Federal Communications Commission Chairman Tom Wheeler said today what many consumers already know -- the market for broadband isn't competitive.
“The underpinning of broadband policy today is that competition is the most effective tool for driving innovation, investment, and consumer and economic benefits,” Wheeler said in a speech delivered at the Washington, D.C. startup incubator 1776. “Unfortunately, the reality we face today is that as bandwidth increases, competitive choice decreases.”
He went on to say that while 80% of Americans have access to broadband service of at least 25 Mbps (which he says is “fast becoming 'table stakes' in 21st-century communications), most of those people have no choice about the provider.
What's more, Wheeler said, most Americans only have a choice of two providers that can offer service from 4-10 Mbps -- speeds that he calls the “low end” of throughput.
Even calling that situation a “duopoly” makes it sound more competitive than is the case, he said. “Once consumers choose a broadband provider, they face high switching costs that include early-termination fees, and equipment rental fees. And, if those disincentives to competition weren’t enough, the media is full of stories of consumers’ struggles to get ISPs to allow them to drop service,” he said.
But for all his criticism, Wheeler didn't offer much in the way of details about what the FCC will do to address the situation. He said the agency will “work to create” competition where it's not available, but didn't outline any specifics -- except to say that the agency is looking “closely” at whether to nix state laws that limit municipalities from building their own networks.
Still, even though Wheeler didn't put forward concrete proposals, at least one advocacy group praised the speech. “People say the first step to recovery is admitting you have a problem,” Public Knowledge Senior Vice President Harold Feld said in a statement. “We loudly applaud Chairman Wheeler for defying an army of broadband industry lobbyists to speak the truth about our slow and uncompetitive broadband market.”