back to article FCC boss Wheeler: Lack of broadband choice is screwing Americans

US Federal Communications Commission chairman Tom Wheeler has issued his most damning indictment of America's broadband infrastructure to date – claiming more than half of citizens have only one ISP in their area offering 25Mbps or faster connections, and that competition has been crippled by a telecoms duopoly. "The simple …

  1. BryceP

    Saturation

    Utilizing the full capability of a 25 megabit line would see you reach a standard 250 gigabyte cap in slightly over 22 hours.

    Choice is an illusion if every one is equally crippled.

    1. DougS Silver badge

      Re: Saturation

      How is it being "crippled" if you can't use something flat out 24x7? I'm pretty sure that the city would have a talk with you if you tried to open all the taps in your house 24x7, ditto the electric company if you maxed out your electric round the clock. And those are pay for what you use, rather than a flat fee.

      The idea that unlimited use of high speed broadband costs the provider nothing is moronic. We may not like the idea of caps, but a 250GB cap is not "crippled". Would you rather have a 250GB cap and 25 Mb service, or no cap and a 2.5 Mb service? You could download more in a month under the latter scheme, but I think not one Reg reader would choose that option.

      1. BryceP

        Re: Saturation

        I dislike analogies when discussing ISPs/the internet in general; at best they are inaccurate, at worst dishonest. Why be either when you can simply expand upon the actual idea in no uncertain terms?

        Broadband offerings are crippled because they sell you a variety of products that can use up its full monthly allotment in a fraction of the time. Even a 7 megabit pipe would meet cap in ~80 hours which, at the average American television consumption of five hours a day, would equate to around a half a month operating past cap.

        The cap is the real limitation, not the pipe - for instance, most high definition tv-capable pipes can easily support 25Mbps for dual-HD DVR tuning/recording, priced based on package, regardless of if I leave it on 24/7/52. That said, if an ISP billed me based on usage instead of speed they would make far less money. Even factoring in retail infrastructure costs - let's assume $00.20/gigabyte, which is six and change times Amazon's delivery cost - the "average" (e.g., the average Comcast customer that uses "far less" than 250gb/month) user would pay far less than they do now for internet. As a heavy user I might pay more fully metered, but I'd likely pay less than I would with cap + post-cap surcharge. Even at my grossly inflated retail costs a terabyte would cost me a total of $200, versus Comcast, which would be a MINIMUM of $180 (e.g., impossibly difficult to obtain $30/month retention special + $150 in overage). Not much of a difference, and we both know that (1) retail costs are far lower than $00.20/gb and (2) bandwidth gets cheaper with volume.

        So, please, bring on metered billing. Or do you think that ISPs aren't switching because the status quo is better for customers?

        As an aside, I never once stated that it costs ISPs nothing, so please take your strawman elsewhere.

        1. DougS Silver badge

          @BryceP

          Sorry, but you can't call Amazon's charges "retail", because they are only paying their end of the delivery cost. That's easy, they have a few big datacenters where they have a few massive pipes to exchanges and large ISPs.

          It costs a cable or DSL ISP much more to deliver the same amount of bits to you, because you and all their other customers aren't nicely combined into a single place. You're spread out everywhere. The wire thus needs to be laid all over, the cost of which is amortized over many years. Then in order to get you to 25 Mb broadband, it had to be upgraded to fiber, at least to every neighborhood (FTTH like FIOS is even more expensive) and that cost has to be amortized as well.

          It is like the difference between ordering a million widgets delivered to one place, and ordering a million widgets delivered to a million separate locations.

          1. Jaybus

            Re: @DougS

            Exactly. It is vastly more expensive to pipe 10 Mbps to 100 different places than a single point-to-point 1 Gbps link. A cost per bit comparison is useless. One of the major issues with Internet service in America is that high speeds are not available in rural areas. It is a return on investment problem. A new data link in New York will be only a few tens of km long and pay for itself very quickly. The same link to a small town in the West Texas desert will be hundreds of km long and never pay for itself. That cannot be helped. What the FCC boss is talking about is the fact that once DSL speeds are exceeded, and only cable remains, many, if not most, have only a single choice in cable provider due to exclusive deals that cities have made with particular cable providers. That can be dealt with by forcing the cities to abandon the exclusivity clauses when negotiating with cable providers, thus breaking the mini-monopolies..

