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Pricing Report From Berkman Klein Center: Municipal Broadband Subscribers Get Better Rates

Date: 10 Jan 2018 | posted in: MuniNetworks | 0 Facebooktwitterredditmail

The FCC collects data from Internet Service Providers that reflects census blocks where they offer service to at least one premise. Currently, the Commission does not collect information about rates subscribers pay. A new report from the Berkman Klein Center dives into prices subscribers pay and also looks at trends from national companies as well as local publicly owned networks. The report, Community-Owned Fiber Networks: Value Leaders in America, supports what we’ve always found — that publicly owned networks offer the best all around value for the communities that make the investment.

Download and read the full report here.

In the Abstract, authors David Talbot, Kira Hessekiel, and Danielle Kehl describe their approach:

We collected advertised prices for residential data plans offered by 40 community-owned (typically municipally owned) Internet service providers (ISPs) that offer fiber-to-the-home (FTTH) service. We then identified the least-expensive service that meets the federal definition of broadband—at least 25 Mbps download and 3 Mbps upload—and compared advertised prices to those of private competitors in the same markets. We found that most community-owned FTTH networks charged less and offered prices that were clear and unchanging, whereas private ISPs typically charged initial low promotional or “teaser” rates that later sharply rose, usually after 12 months. We were able to make comparisons in 27 communities. We found that in 23 cases, the community-owned FTTH providers’ pricing was lower when averaged over four years. (Using a three year-average changed this fraction to 22 out of 27.) In the other 13 communities, comparisons were not possible, either because the private providers’ website terms of service deterred or prohibited data collection or because no competitor offered service that qualified as broadband. We also made the incidental finding that Comcast offered different prices and terms for the same service in different regions.

The report offers frank visual comparisons of the authors’ findings. Most of the comparisons show big national providers advertising offering service in the markets, but there are a few places where small independents advertise services similar to that offered by the publicly owned network.

Comcast Chaos

The authors investigation discovered support for what many Comcast subscribers have complained about — the cable provider’s rates and terms are far from consistent across the country. They discovered:

Presenting prices as a range – Comcast sometimes defined a monthly price as a range (between $2 and nearly $15 monthly), leaving it unclear what consumers would be paying.

Varying teaser rates – Comcast employed different teaser rate progressions, including a price increase after 12 months and two price increases over a period of three years.

Discounts for paperless billing and automatic payments – In four communities, the promotional price Comcast advertised in bold was only available to customers who allowed Comcast to automatically charge monthly payments to their credit card or bank. Prices were $10 higher for customers who did not agree, a practice that penalizes consumers without credit cards or bank accounts or who are reluctant to provide permission.

Service with or without a contract – In Issaquah, WA, and Longmont, CO, Comcast offered consumers a choice of taking service through a 12-month contract or doing so without a contract (and its potential cancellation fees) for $10 more a month. As a result, anyone who chose the plan without a contract but didn’t end up canceling within the first year would spend an additional $120.


logo-berkman-klein.pngThe report offers several suggestions, including that the FCC alter its data collection method from census block level to street-address level. Examining connectivity through a tighter lens would provide a more accurate view of the condition of broadband access in the U.S. ISPs should also provide information on prices that subscribers pay, which the FCC does not presently collect and state laws that restrict local telecommunications authority are not productive in our nationwide goal to bring broadband to every address. Publicly owned networks need more support, including better research:

Our findings, though limited in scope, point to the benefits of community fiber networks in providing broadband to Americans at prices that are more affordable. The national interest would be served by much deeper data collection and study.

Download and read the full report here.

Image of the computer by farabudi86 courtesy of pixaby.

This article was originally published on ILSR’s MuniNetworks.org. Read the original here.

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Lisa Gonzalez

Lisa Gonzalez researched and reported on telecommunications and municipal networks' impact on life at the local level. Lisa also wrote for MuniNetworks.org and produced ILSR's Broadband Bits podcast.