WASHINGTON — Americans lack real choices among providers of high-speed Internet service, with fewer than one in four homes having access to two or more providers of the broadband speeds that are quickly becoming “table stakes” in modern communications, the Federal Communications Commission (FCC) chairman said Thursday.
The chairman, Tom Wheeler, said in a speech that the FCC planned to promote more choices and protect competition, because a lack of adequate consumer choice inhibits innovation, investment and economic benefits.
“There is an inverse relationship between competition and the kind of broadband performance that consumers are increasingly demanding,” Wheeler said. “This is not tolerable.”
While about 80 percent of U.S. homes have access to a wired broadband connection that provides service at 25 megabits per second or greater, an overwhelming majority of those have no choice among providers because there is only one in their community, Wheeler said, citing statistics from the Commerce Department’s State Broadband Initiative.
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Even that overstates the level of competition because “users cannot respond by easily switching providers,” Wheeler said. “Once consumers choose a broadband provider, they face high switching costs that include early-termination fees and equipment-rental fees.”
Wheeler said the FCC would protect competition where it existed and encourage greater competition where it could exist. That includes insuring “that the Internet remains free of barriers erected by last-mile providers,” the companies like Comcast and Verizon that provide the link between a consumer’s home and the Internet writ large.
Those comments could hold significant implications for Comcast, which is trying to gain FCC approval to buy Time Warner Cable. Comcast and Time Warner Cable do not compete in any markets, so the acquisition would not reduce competition, the companies say. But eliminating an independent operator that could later expand its service into competing markets could adversely affect future competition.
Wheeler said that the commission would work to create competition where it did not exist, including in municipalities that want to build fiber networks for residents but are restricted from doing so by state laws.
Wheeler cited the long-distance market of the 1990s, when consumers could easily switch from one long-distance carrier to another, as “what a truly competitive telecommunications marketplace looks like.”