Dominant Wireless Broadband Providers Overcharge US Consumers by $15 Billion Per Year

The Consumer Federation of America (CFA) released a report demonstrating that the recent analyses of broadband prices and services from the Phoenix Center and the Information Technology and Innovation Foundation (ITIF) are fundamentally flawed and purposefully misleading.

“CFA’s comprehensive, fact-based analysis stands in stark contrast to the error and bluster we've seen from the Phoenix Center and ITIF,” said Dr. Mark Cooper, Director of Research at CFA and author of the report. CFA’s latest report was filed as an ex parte supplement to the record in several ongoing Federal Communications Commission (FCC) proceedings that are vital to broadband policy and on the agenda for the FCC Open Meeting on January 30, 2014. “The FCC prides itself on being a data-driven organization, and in these proceedings seeks an accurate picture of the status of prices and product offerings in broadband Internet access service to inform sound broadband policy,” Cooper said. “However, there is little factual data to be found in the Phoenix Center/ITIF reports. Indeed, by simply correcting their math, we show that the dominant incumbents actually overcharge customers by about $15 billion per year for wireless service.” “Utilizing data from the New America Foundation (NAF) global survey of rates, terms and conditions of wireline and wireless service, CFA found that U.S. providers charge more, offer slower speeds and, in the case of mobile broadband, have lower caps and more onerous penalties for exceeding those caps than their non-U.S. counterparts,” Cooper added. The report, entitled Abuse of Market Power for Broadband Internet Access Service: Blind Theory and Bonehead Analysis Can’t Hide the Problem, presents evidence of errors in the Phoenix Center and ITIF’s analyses.