      2. Irony Deficient

        Re: Saturation

        DougS, the choice might depend upon the pricing — at least for one Reg reader. I have 3½ Mb/s DSL, and although my ISP reserves the right to cap, it has not yet done so on the usage at Deficient House. (Granted, the usage here doesn’t get anywhere close to 3½×24×7×52; I think that our single largest download to date has been the Mavericks installer — 5.3 GB — which was done as an overnight task.) Faster cable broadband is available here, but given its cost, we continue to choose the DSL.

      3. Purple-Stater

        Re: Saturation

        @DougS

        "How is it being "crippled" if you can't use something flat out 24x7?"

        The example given wasn't "24x7", it was 22x1! To put it in a somewhat difference perspective/example, if you ran your access full bore only one hour per day, the internet cap would be reached in only 22 days. I don't think it's unreasonable to call that crippled.

      4. noominy.noom

        Re: Saturation

        @DougS

        I'll assume you are not trolling and simply don't understand networking. Me using my bandwidth does not cost the ISP any money. It does not use any of the ISP's resources. Once the line is live there is no difference to the ISP's income or local operations whether I use the line or not. However, there is a difference in everyone's experience if too many of us use our bandwidth at once and the ISP has undersized the backend links to the rest of the world. Like airlines that sell more seats than exist on a plane, many ISPs sell more bandwidth than they can provide. ISPs have collected subsidies for years and lied to customers for years. Now that applications are getting useful and interesting and people are using them, the ISPs are getting found out.

        * Note that some local operations are shared bandwidth, similar to a hub. So the bandwidth can run out locally, not just from saturation of the back end link to the Internet. But it still does not cost the ISP any money or any other resources. The neighbors just get sucky service. The ISP should not have over promised. Now, if up front they make it known that you may get sucky service, that is okay. But putting a cap on just tries to work around the problem At the first of the month when on one is near their limit you still would get sucky service when too many people use their bandwidth at once.

        1. DougS Silver badge

          Re: Saturation

          No, it is YOU who don't understand networking. You using your bandwidth doesn't cost the ISP anything, but everyone using their bandwidth sure as heck would, because networks are designed and built oversubscribed. If you want everyone to be able to max it out all at the same time there would be major upgrades required, and someone has to pay for those. They certainly couldn't be paid for at the prices people pay for broadband today.

          I know the "I want unlimited usage" folks who keep downvoting me don't want to hear it, but that's how the real world works. That's how the telephone network was built, that's how the cellular network was built, and that's how ISPs are built. Why do you think you get brownouts on really hot days? Because the electrical grid wasn't built to deliver anywhere near the amount of power required for everyone to turn on everything they own at the same time - it can't even handle everyone having their AC on at the same time!

          If everyone tried to max out their connection 24x7 you'd be lucky to get a tenth of your rated speed, and might get less. If you want guaranteed bandwidth, i.e. 25 Mbps that is guaranteed to always deliver 25 Mbps to you and you can use it 24x7 if you want, go ask your ISP for a quote. I dare you. It will not cost $50, nowhere near that amount, that I can assure you.

    2. Anonymous Coward
      Anonymous Coward

      Caps

      You have a 250Gb cap?

      I moved 4Tb last month. The housemates view a lot of videos.

  2. ZSn
    Holmes

    Monopoly

    For the country of free enterprise it seems that the USA seems to be remarkably good at generating monopolies. Ma bell was broken up to create some sort of competition and the resultant components have spent the last thirty years trying to recreate that monopoly.

    Mind you that also may be a fact of the geographic spread of the country, in the old days pre-fibre even the line rate between exchanges (COs) was lower than in Europe because they were more spread out. This lower density (even in the east coast) lowers the returns on investment and reduces competition. Not much that can be done apart from put America in the tumble drier on hot and shrink it a bit :-).

