New Commerce Department Report Examines Competition Among U.S. Broadband Service Providers

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Economics and Statistics Administration, U.S. Department of Commerce

Dec 18, 2014, 09:29 ET

WASHINGTON, Dec. 18, 2014 /PRNewswire-USNewswire/ -- A new report released today by the U.S. Commerce Department's Economics and Statistics Administration (ESA) examines, for the first time, competition at the full range of speeds of Internet service in the U.S. The ESA report titled, "Competition Among U.S. Broadband Service Providers," finds that far more competition exists at slower speeds than at higher speeds.

"This report gives policymakers a deeper understanding of what is occurring in the ISP marketplace," says U.S. Commerce Department Chief Economist Sue Helper. "We know that competition typically drives down prices. And we also know that increasingly, higher Internet speeds are required for optimal functionality of popular, high-bandwidth computing applications. As more and more commerce and information move online, we risk further widening the digital divide if access to affordable, higher speed Internet doesn't keep pace."

Specifically, at download speeds of 3 megabits per second (Mbps), 98 percent of the U.S. population had a choice of at least two mobile ISPs, and 88 percent had two or more fixed ISPs available to them. However, when multiple household members consume video streaming services, music streaming, and online games, 3 Mbps can quickly become inadequate. To understand download speed at 3 Mbps, it takes approximately 2.25 hours to download a 6 gigabyte movie. The same movie would take only 16 minutes to download at 25 Mbps.

At somewhat higher speeds, such as 10 Mbps, the typical person is able to choose among two fixed ISPs. They also have the option of subscribing to any of three mobile ISPs at 10 Mbps. (Because fixed and mobile service is imperfect substitutes, the report analyzes them separately.)

At speeds greater than10 Mbps, the number of providers decreases further. For example, only 37 percent of the population had a choice of two or more fixed-service providers at speeds of 25 Mbps or greater; only 9 percent had three or more choices.

The report also found that four out of ten Americans did not live where very-high-speed broadband service – 100 Mbps or greater – is available. Of those with access to fixed broadband service at this speed, only 8 percent of the population had access to two or more providers, and 1 percent had access to three or more. Only 3 percent of the population had 1 Gbps or greater available, and none had two or more ISPs at that speed. Mobile service is virtually non-existent at download speeds of 25 Mbps or greater. The full Economics & Statistics Administration report can be found here: http://www.esa.doc.gov/Reports/competition-among-us-broadband-service-providers

A new blog about the report can be found here: http://www.esa.doc.gov/Blog/2014/12/16/how-much-competition-exists-among-isps

Contact: Austin Durrer
(202) 482-0058; [email protected]

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SOURCE Economics and Statistics Administration, U.S. Department of Commerce