Study: Broadband Still Slower, More Expensive In U.S. Than In Europe, Asia


American consumers have gotten a mixed bag of broadband news this year. Between mergers and net neutrality it’s been a rough twelve months, even while some consumers have seen better connections and dropping prices. But the news for most of us is the same as ever: on the whole, Americans pay more, for worse broadband service, than our peers in the rest of the world.

The Open Technology Institute at the New America Foundation conducts a study every year comparing broadband speeds and prices nation- and world-wide. This year’s, which they released this week, is the third annual study.

Last year’s report found that Americans were paying more for broadband access than our counterparts abroad, and getting worse service for it.

This year’s data paint a similar picture. Overall, our national average broadband speeds are still lower, and our prices higher, than what customers in similarly-sized cities in Europe and Asia get.

That’s not to say that all consumers in the U.S. are chugging along with terrible connections, though. In fact, the seven top-ranking cities, all tied at first place with symmetrical gigabit connections, include three cities in Asia and four in the U.S. Seoul, Hong Kong, and Tokyo are tied for first place along with Chattanooga, TN; Kansas City, KS; Kansas City, MO; and Lafayette, LA.

If that list of cities sounds familiar, it’s because Chattanooga is the country’s go-to example of just how great municipal broadband can be, and the Kansas City area is where Google Fiber first launched. Lafayette also has a well-regarded public fiber utility.

But in larger cities, where only big incumbent ISPs like Comcast, Verizon, and Time Warner Cable operate, the picture is more dire. Los Angeles, New York, and Washington, DC all tie for 12th place on the list, with fiber connections of 500 Mbps. San Francisco, America’s high-tech hotbed, comes in near the bottom of the list with top speeds of 200 Mbps, just 20% of what consumers in Chattanooga can get.

American users aren’t just seeing slower service, though; even though prices have dropped since last year, we’re still paying significantly more for every gigabyte we get. Gigabit service in Chattanooga and Kansas City runs $70 per month, and in Lafayette it’s about $110. As compared to last year’s $1000 monthly fee, that’s great. But customers in Seoul, Hong Kong, and Tokyo — all cities with a high cost of living — are all paying between $30 and $40 USD for their connections.

Meanwhile, those 500 Mbps connections in New York and L.A. — literally half as fast — will run a subscriber a whopping $300 per month. American consumers are also paying more in other ways, for example, with high monthly modem rental fees.

So what’s keeping American broadband down? There seem to be two key factors: one, broadband is a government-sponsored or -subsidized utility in many other parts of the world.

Public or public/private partnerships for broadband are often very successful in the United States, as Lafayette, Chattanooga, and Kansas City show. But they’re very, very hard to get started. Not only do new ventures face logistical and financial hurdles, but also legal ones. Incumbent ISPs, especially AT&T, have successfully sponsored or lobbied for state level laws that prohibit the construction or expansion of municipal broadband projects.

The other major factor is related, and it’s competition. Or, more specifically, the complete lack of it. In most U.S. cities, customers seeking high-speed internet don’t really have a choice of what provider to go with. For connections faster than 25 Mbps, over 80% of us can go with, at most, one provider.

Big telecom companies are nominally expanding their gigabit fiber networks, but they aren’t there yet and it will be a long, slow slog before they are. And without competition, they aren’t really motivated to. Incumbent ISPs are more likely to pretend everything is great and rigging the rules in their favor than they are actually to spend the time and money it takes to make wide-scale change.

OTI has made their full data set available to anyone who wishes to dig around in it.