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Infrastructure, Internet

U.S. Internet broadband speed and pricing: Data, research and comparisons



Internet Service Providers (ISPs) provide broadband service in a wide range of speeds to consumers around the United States. For those looking to analyze the value of the different offers, there are new sources for helpful data and comparative insights.

As the Pew Internet & American Life Project’s “Home Broadband 2013” suggests, high-speed access in the United States continues to increase. In April 2005, 55% of U.S. households had the option of being connected to broadband service; the rate rose to 70% by May 2013. A variety of “digital divide” issues remain, however. A June 2013 U.S. Commerce Department report, “Exploring the Digital Nation,” provides detail. Deeper issues such as net neutrality are also at play.

Broadband speeds, also known as “throughput,” express the amount of digital information that can be sent or received per second. Having a higher rate is particularly important when complex, data-intensive tasks are involved, such as streaming video. The Federal Communications Commission reported in February 2013 that the average speed tier was 15.6 megabits per second (mbps), although more than half of all consumers fall in the rate of two- to six-megabits per second. Plans for speeds as high as 500 mbps download and 100 mbps upload are now being offered through Verizon’s FiOS Quantum Internet service, although these are priced at more than $300 a month. (Download and upload speeds differ for complicated reasons.) As commentators have pointed out, participation in the 21st-century economy, which frequently requires teleconferencing, exchanging large documents and other functions involving significant volumes of data, is in many ways predicated on fast broadband speeds.

One continuing area of research and controversy is how ISP claims about speed match up with reality. Sites such as Speedtest.net can help provide consumers an independent gauge of performance. (Also see the M-Lab consortium, as well as the FCC’s Speed Test app for mobile testing; for visualizing these dynamics, see Akamai’s real-time Web monitor.) A 2013 paper by Robert Faris and Rebekah Heacock for Harvard’s Berkman Center on Internet and Society, “Measuring Internet Activity: A (Selective) Review of Methods and Metrics,” explores infrastructure and access questions, as well as wider problems with producing various digital measurements. “The pricing of broadband products can be hard to isolate when Internet service is sold as a part of a bundle that includes telephone and television,” the authors write. “Installation, equipment rental, and usage charges may or may not be explicit, and the presence of usage caps, which vary substantially across different providers and locations, further muddies the water. Moreover, the tremendous variation in connectivity speeds makes producing direct comparisons difficult.”

What is clearer is the degree to which the United States is falling behind globally in broadband speed and value. An October 2013 report from the New America Foundation’s Open Technology Institute, “The Cost of Connectivity 2013,” looks at speed, performance and costs across 22 cities worldwide. It also includes rich comparative data on mobile device plans. The researchers — Hibah Hussain, Danielle Kehl, Patrick Lucey and Nick Russo — point out that a few U.S. cities such as Chattanooga, Tenn. and Kansas City, MO (where Google Fiber was deployed), compete with world leaders such as Tokyo, Seoul and Hong Kong. These are all considered “gigabit” cities, where speeds exceed 1,000 mbps.

In general, however, the study’s findings are not positive for the United States. These include:

  • U.S. cities continue to see higher prices for lower speeds. While many municipalities around the world saw improvements over the period 2012-2013, in American cities broadband speeds “did not change significantly.” Over the past year Comcast plans did become slightly less expensive, and the company increased speeds in some U.S. regions.
  • International comparisons highlight other domestic shortcomings: “In the U.S., for example, the best deal for a 150 mbps home broadband connection from cable and phone companies is $130/month, offered by Verizon FiOS. By contrast, the international cities we surveyed offer comparable speeds for less than $80/month, with most coming in at about $50/month.”
  • The few truly high-speed options in the United States are most notable for their elevated prices: “In Amsterdam, a symmetrical 500 mbps broadband plan (with 500 mbps download and upload speeds) costs just over $86.” The cost for Verizon’s new Quantum service, which can reach 500 mbps, far exceeds this amount.
  • For plans involving Internet, telephone and television — sometimes referred to as “triple play” packages — U.S. providers continue to lag: “The top fifteen providers are still international, while U.S. carriers come in at the 32nd place on the list. In last year’s report, the U.S. came in 30th place.”

“Many American consumers take high prices and slow speeds to be a given, but our data demonstrates that it is possible to have faster, more affordable connectivity in cities of comparable density and size,” the authors conclude. “To an extent, the data speaks for itself: Whether consumers are interested in triple-play packages or mobile broadband plans, they pay more money for lower speeds in the United States. Our data also shows that the most affordable and fast connections are available in markets where consumers can choose between at least three competitive service providers.”

The Organization for Economic Cooperation and Development (OECD) also curates comparative data on its 34 member countries and their relative progress on broadband issues.

Keywords: telecommunications

    Writer: | Last updated: November 18, 2013

    Citation: Hussain, Hibah; Kehl, Danielle; Lucey, Patrick; Russo, Nick. "The Cost of Connectivity 2013," New America Foundation, October 2013.

    1 comment

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    Anonymous Dec 3, 2013 11:17

    This study has generated some highly critical reviews. Here is one: “New America Foundation Misinterprets International Data (Again)…”. See http://phoenix-center.org/blog/archives/1257. Check the Benton Foundation’s Communications-Related Headlines for others. See http://benton.org/headlines.

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