In a recent article, “Tell The Story We Know: Broadband Competition is Too Limited,” Jonathan Sallet laid out the case for robust broadband competition as a necessary step in expanding high-quality connectivity nationwide. “Academic research tells us that more broadband competition matters: pushing rivals to up their game, saving money for consumers, increasing the quality of service,” explained Sallet, a current Benton Institute Senior Fellow and former General Counsel at the Federal Communications Commission.
The article, co-published by the Benton Institute for Broadband & Society and the Coalition for Local Internet Choice, identified greater broadband competition as one of the four “building blocks” needed to reach the goal of connecting all Americans to modern Internet access by 2030. Sallet has expanded on this goal in the report, Broadband for America’s Future: A Vision for the 2020s, which we covered last year. In addition to creating more Internet choice, the report cited the need for continued efforts to deploy broadband infrastructure, increase affordability and adoption, and connect community anchor institutions.
Communities Crave Competition
It’s not a secret that greater broadband competition lowers prices and improves service quality. For example, the municipal fiber networks in Wilson, North Carolina, and Chattanooga, Tennessee, have kept incumbent providers’ rates low even as speeds increased. “By the FCC’s calculation, new competition saved Wilson’s approximately 50,000 residents more than $1 million per year,” Sallet noted in the article.
However, as he pointed out, other communities are much more likely to live under a broadband monopoly or duopoly — and to pay dearly for it. “We can expect people with only one choice to pay monopoly prices,” he wrote, “and people with only two choices to pay the higher prices typically charged by duopolies.” He continued:
In fact, new FCC data (which we all know systematically overstates the presence of fixed broadband competition) shows that, at the typical speed of 100/10 Mbps, 80 percent of Americans have either no choices in broadband providers (monopoly) or only two choices (duopoly). That’s very little competition.
One way to address the lack of Internet choice is to return authority to local governments to invest in the broadband infrastructure their residents and businesses need. “Local communities should have the freedom to help their people fully participate in a broadband world: learning, getting jobs, obtaining healthcare online,” explained Sallet.
Alexandria, Virginia, has only one high-speed, fixed-broadband provider. As Alexandria Mayor Justin Wilson explains, lack of competition leads, he believes, to an inferior product. Moreover, small-business owners say that lack of broadband competition limits investment and makes Alexandria a less attractive location for businesses. One small-business owner, whose business requires the transfer of large data files, told Mayor Wilson that he sends his employees who live in other places home to send and receive files where their broadband is better than it is at work.
To help tackle these issues, Alexandria plans to construct an institutional fiber network to connect city buildings, schools, and other community anchors. In the future, the city could lease extra capacity on the network to private providers to build out to businesses and residents. Alexandria began searching for a vendor to build the network last fall.
The current Covid-19 outbreak, which is forcing families to rely on whatever connectivity they have at home, further underlines the importance of local authority as an antidote to broadband monopoly. A lack of competition has not only put affordable, reliable Internet access out of reach for many, but it also threatens entire communities' links to the outside world if their sole broadband provider experiences a network disruption during this time.
Listen to Community Broadband Bits episode 381 to hear more from Sallet on broadband competition and on his report, Broadband for America’s Future: A Vision for the 2020s.