Economics Government Technology

Senators want an FCC probe of “ridiculous” Internet prices & FCC response is preposterous

Stay ahead of the curve... Get top posts first!

Thank you for subscribing!

Get updates on Facebook

The Federal Communications Commission has been implored to probe what Democratic presidential hopeful Sen. Bernie Sanders has called the “ridiculous” prices charged by Internet providers to consumers.

The FCC chairman, Tom Wheeler, said his agency lacks the kind of detailed price data that Sanders and three other Democratic senators asked for in a letter they sent to the FCC last week.

In the letter, Sanders — along with Sens. Elizabeth Warren (Mass.), Ed Markey (Mass.) and Al Franken (Minn.) said low competition and hard-to-understand fees were driving up the cost of Internet access for Americans.

“Lack of choice has resulted in huge price increases and often poor service,” the senators wrote. “There are now de facto communications monopolies throughout the United States.”

“The recent increased concentration in the cable and Internet industries has created a de facto monopoly where substantial price increases have become the norm,” Sanders wrote in a separate press release. “Currently, America ranks 25th worldwide for broadband speed, and we pay more for poorer quality broadband than customers in Slovakia Estonia, South Korea, and the U.K.”

The letter comes as the FCC begins to consider a new merger between Time Warner Cable and Charter Communications, which the senators say would only exacerbate the problem. Recent increases in the price of Time Warner services indicates that the company is already insulated from normal market pressures, the senators say. They cited Time Warner’s modem rental charges increasing by 203 percent since they were introduced in 2012.

The letter reads, “To cite just one example, Time Warner Cable began charging a cable modem rental fee in 2012 of $3.95 a month. TWC then raised the price to $5.99 a month in 2013. Today it charges $8 a month, a 203 percent increase in three years’ time, in addition to monthly broadband charges.

To address the issue, they asked the FCC to investigate how much cable and Internet services go for in various markets around the country and requested the agency break down the numbers by speed tier, state, provider and urban and rural categories.

The FCC will have a hard time fulfilling the request of the senators. That’s because the agency collects some data on cable pricing, but not at the level of detail the senators asked for. And it doesn’t collect any information whatsoever on broadband pricing.

“The commission made a decision before I got there not to include price questions” in its periodic surveys of Internet providers, Wheeler told reporters Thursday. “We’re going to respond with the information we have.”

The FCC publishes semi-annual reports on the state of Internet access in the United States based on that information, going over things like how many Americans have which speeds down to the census tract and county level. You can find the latest reports here.

Telecom policy analysts say that what the FCC might do is simply send one of these prepared reports to Congress rather than supply the raw data, which would be difficult and expensive to pass along. This will still not adequately respond to the senators’ request.

Not only are Internet prices ridiculous, but also ridiculous is the fact that the FCC cannot properly and fully respond to this very reasonable request made by the senators.

Want our best on Facebook?

Facebook comments

“Senators want an FCC probe of “ridiculous” Internet prices & FCC response is preposterous”