The Cost of Connectivity 2020, a recent report from the Open Technology Institute (OTI) at New America, explores how much Americans pay for Internet access compared to those in other parts of the world.

After examining 760 broadband plans in 28 countries in North America, Europe, and Asia, the report's authors conclude that Americans pay higher fees for slower speeds, with communities of color and low-income households most affected. The report points to a lack of Internet service provider transparency and competition as reasons why costs are higher in the United States compared to other places. OTI found that municipal broadband networks, like the one in Ammon, Idaho, provide much better value to subscribers and offer some of the most affordable Internet plans in the country.

Some takeaways from The Cost of Connectivity 2020:

• "[I]nternet service in the United States remains unaffordable for, and therefore inaccessible to, many low-income households . . . In April 2020, 43 percent of lower-income parents reported that their children will likely have to do homework on their cellphones, and 40 percent said that their children would likely have to use public Wi-Fi to finish schoolwork because they lack a reliable internet connection at home. The 'homework gap' also disproportionately affects students who belong to BIPOC communities."

• "Just three U.S. cities rank in the top half of cities when sorted by average monthly costs. The most affordable U.S. city—Ammon, Idaho — ranks seventh."

• "Data caps further increase the cost of internet service while limiting users’ data consumption . . . Furthermore, data caps can have anticompetitive effects on the wider ecosystem, especially if an Internet Service Provider (ISP) selectively applies data caps to preference its own content while deprioritizing competitors . . . Notably, most of the plans with data caps are in the United States. In Europe, all plans advertised no caps or did not specify. In Asia, only one city specified a cap."

• "Consumers do not always read the (very) fine print to find the contract termination fees, and as a result are more likely to underestimate their switching costs — an important distinction when consumers are more likely to overestimate cost-savings from long-term contracts that are more visibly advertised...

This is the transcript for episode 264 of the Community Broadband Bits podcast. Mason Carroll and Preston Rhea join Christopher Mitchell on the show to talk about their work at Monkeybrains, an urban wireless Internet Service Provider. Listen to the audio here.

Mason Carroll: Every single person needs to have their own Internet connection. This is not just like, "Oh, I can sort of get the building-wide Wi-Fi as I stand near my front door." No. You should have your own Internet connection that you can plug in, and watch TV, or set up a computer, or to do your work. That's really what digital quality is.

Lisa Gonzalez: This is episode 264 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. Episode 264 takes us to San Francisco, home to the Golden Gate Bridge, cable cars, and Monkeybrains. Preston Rhea and Mason Carroll from the Internet service provider are here to tell us about the local company, the services they provide in the Bay Area, and the work they're doing to chip away at the digital divide. Learn more about the company at Monkeybrains.net. As a reminder, this conversation with Preston and Mason is commercial free, but our work at ILSR requires funding. Please take a moment to contribute at ILSR.org. If you have already contributed, thank you. Now, here's Christopher with Preston Rhea and Mason Carroll, from Monkeybrains.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell with the Institute for Local Self-Reliance. Joining me today is Preston Rhea, Senior Field Engineer for Monkeybrains, an ISP in California. Welcome to the show.

Preston Rhea: Thanks Chris, a pleasure to be here.

Christopher Mitchell: And we also have Mason Carroll, Lead Engineer for Monkeybrains. Welcome to the show as well.

Mason Carroll: Yeah, thanks a lot.

Christopher Mitchell: So, I think the first question is, monkey brains, I remember running into those in a Harrison Ford movie a long time ago. What is Monkeybrains in San Francisco?

Preston Rhea: Monkeybrains is a local Internet service provider. We're a...

The Open Technology Institute (OTI) at the New America Foundation recently released its report on bandwidth caps. "Artificial Scarcity: How Data Caps Harm Consumers and Innovation" is the latest warning about an issue with grave implications. The PDF is now available to download. 

Last November, the Government Accounting Office (GAO) released a report [PDF] with serious comments on how ISPs might abuse their power through bandwidth caps. In that report, the GAO strongly suggested the FCC take action.

This report by Danielle Kehl and Patrick Lucey further examines how this profit grabbing technique from the big ISPs impacts consumer decisions and usage. 

From the OTI press release:

In this paper, we examine the growth and impact of usage-based pricing and data caps on wired and mobile broadband services in the United States. We analyze the financial incentive that Internet service providers (ISPs) have to implement these usage limits and discuss research that demonstrates how these policies affect consumer behavior. In particular, we explain how data caps can make it harder for consumers to make informed choices; decrease the adoption and use of existing and new online services; and undermine online security.

It is also increasingly clear that data caps have a disproportionate impact on low-income and minority populations as well as groups like telecommuters and students. In the conclusion, we urge the Federal Communications Commission (FCC), particularly as the new Open Internet Order goes into effect, to open up a serious inquiry into whether data caps are an acceptable business practice.  

In addition to their own data and conclusions, Kehl and Lucey provide information to many other resources that tackle the implications of bandwidth caps. As consumers' need for bandwidth increases with their changing Internet habits, this topic will only become more pressing.

This is the third year the Open Technology Institute (OTI) at New America Foundation studied the cost and quality of connectivity in the U.S. Once again, the results indicate we trail behind peer countries. On November 11th, Chris joined Sarah Morris, one of the report authors, to discuss the report's findings, municipal networks, and how Title II reclassification may change the landscape. They joined Dave Miller for the Think Out Loud program on Oregon Public Broadcasting. 

In addition to detailed data analysis on where the best speeds and prices are,  The Cost of Connectivity 2014 provides reviews of several other papers from sources such as Akamai, the FCC, and the American Enterprise Institute.

Some notable findings from the report:

• The average cost of plans in nearly every speed tier studied for the report was higher in the U.S. than in Europe.
• Cities considered speed leaders have consistently increased speed offerings on an annual basis. In places where the speed was not increased, as in Lafayette, rates decreased. Almost half of the speed leaders cities offer gigabit speeds. 

OTI made special note of the success of municipal networks in places where traditional providers are not willing to invest:

Although there are many examples of successful locally-owned networks, we focus on Chattanooga, TN; Bristol, VA; and Lafayette, LA, which now offer some of the fastest and most affordable high-speed residential products available in the country despite the fact that they have some of the lowest population densities among the cities we survey.

All three cities offer gigabit speeds that place them on par with Hong Kong, Seoul, Tokyo, and Zürich in our speed leaders rankings, although the prices vary from city to city, and are ahead of the major incumbent ISPs in the U.S. In fact, the only other provider that offers gigabit speeds in the cities we surveyed is Google Fiber, which sells 1 Gbps service in Kansas City, KS, and Kansas City, MO, for the same price as EPB in Chattanooga, TN. By contrast, Verizon’s top tier is a 500 Mbps symmetrical connection that is available to some residents of New York, NY; Washington, DC...