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Big Cable falls into wormhole to alternate universe, sends back blog post about USA's amazing broadband

You are wrong about internet speeds. Love, NCTA

By Kieren McCarthy, 27 Jul 2017

Analysis In a striking example of corporate gaslighting, the US cable industry's trade association, the NCTA, claims that the defining characteristic of the US broadband market is competition.

"Competition isn't just the rule in television, it defines broadband markets as well," a new post by the organization argues. "In spite of living in one of the largest and most rural nations, 88 percent of American consumers can choose from at least two wired internet service providers."

It then goes on to congratulate itself over how internet speeds have "quadrupled over the last five years, from 23.4 Mbps to 86.5 Mbps [with] the average price per megabit dropping 90 percent in 10 years."

And it marvels at how "over the last 25 years, Americans have gone ... from screeching, sluggish dial-up internet access to multi-gigabit broadband internet." It concludes that: "Competition is alive and well in the TV and internet marketplaces and consumers are benefiting every day."

All of which probably comes as a shock to actual United States consumers – particularly those who have lived anywhere else in the developed Western world.

For those who have studied the broadband market in the US, "competition" is not the first word that springs to mind, but rather "collusion."

Literally a decade ago, this reporter was witness to the US government delegation – under pressure from the cable industry – preventing publication of an Organisation for Economic Co-operation and Development report into broadband speeds and competition, because it put the country near the very bottom of the table. Things haven't changed much in the meantime.

Read all about it

There is even an entire book – Captive Audience, written in 2013 – that goes into how the cable industry has managed to maximize its profits by offering slow speeds at high prices and carefully not competing with itself.

If the United States' broadband market were to be summed up in a phrase, it would be: "Take your pick: slow internet or fast internet." In 2017, Ford's car comes in both black and blue.

Even in the most wired part of the country, quite possibly the world – the San Francisco Bay Area – the choice of an internet connection above what the federal telecom regulator the FCC defines as "minimum broadband speed" (25Mbps) is typically delivered by a single operator, giving them enormous market power to set prices.

Low-speed internet options are also typically provided by a single operator – but with other companies allowed to buy it wholesale and then market it under their own name, giving the illusion of actual competition.

So how can the NCTA claim that "88 percent of American consumers can choose from at least two wired internet service providers"?

Well, it does so by travelling back in time. To 2014, in fact. If you click through the NCTA blog post to a second post, and then look at the small print, it is referencing a US Commerce report from December 2014.

Why 2014? Because at that time, the FCC defined "broadband" as being 4Mbps – which is enough for music streaming or email but will falter if you try to watch high-definition video – ie, Netflix – or attempt online gaming.

Just two months before that Commerce report came out, the then-chair of the FCC, Tom Wheeler, gave a damning indictment of the state of the broadband market, decrying the lack of competition and slow speeds available to US consumers.

Competition? We've heard of it

He also noted that "even though there may be competition, the marketplace may not be offering consumers competitive opportunities to change providers, especially once they've signed up with a provider in the first place."

Just one month after the December, 2014 report that the NCTA quotes, the FCC voted to increase the definition of broadband from 4Mbps to 25Mbps, called the old definition "dated and inadequate."

That wasn't all either – a year later, in January 2016, the cable industry went ballistic when the FCC's annual Broadband Report exposed the depth of failure in the market and the regulator threatened to "take immediate action" if the situation wasn't remedied.

That report found that 34 million Americans don't have access to any broadband providers – as defined by 25Mbps – and that the US is still massively behind other developed nations in terms of speed, roll-out and competition (16th out of 34 developed nations).

Eight months later, little had changed.

Another FCC report highlighted that just three per cent of the country has a choice of three or more providers (the definition of real competition) for speeds above 25Mbps; a further 50 per cent had a choice of two.

If you take away the NCTA's reliance on a definition that has been out of date for more than three years, its 88 per cent figure falls to three per cent. If you are generous and reduce that speed to just 10Mbps, the figure is still 63 per cent.

Have your Pai and eat it

So why does the NCTA imagine it can get away with such blatant falsehoods, selling people on the idea that everything is great, that consumers' own experience is wrong, and the broadband market is "defined by competition"?

Well, that's because the new FCC chair, Ajit Pai, is almost certainly going to force through different conclusions when the regulator next reports on the broadband market. Pai and his Republican colleague Michael O'Rielly voted against the proposal in January, 2015 to raise the definition of broadband to 25Mbps.

They didn't attack it on technical grounds – because the FCC's staff had gone into some detail about modern internet use and the typical speeds required – but instead attacked the FCC itself.

O'Rielly called the recommended increase "politically driven" and "a sham." Pai argued that "American taxpayers aren't getting the bang they deserve for their hard-earned bucks." He opined that rather than produce reports that embarrass the cable industry (which he used to work for), what was needed was "a real broadband deployment agenda – a proactive, concrete, bipartisan, dedicated effort to deliver digital opportunity to every American who wants it."

It is no coincidence that Pai and O'Rielly have spent the past few weeks traveling around the country talking to local communities about broadband rollout.

As bizarre as it may sound, the chair of the FCC traveling the country talking about broadband rollout is a clear message to the cable industry that it can continue to charge too much for too little. And then lie about it in blog posts. ®

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