US broadband costs are far higher than those in Europe, and that’s because of two very different ideas about competition in the market, argues a policy group …
Monthly fixed broadband costs in the US typically range from around $35 to over $100, with an average of $61.07. In contrast, the average cost in European countries is mostly in the $20-$40/month range.
CNET suggests that this is because of the different definitions of competition.
In the US, competition among internet providers has historically happened at the infrastructure level, meaning your choice is between DSL, cable, fiber or 5G satellite. With so few competitive options available to consumers, companies don’t feel the need to jostle for customers by lowering prices, Vinhcent Le, legal counsel for technology equity at the Greenlining Institute, said in an interview.
Meanwhile in Europe, open access infrastructure — which in the case of broadband means a physical network that different service providers can all make use of — has allowed multiple companies to compete for customers at a service level, forcing them to offer more competitive prices […]
Attempts to regulate in favor of more open access infrastructure in the US has elicited pushback from the powerful telecoms lobby, which has a vested interest in keeping competition minimal to ensure prices stay high.
“We just lack that coordination that a lot of other countries have,” Le said. “That’s a lot by the design of the incumbents — they’ve sued in a lot of states to prevent utilities from expanding their networks outside the city limits.”
California policy group Greenlining Institute believes that the Swedish model would be a good one for the US to copy.
Sweden is the model that Le believes could be ideal for a state like California to follow to improve broadband affordability. The regions are comparable in terms of rural-urban divide and therefore make for a good point of comparison, he said.
In Sweden, the government gave support to cities to build infrastructure that is fully open access, taking the rollout of fiber to homes out of the affordability equation and allowing multiple providers the opportunity to compete for customers with well-priced services while guaranteeing good performance.
“Sweden’s open-access model, paired with its early advantage of investment through municipal networks, is a key point in the story of that country’s market,” said Woodhouse.
The White House has described broadband as “the new electricity,” so it remains to be seen whether it can generate the political will to overcome resistance from telecoms companies.