    Mind you back in the day (1999) broadband was defined as 2mb/s, that's all I have in the sticks. Why this focus on high bit rates mystifies me. Yes 25meg is better than 2 meg, but like the joke goes, it's not the size but what you do with it...

    1. Anonymous Coward
      Anonymous Coward

      Re: Monopoly

      For the country of free enterprise it seems that the USA seems to be remarkably good at generating monopolies

      For an enterprise, becoming a monopoly is the ultimate goal. It saves a fortune in trying to keep up with competitors, you need to put less into R&D and innovation - all saving which go straight back to shareholders...

    2. Alan Brown Silver badge

      Re: Monopoly

      "Ma bell was broken up to create some sort of competition and the resultant components have spent the last thirty years trying to recreate that monopoly."

      They've suceeded for the most part - and are no longer encumbered by that pesky "universal service to all" requirement which came out of 1930s antitrust litigation.

    3. Tom 38 Silver badge

      Re: Monopoly

      Mind you back in the day (1999) broadband was defined as 2mb/s, that's all I have in the sticks. Why this focus on high bit rates mystifies me. Yes 25meg is better than 2 meg, but like the joke goes, it's not the size but what you do with it...

      "What you do with it" depends really on "What you can do with it". You can do less with dialup than you can do with a 0.5 Mbit DSL, which can do less than a 2 Mbit DSL, which can do less than a 20 Mbit DSL, which can do less than a 80 Mbit FTTC, which can do less than a synchronous Gbit FTTH.

      I've had all 6 of those connections throughout my life¹ and the utility that you can achieve from each differs - its not just "doing more at the same time", each step up enables you to do things that the previous grade does not

      0.5Mbit -> 2 Mbit enables poor quality but usable skype

      2Mbit > 20 Mbit enables HD skype

      20 Mbit -> 80 Mbit enables HD video streaming and multi-user scenarios

      80 Mbit -> 1 Gbit enables cancelling the data centre servers, running VPNs at home for travel iplayer, consumption of my home media from anywhere, HD home surveillance video - I haven't even barely touched the surface of what I can do with it yet.

      The ironic thing is that as consumers we have already paid enough to have covered this entire country in fibre from home to home, but we consider it anathema to have the state spend that money on infrastructure, and rather spaff it over a succession of large corporations who "build value" (in themselves).

      ¹ Yes, you do have to live in specific buildings in specific areas to get synchronous gigabit home broadband. It wasn't top of my list when buying a house, and they didn't even mention it until I had put the deposit down - although I knew at a minimum it would have BT FTTC²

      ² BT FTTC is a truly shocking product, 300 Mbit down, 20Mbit up. There is no technical reason like there is for FTTC for the upload speed to be asynchronous, it is only to limit you to a "consumer" connection where all you can do is consume crap like BT Vision. Any of the compelling things I outlined above, that should be possible with such a connection are made impossible so that you continue sucking the BT teats. Plus it's like £70 a month - I don't even pay that for gigabit.

      1. Eddy Ito Silver badge

        Re: Monopoly

        2Mbit > 20 Mbit enables HD skype

        I'll point out that my connection is "up to" 7Mbit but the absolute fastest I've ever seen is 3.5Mbit down and ~250kbit up and typical speeds are 2.8M/190k. There isn't HD anything going both ways. Given the city I live has a population density of only 17,000 per square mile so it isn't really big city dense and the infrastructure has only been patched, not updated, in the last 50 years so it isn't much of a surprise. I'd be quite happy with the service I had in a much more rural area (pop. density <100/sq. mi.) as it was consistently 4Mbit up/down so it was actually useful but it seems the advent of the media consumption devices has tilted the bias to down only and up only used for simple requests rather than moving real data.

  3. Anonymous Coward
    Anonymous Coward

    America Fuck Yeah!

    How long have people been screaming about this, and its only now that someone is beginning to wake-up?

    America isn't about competition, its about corporations protecting their own patches, getting cosy with regulators and arming themselves to the teeth with deadly lobbyists...

    The Municipal de-regulation option is the only thing I can see fixing this anytime soon. Every other attempt will be stalled or watered down....

    1. lambda_beta
      Linux

      Re: America Fuck Yeah!

      Unfortunately, you're so correct.

