Are American consumers short-changed by a lack of internet options?

1 Apr 2015

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Amid reports of even greater consolidation between cable providers in the US, is broadband availability becoming a problem?

An article on the Verge suggests as much, finding that many parts of the US see people left with little option but to go with one or two providers.

What’s significant in this instance is in Europe it’s vastly different, and an awful lot cheaper.

Written by the Centre for Public Integrity, the article claims that the major providers of broadband operate in isolation of each other, rarely crossing paths and therefore enjoying the lion’s share of their locales.

This, in turn, hurts competition and sees prices positioned at a very high tariff.

“Analysis of internet prices in five US cities and five comparable French cities found that prices in the US were as much as 3.5 times higher than those in France for similar service.”

Not just that, French broadband consumers enjoy seven service options, on average, compared to two in the US.

It is explained by the history behind these service providers, often acquiring or evolving from telephone companies that enjoy sole right to connections and cabling infrastructure.

Outside the US it’s far different with France – the example used – operating in an open access system, whereby rival companies can share the actual networks for a fee. This is common throughout Europe.

It calls into question the whole idea of competitiveness in the US. Earlier today we reported the potential consolidation of the top two cable providers in the US, as well as the fourth and sixth largest, creating two new major players above all else.

However considering the sheer size of the US, and its population, it’s often unfair comparing it to one country elsewhere. What would be interesting would be to see a US/EU comparison, considering the federal makeup on one side of the Atlantic, and the growing federalisation the other.

Fibre cables image via Shutterstock

Gordon Hunt is senior communications and context executive at NDRC. He previously worked as a journalist with Silicon Republic.

editorial@siliconrepublic.com