposite! He wanted folks that don’t have a broadband in their area to check out the satellite ISP for $70/mn to claim that everybody has in fact access to broadband.

e

Satellite Internet should be 50MBPS Minimum all over the US. Satellite based.
Cable & DSL should should be 500MBPS Min
Wireless – LTE 4G 300 – 500 MBPS Min
we have the technology to do it.

Stinky Wizzleteats

Too bad telecomms don’t want to take their profits and re-invest in their infrastructure but would rather give the money to the “C” titles and stockholders. The consumer has to sit and take it and they know it.

Comments are closed.