      "The third largest lobbying increase between the first and second quarter of 2014 was logged by Comcast Corp, which publicly announced plans to merge with Time Warner Cable in February. Comcast spent $4.5 million in the second quarter, a 40 percent hike from first-quarter lobbying expenditures of $3.2 million."

      So in the first two quarters of 2014, Comcast has spent almost $8 million on lobbying. When the Comcast/Charter/Time Warner/Spin-Co merger is approved by Washington, it will be largest cable/ISP company in the US, guaranteeing a virtual monopoly.

      1. Someone Else Silver badge
        Coat

        Re: America Fuck Yeah!

        So in the first two quarters of 2014, Comcast has spent almost $8 million on lobbying.

        Makes you wonder what they could have done had they put that money into product...

  4. tom dial Silver badge

    Close scrutiny is warranted of municipal governments that have sold monopolies. In the Cleveland, OH suburb where I formerly lived the beneficiary was Cox Communications, which held a cable and high speed internet monopoly until at&t began to offer it a few years ago. I gave it a 30 day trial and found it usually failed to meet, and never exceeded the 18 mbit advertised rate. I reverted to Cox and transferred the telephone service as well. Cox almost always equaled or exceeded the 20 mbit service I contracted for; the usual rate when I measured it generally was around 30 mbit. They also repaired the gratuitous damage the at&t installer did by cutting the coax, some of it my owned premises equipment, in several places. Several of my neighbors had similar experiences and switched back to Cox after an at&t trial. Competition, alone, is not necessarily enough. My current Salt Lake City suburb has only Comcast, which although a bit less reliable than I would like, consistently meets the 35 mbit contract rate. The "competitor" presently offers a choice of 1.5 or 5 mbit.

    Another factor is that it is not cheap extend service to a large area/number of potential customers, so competitors have to front a lot of money before they can begin to erode an established customer base.

    Wheeler points out a real problem, but I doubt he has the authority to cancel local monopolies or the money to replicate existing high capacity infrastructure. It is not clear that local or national government funding or operation of this type of service is a good idea given that such expenditures all too often lead to at least the appearance of impropriety.

  5. Jim O'Reilly

    Wheeler is right!

    Gigabit fibre costs $35 a month in Seoul and is readily available - because there is a fierce competition among several providers.

    It's clear that lack of competition means least cost service and high prices.

    1. Tom 38 Silver badge

      Re: Wheeler is right!

      Is it? I would have thought that it was clearer that broadband is cheaper and easier to provision in high population density areas like Seoul (45k people per square mile) than Austin (2k people per square mile) or London (13k).

  6. Mark 85 Silver badge

    My mind boggles

    That Wheeler will not toe the Cable Provider's line and tell what most of us already knew instead of the BS the providers are shoveling. So what is he up to that he's not toeing their line and doing their bidding?

  7. ecofeco Silver badge

    Lack of broadband at 25mbps?

    Hell, most places have lack of ANY choices of broadband at any speed. In my big city, I have the heady choice of... 3, count them! 3! providers of ANY type of ISP.

    Over-damned-priced at that.

  8. Ian Easson

    US is far behind the technology curve in IT Infrastructure

    The real reason is not competition.

    It is that the US, as a nation, is nowadays far less advanced than most other advanced Western and Asian countries in terms of IT infrastructure.

    We can debate why this is so, but you cannot deny the fact.

    1. theblackhand

      Re: US is far behind the technology curve in IT Infrastructure

      OK, I'll debate it.... North America moves the second largest amount of data behind AP and almost 1/3 of the total traffic which looks OK based on traffic volume/population.

      http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/VNI_Hyperconnectivity_WP.html

      The reason for poor consumer Internet speeds is lack of competition or any sensible alternative (i.e. BT OpenReach in the UK to allow multiple competitors on a common infrastructure) in a large country where the technical limitations (i.e. distance) of consumer technologies such as xDSL or 3/4G make the provision of high speed Internet challenging.

      Address the competition issue so that consumers have real choice (not just two shades of the same expensive crap) and things will improve. Please don't tie it in with the net neutrality debate - net neutrality is hard (as a network guy you want to be able to classify traffic to provides different levels of service) while the telco competition issue is clear.

