Broadband Reality Check:Americans woefully behind in internet access

A new report by Free Press, the Consumer Federation of America and Consumers Union shows that affordable, high-speed internet access in the U.S. lags far behind what's available in the rest of the digital world, this in contrast to the rosy picture painted recently by an FCC communique.

"Despite claims to the contrary, the digital divide in America remains large and will continue to grow unless some real changes are made," said Ben Scott, policy director of Free Press. "By overstating broadband availability and portraying anti-competitive policies as good for consumers, the FCC is trying to erect a façade of success. But if the president's goal of universal, affordable high-speed internet access by 2007 is to be achieved, policymakers in Washington must change course."

In July, a report by the FCC hailed recent progress in improving broadband access here. Upon closer scrutiny, however, according to an independent study by Free Press research fellow S. Derek Turner, the claims made by the feds - repeated in a subsequent WSJ op-ed bloviation by FCC chairman Kevin Martin - are, to be kind, wildly optimistic.

Broadband Reality Check, the new study from the consumers' groups calls into question the FCC's findings. Among its conclusions:

# The FCC overstates broadband penetration rates. The FCC report considers a ZIP code covered by broadband service if just one person subscribes. No consideration is given to price, speed or availability of that connection throughout the area.

# The FCC misrepresents exactly how many connections are "high-speed." The FCC defines "high-speed" as 200 kilobits per second, barely enough to receive low-quality streaming video and far below what other countries consider to be a high-speed connection.

# The United States remains 16th in the world in broadband penetration per capita. The United States also ranks 16th in terms of broadband growth rates, suggesting our world ranking won't improve any time soon. On a per megabit basis, U.S. consumers pay 10 to 25 times more than broadband users in Japan.

# Despite FCC claims, digital divide persists and is growing wider. Broadband adoption is largely dependent on socio-economic status. In addition, broadband penetration in urban and suburban in areas is double that of rural areas.

# Reports of a broadband "price war" are misleading. Analysis of "low-priced" introductory offers by companies like SBC and Comcast reveal them to be little more than bait-and-switch gimmicks.

# The FCC ignores the lack of competition in the broadband market. Cable and DSL providers control almost 98 percent of the residential and small-business broadband market. Yet the FCC recently eliminated "open access" requirements for DSL companies to lease their lines, rules that fostered the only true competition in the broadband market.

"The FCC is trying to put the best face on this problem it can, but the people who can't afford or don't have access to high-speed internet know the truth," said Mark Cooper, research director of the Consumer Federation of America. "Affordable high-speed internet means stronger economic growth, more educational opportunities and exposure to diverse points of view. If the FCC continues to ignore reality, the gap between the haves and have-nots will become too wide to bridge."

The three groups call on Congress to enact clear policies that will free the broadband market from domination by a handful of large cable and telecommunications companies. Their recommendations include ensuring open access to all high-speed communications networks, removing restrictions on public entities that seek to offer broadband services to consumers, and opening up more of the broadcast spectrum for wireless internet applications.

"Fudging the facts won't provide high-speed internet access to those who need it most," said Jeannine Kenney, senior policy analyst for Consumers Union. "If the FCC is content to let cable and phone companies control the broadband market, then consumers need a third option - wireless broadband that is less expensive and which doesn't depend on DSL or cable modems. It offers the best and perhaps now the only way to close the digital divide."

Waiting on a Congress bought and paid for by telecommunications giants or on the city council in Santa Monica, crippled as it is by bureaucratic ossification, is pointless. Santa Monicans needs to move now to create a city-wide cooperative to provide free access to everyone.

To read Broadband Reality Check in full, please go here: <http://www.freepress.net/docs/broadband_report.pdf>

See previous IPSM posts on this topic:
Needed: Universal Wi-Fi Access
Municipal broadband is coming...but is it coming here?
Falling Behind
Did we come in lower than Old Sturbridge Village?
Some Free Wi-Fi Spots in Santa Monica

Free Press: <http://www.freepress.net/>
Consumer Federation of America: <http://www.consumerfed.org/>
Consumers Union: <http://www.consumersunion.org/>