Every Year Like Clockwork The Telecom Industry Lies And Claims Broadband Prices Are Dropping

Once a year like clockwork, the telecom industry trade association releases a study claiming that if you squint just right-broadband prices have dropped year after year. It's their annual attempt to pretend (and to help the politicians that coddle them pretend) that the U.S. broadband market isn't heavily monopolized and woefully uncompetitive.

Last week, AT&T-backed telecom trade org US Telecom released a new study once again claiming that the U.S. broadband market is secretly super competitive and that consumers have seen amazing price reductions over the last decade in the cost of broadband service. So amazing, that the report claims that the most popular tiers of service saw an 18 percent reduction in cost.

But as telecom sector consultants like Doug Dawson note, to achieve this illusion the report is highly selective with its comparisons. For example it fixates heavily on how the cost over time to buy a megabit of speed has dropped thanks to better networks or faster speeds. But it avoids discussing how, given the way these companies package products and upsell you, prices on the tiers people actually use continue to rise significantly.

For one thing, the report has fun comparing the cost of premium tiers from years' past to the non-premium products of today:

Again, with Comcast, the basic 16/2 Mbps broadband in 2009 cost $52.95 and also required a $10 modem. Today, the basic price for 300 Mbps broadband is $93 with a $15 modem. That's an increase since 2009 of $45, a 72% increase. The authors of the report would have instead pointed to the 50/10 Mbps product as the most comparable product - but in 2009, that was a premium product priced at $149.95 plus a $10 modem. The report would say that the price of broadband has dropped."

Another key problem with most of these studies: a lot of the high costs of service are tacked on to your advertised rate after you subscribe. For example these studies don't include numerous bullshit fees (see: the Internet Cost Recovery Surcharge), or arbitrary and unnecessary usage caps and overage fees. The reports also don't discuss the pricing tricks ISPs play with bundling, where the price of broadband is often significantly more expensive if you refuse to bundle TV or phone service or sign long-term contracts.

These kinds of reports are effectively disinformation, peddled to captured regulators and lawmakers so that they can help industry pretend that decades of coddling regional mono/duopolies doesn't cause market harm. It's the same reason the telecom industry has historically fought against better broadband maps, given more accurate data would illustrate the painful lack of competition in most U.S. markets.

It's worth noting that not only does the U.S. FCC never tackle (or even address) monopoly (or duopoly) power. But it also refuses to collect and share local pricing data, given that would only act to illustrate market failure. A very broken and unpopular industry lies and pretends everything's fine, and regulators, with the occasional, fleeting exception, are generally happy to help sell the illusion.