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Weak competition could hike your broadband bill by $96 a year

A new consumer survey says that those with the most choice in broadband providers are paying the least and reveals opinions about municipal broadband, internet access, affordability and more.

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Photo: John Schnobrich/Unsplash

American homes that have lots of choice in broadband providers can expect to pay around $8 less per month for internet than those who are locked into a single company, according to a new survey from Consumer Reports.

The median monthly bill for people with four or more broadband providers in their area was $67. It was $75 for those with only one choice, according to the survey of nearly 2,600 US residents. In a sign that consumers are thirsty for increased broadband access, the survey also suggested wide approval for municipal broadband programs run by local governments.

The results come a month after the veteran consumer group launched a separate push to obtain thousands of homes' broadband bills to learn how much users are paying, figure out where competition is scarce for internet service and help build the case for treating broadband more like an essential utility. The first results for that initiative are expected in the fall.

While competition generally drives down prices for consumers in all industries, the broadband industry is notoriously opaque. It's still unclear exactly how much Americans actually pay and how much competition is available to them. The trade group USTelecom, for instance, says the most popular choice for consumers costs less than $50 each month. But in the Consumer Reports survey, the median bill for those with access to broadband was $70 monthly, including taxes and fees. Roughly a quarter of those who have broadband said they had no choice in providers.

Proponents of expanding broadband access often point to municipal networks, established by local governments, as a possible solution to the problem of limited competition. The Consumer Reports survey found widespread support for such networks. Three-quarters of people who responded said that municipal broadband should be allowed "because it would ensure that broadband access is treated like other vital infrastructure such as highways, bridges, water systems, and electrical grids, allowing all Americans to have equal access to it." That figure included more than 60% of Republicans and a full 85% of Democrats.

The telecom industry has cast municipal broadband as an unnecessary expense for taxpayers and a way for governments to put their thumb on the scale of free markets. State-level action also faces an uphill battle, with nearly two dozen states having outright bans or other significant roadblocks in place regarding municipal networks.

The issue of internet affordability has only become more urgent during the pandemic. In the survey, 43% of respondents said they are using the internet more than they were before COVID-19 hit. "The pandemic illuminated how much people need access to an affordable, reliable internet connection," said Jonathan Schwantes, senior policy counsel at Consumer Reports, in a statement. The group reported separately that, as of February, 76% of people say the internet is "as important as other basic necessities," up from 61% when Consumer Reports began looking into the issue in 2017.

And yet, the most recent survey found that 15% of respondents have been relying exclusively on a wireless smartphone data plan. Another 5% are still using DSL or dial-up, and 3% completely lack internet access at all. For those who don't have broadband, a quarter said it wasn't available where they live, and nearly a third said it cost too much.

These issues of access are particularly pronounced in communities of color. More than one in five Black respondents said they rely on a wireless connection for their home, and nearly a third of those from the same group who do have broadband called it somewhat or very difficult to afford. Nearly one third of people without a high school diploma also said they had to rely on wireless access.

During the pandemic, the federal government has struggled to get broadband benefits to people who have trouble affording internet access. The survey comes as a bipartisan group of lawmakers and the White House seek to advance an infrastructure bill. According to the administration, the plan would allocate $65 billion so that "every American has access to reliable high-speed internet." It also includes measures to allow people to comparison shop between broadband plans more easily and "help more low-income households access the internet."

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