Broadband: A Bright Spot for Consumers
A proof point for legislators on market-driven policies
The topic of conversation at dinner tables across the country likely includes consternation over skyrocketing prices for seemingly everything. Today, a trip to the grocery store or a gas station is guaranteed to cost families much more than their pocketbooks are accustomed to. American families are having to rethink their summer vacation plans and reprioritize their spending. It’s no surprise a recent Pew poll saw 70% of Americans cite inflation as their top concern and a ‘very big problem.’
Despite the rampant rates of inflation our country is experiencing, one consumer good has been successfully weathering the storm - broadband. That’s right, a new report from US Telecom found pricing for the most popular broadband services have dropped by 44.6% since 2015, and in the last year alone prices dropped by 14.7%. All the while, the quality and speed of these services have dramatically improved - download speeds offered have increased by 127.7% during the same period.
The duality of broadband’s lower costs and faster speeds is in many ways a reflection of the improved policy decisions the FCC has made in recent years. Beginning with the repeal of net neutrality rules, which removed impediments caused by regulatory red tape that has traditionally hampered the ability of Internet providers to improve offerings to consumers. In spite of the hyperbolic claims that ending net neutrality would lead to the “end of Internet as we know it” the reality is its repeal has increased investment into broadband networks which has driven dramatically faster Internet speeds in America.
The positive impacts stemming from the FCC’s removal of net neutrality rules in 2017 are clear to see. As the report shows, prior to the repeal, one unnamed company’s fastest service was 100 Mbps down/5 Mbps up at a price of $114.99 per month. Seven years later, the same provider offers 200 Mbps down/10 Mbps up at a price of $74.99. When a market is unencumbered by government involvement, consumers enjoy better products for lower prices. For these trends to continue, it is crucial to preserve a free market that allows for innovation stemming from competition.
These improvements to the US Internet landscape couldn’t have come at a better time. More than two years after the outbreak of COVID, by and large Americans were able to transition to a more remote life. Using these faster speeds to adapt to the hybrid virtual-in person life that has marked the pandemic. Working from home, online learning and using increased Internet traffic whether through zoom meetings and connecting virtually. Conversely in Europe, their heavy- handed regulatory approach of Internet services required throttling (downgrades video quality - fuzzy - access altered) of video services like Youtube, Disney+ and Netflix to handle the increased traffic during the pandemic.
As we move beyond COVID, Americans’ long term concerns are rightfully turning back to the economy. Policymakers should heed the fact that Internet access hasn’t succumbed to the mud of inflation that’s impacting the rest of the economy when thinking through decisions to curb rising prices and put the economy in a stronger position.
It’s time for legislators to promote more market based solutions that naturally drive consumer prices down while the quality of said goods or services improve.