Press Release
FCC Must Tackle Broadband Competition Head On
Contact: Timothy Karr, 201-533-8838
WASHINGTON -- Today, just as the Federal Communications Commission is rolling out parts of the National Broadband Plan to bring broadband to more low-income Americans, cable giant Comcast is reportedly raising its rates for Internet service -- including its most basic, lowest priced service.
Free Press Policy Director Ben Scott made the following statement:
"It is a rich irony that the latest round of Comcast price hikes is reported on the same day that the FCC is focused on affordable broadband service to close the digital divide. Almost no one disagrees that the FCC’s proposals to increase broadband adoption are very important. But they must be paired with a strong competition policy to drive down constantly increasing prices or else they will struggle to succeed. Nothing at today’s FCC event on adoption drew an explicit connection between affordability, adoption and price competition.
"Comcast is typical of the nation's broadband giants -- their own costs are declining, yet prices keep rising. This combination of rising prices along with declining costs is a strong indication the market is broken. The public will take the industry’s rhetoric about closing the digital divide more seriously when prices for entry-level services are dropped and kept low. Comcast’s price increases, along with others recently announced by Internet Service Providers like AT&T, should make it clear that the incumbents have no intention of lowering their prices and attracting more low-income users. Price competition is simply not in their business model.
"While several elements of the National Broadband Plan announced today are admirable, what we have seen so far will not directly confront America's broadband competition problem. Chairman Genachowski recently indicated that he is ‘hopeful’ that the elusive ‘third-pipe’ wireless broadband platform will eventually inject some competition into our duopoly broadband market. But this was the policy of both the Powell and Martin FCCs, and the failure of this policy is exactly why Congress charged the FCC with crafting a broadband plan to bring robust, affordable services to all Americans. Subsidies for low-income households certainly should be part of the solution, as should innovative use of wireless assets -- but we need to make the market work for consumers. Consumers need price relief, and are asking that the FCC do something bold and decisive to promote meaningful competition."
Free Press Policy Director Ben Scott made the following statement:
"It is a rich irony that the latest round of Comcast price hikes is reported on the same day that the FCC is focused on affordable broadband service to close the digital divide. Almost no one disagrees that the FCC’s proposals to increase broadband adoption are very important. But they must be paired with a strong competition policy to drive down constantly increasing prices or else they will struggle to succeed. Nothing at today’s FCC event on adoption drew an explicit connection between affordability, adoption and price competition.
"Comcast is typical of the nation's broadband giants -- their own costs are declining, yet prices keep rising. This combination of rising prices along with declining costs is a strong indication the market is broken. The public will take the industry’s rhetoric about closing the digital divide more seriously when prices for entry-level services are dropped and kept low. Comcast’s price increases, along with others recently announced by Internet Service Providers like AT&T, should make it clear that the incumbents have no intention of lowering their prices and attracting more low-income users. Price competition is simply not in their business model.
"While several elements of the National Broadband Plan announced today are admirable, what we have seen so far will not directly confront America's broadband competition problem. Chairman Genachowski recently indicated that he is ‘hopeful’ that the elusive ‘third-pipe’ wireless broadband platform will eventually inject some competition into our duopoly broadband market. But this was the policy of both the Powell and Martin FCCs, and the failure of this policy is exactly why Congress charged the FCC with crafting a broadband plan to bring robust, affordable services to all Americans. Subsidies for low-income households certainly should be part of the solution, as should innovative use of wireless assets -- but we need to make the market work for consumers. Consumers need price relief, and are asking that the FCC do something bold and decisive to promote meaningful competition."
