About two months ago, I received a letter from my internet service provider, Optimum Online, stating that my monthly bill was about to increase again, to nearly $60 per month. This price has been rising steadily from $30 about two years ago.
Optimum’s service hadn’t improved, increased in speed, nor had the number of internet blackouts decreased. Heck, I wasn’t even getting the speeds that I paid for. Naturally, I contacted Optimum to figure out what was going on:
I asked: why did the price go up? Response: that’s our new price [silence].
I said: well, what if I switched to another ISP like Comcast or Time Warner? Response: lol, they don’t serve your area.
I asked: so, how could I reduce the price? Response: You can add cable TV for only $10 more per month.
I grumbled at my lack of consumer power (it’s un-American!) and paid the bill. Just like gas, electricity and water, I could never live and work today without home-internet.
As it turns out, I’m not alone: most American’s are getting a bad deal when it comes to internet speeds and average cost. Some consumers are even getting what’s called “Traffic Shaping” or “Throttling”: when your ISP intentionally slows your connection speeds in order to encourage you to pay more for an “improved” service.
On average, US internet consumers are paying $3.33/mbps (megabytes per second). Compare this to Japan which pays $0.27/mbps or Korea at $0.45/mbps.
So what’s causing this price gouging? It’s a lack of competition (or regulation).
The Washington Post recently wrote a piece on What a Competitive Broadband Market Looks Like. When Google announced plans to bring high-speed fiber optic service to Austin, Texas, it booted-up competition between the old-time big ISP’s, the Google newcomer, and the local little guys. This competition has brought the prices down and the quality up, and showed Austinites that even local ISP’s can successfully compete with the national-brands.
Unfortunately, outside of Austin, few communities have more than one or two ISP options. Public institutions like libraries, schools, and other community facilities are forced to pay these rates, even though our tax dollars are paying for the private companies’ infrastructure buildouts. While buildouts are a noble effort, it’s nonetheless private double-dipping.
In short, should ISP’s be treated as a public utility, just like sewer and electricity, or should we encourage a greater number of ISP competitors for local communities? Are there inherent security risks with large, regulated providers? Or are we getting stuck on ISP’s and we should really be focusing on data access instead?
Just some thoughts.