    2. joemostowey

      Re: US is far behind the technology curve in IT Infrastructure

      That's What competition does- it drives innovation and forces less competitive providers to create and do more, offer more. The USA is technologically crippled because there are no areas with true competition.

      When a broadband/cable provider can deny you service when their fiber optic line crosses your property, less than 100 feet from your door, that is a sure sign of a monopoly.

      Cable, and telephone providers pay zero fees to place their cables on publicly owned property in the state of Virginia- even non-profit and religious groups have to pay a 100 dollar fee for every use, but telecoms and cable companies get a free ride, and can charge homeowners thousands of dollars to do a simple house drop hook up. Competition would create innovation, cause prices to be cheaper and have providers knocking down your door, eager to hook you up= at high speed!

  9. Amplex

    The best thing the FCC could do to promote broadband would be to quit funding broadband

    The FCC has for many years subsidized, or promised to subsidize rural broadband. This has done nothing but harm broadband deployment in America. No private company is interested in deploying fiber or other advanced technology when the investment can be ruined by a government funded competitor like Centurylink or Frontier. Centurylink and Frontier are not stupid - they have no reason to spend their own money when they can get the FCC to hand them billions in subsidies. This has been going on for years and it continues even today. CAF-II is the biggest handout yet. This isn't good enough for the corporate welfare crowd at Centurylink and Frontier, who are both lobbying to get the definition of broadband changed so that much larger areas of America are suddenly 'unserved' and eligible for even more government money. Watching the way the FCC has been handing out ruling after ruling favoring the iLEC's it's really really starting to look like somebody is getting paid off big time.

    1. Purple-Stater

      Re: The best thing the FCC could do to promote broadband would be to quit funding broadband

      Utter poppycock. (Not even worth an exclamation point.)

      If it wasn't for subsidies there would be near ZERO deployment of fiber into rural areas. There's simply not enough of a customer base to make it worth the expense. And that still hold true if you use "rural" to describe small urban populations, which I suspect you are.

      1. Amplex

        Re: The best thing the FCC could do to promote broadband would be to quit funding broadband

        There is enough money and profit in broadband to build into rural areas. The FCC's own studies for CAF-II and the cost model show many areas can be built for relatively low amounts. There are currently hundreds of WISP's providing broadband service in rural areas, and many are starting to deploy fiber networks with their own money. Over the last 10 years I have done exactly that - built a large wireless network providing broadband where the cable and LEC's didn't want to go. By reinvesting in the network we can now afford to build fiber in much of the network. The conversation with the bank today regarding loans - "so is there anything that the government might do that would ruin the investment"? Yup - give Centurylink and Frontier even more money to build fiber networks over ours. And the banks and private investors walk away.

        CAF-II is shaping up to be one of the biggest boondongles ever for the feds. In a series of decisions going back over 4 years they have decided that funding will be made available anywhere a SINGLE provider doesn't offer both voice and broadband data. Never mind that if you have broadband you have your choice of dozens of phone carriers - the FCC decided it only works if it's one company. Next the Wireline Competition Bureau decided on their own to redefine 'served' to mean that a census block (which are very small) is only served if a former or existing customer in the block has service. This means that even if 4 wireless, 2 fiber companies, and 5 cable companies have facilities attached to the house the area is still unserved and Centurylink, Frontier, Windstream, etc. get handed YOUR tax money to build to that block.

        Broadband demand is very real, and there is money in delivering it. Keep buying into the big telco BS about how expensive it is and how it can only be done with subsidies and your going to get exactly what you have now - single providers, limited investment, and giant welfare babies like Centurylink.

        Want to know what Centurylink did in regard to areas they dispute are already served? They paid their lawyers to file 10,500 pages of documentation challenging whether various census blocks are served. They could have built a considerable amount of infrastructure with the millions they spent on lawyers and lobbyists, but it's cheaper for them to lobby with the money and wait for the handouts.

        CAF-II is nothing more than a giant handout to the same people who, for the last 15 years have promised to build broadband and haven't done it.

