Reining in the Cost of Connectivity

Americans in major cities such as New York, Los Angeles, and Washington (DC), continue to pay higher prices for slower Internet service when compared to similar cities in other parts of the world.

In this paper, we examine America’s broadband challenges, analyzing a number of factors that impact speeds and prices. Our analysis is based on the data we collected for The Cost of Connectivity 2013, a survey of consumer broadband pricing data from 24 cities around the world. This paper identifies ways to promote more robust competition and provide consumers with better service at a more affordable price. Acknowledging that no single solution or “magic bullet” can solve all of America’s broadband challenges, we offer recommendations aimed at improving the status quo. We argue that it is crucial to create better conditions for providers to enter the market, to compete more effectively, and to innovate on existing and new services. In particular, policymakers should improve data collection practices around pricing information, work to remove barriers to the development of local networks, encourage cooperation in broadband build outs, support pro-consumer and pro-competitive policies, and enforce competitive protections in upcoming spectrum auctions.