        Go ahead - just keep giving them more money. I'm sure you will get a different result this time.

  10. Ole Juul Silver badge

    NCTA gall

    "Chairman Wheeler's remarks about broadband competition underscore the importance of maintaining a light regulatory touch that encourages more investment from more companies,"

    Most of the telecommunications laws we have now are a result of their lobbying. What they're saying is that a "light touch" is when the laws work in their favour.

  11. thomas k.
    Holmes

    Talk is cheap, Mr Wheeler

    So stop f'ing talking and actually *do* something about it.

  12. cs94njw

    Actually quite impressed. Allowing states to create their own broadband network is a nice way of creating competition, without actually actively screwing the broadband companies. Nice move!

    And with the amount of land and tech resources in the US, this should be able to happen quite rapidly.

  13. Version 1.0 Silver badge

    Broadband costs in the Southern States.

    At home in Louisiana I pay $52/month for the fastest AT&T DSL available here (5Mb) and $49/month for COX cable 3Mb service - why two providers? Simply for redundancy, both have dropped off-line at critical times in the past and my wife's a teacher and has to submit her kids lesson plans via the web.

    If you think that $100/month is expensive for 8Mb service then you should try the commercial service from COX - that's $180/month for 3Mb rates - higher rates are available of course ... if you've got the money.

    So we have "competition" and "broadband" in Baton Rouge - aren't we lucky?

    1. phil dude

      Re: Broadband costs in the Southern States.

      For your amusement a bit further north in Knoxville TN, Comcast had a huge PR splash yesterday. It is paywalled, but it reads like a fairytale (or a corporation that is trying to look busy "being efficient")

      They claim it is "open to all", I'll call them and see...

      P.

  14. Alan Brown Silver badge

    Wheeler finally grew a pair

    The FCC has been subject to regulatory capture for decades.

    Perhaps Wheeler's decided he no longer wants a "career progression" into the industry when he retires from govt service.

    Or perhaps someone's found enough dirt on FCC staff to force the FCC's hand.

  15. Stretch

    NCTA

    Simple solution: Do exactly the opposite of whatever the NCTA want and everyone will benefit.

  16. Someone Else Silver badge
    Mushroom

    Well, then...

    US Federal Communications Commission chairman Tom Wheeler has issued his most damning indictment of America's broadband infrastructure to date – claiming more than half of citizens have only one ISP in their area offering 25Mbps or faster connections, and that competition has been crippled by a telecoms duopoly.

    Well, then, seems that the best thing you could do, Mr. Wheeler, would be to put a stop to the Comcast/Time Warner Cable merger. I'm sure you'll get right on that, now won't you?

    What's that I hear...crickets?

    Thought so

    (We need a Corporatist Bullshit icon...)

    1. John Gamble
      Facepalm

      Re: Well, then...

      "Well, then, seems that the best thing you could do, Mr. Wheeler, would be to put a stop to the Comcast/Time Warner Cable merger. I'm sure you'll get right on that, now won't you?"

      Yes... because anti-trust law is handled by the Federal Communications Commission.

      Oh, wait. It's not.

      1. Someone Else Silver badge
        Trollface

        @ John Gamble -- Re: Well, then...

        And, of course, the FCC has absolutely no influence on the DoJ where communications interests are concerned. Nope, none at all...

        1. John Gamble
          Facepalm

          Re: @ John Gamble -- Well, then...

          Everyone has influence (oh look, a list). That wasn't what was claimed though, and we've got enough conspiracy theorists here without adding one claiming that the FCC is Sekretly Kontrolling the DoJ.

          Honestly, get a grip.

  17. Jamie Jones Silver badge
    FAIL

    ""The surest way to stifle further competition and investment in the broadband marketplace is to impose public utility Title II regulation on Internet access. The cable industry is committed to meeting consumer demand for a world class Internet experience and competing in the marketplace with all wired and wireless Internet providers.""

    Despite being a load of bollocks, why would we expect them to say anthing that would benefit the consumer, to the detriment of their members profits?

    Seriously, *anything* they support is going to favour the telcos - that's their job!, so why bother trying to spin it?

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Biting the hand that feeds IT © 1998–2019