Americans Pay More for Less Bandwidth. The Open Technology Institute at the New American Foundation recently released its third annual report where it compared US broadband speeds and prices in 24 US cities and in cities around the world. This report shows that speeds have increased in US cities since 2012, but on a cost per megabit delivered most US cities still fall to the bottom of the comparative list. The broadband winner is Seoul where a gigabit of data costs $30 per month followed by Hong Kong and Tokyo at $37 and $39. Contrast this to Verizon FiOS where 500 Mbps costs $300. Very few places in the US outside of Google, some municipalities and some Independent telcos offer an affordable gigabit service.
One of the more interesting comparisons made by the report is comparing the cost for buying 25 Mbps connectivity. The most affordable place for this was London at $24 followed Seoul, Paris, Tokyo, Copenhagen and Prague. The cheapest US City is Kansas City at $41, due to competition with Google. The US cities with Verizon FioS came in around $50. The lowest price in a US City not served by a fiber provider is San Francisco at $58 per month. Most US cities are over well over $60. Not surprisingly, the larger municipal networks like Chattanooga and Lafayette LA are at the head of the US affordability list after Google. The US is also the only country that charges monthly fees for a cable modem and the cable modem customer spends over $100 per year for the cable modem.
The report went on to note that 75% of US customers who can get 25 Mbps service have only one service option. The report concluded that around the world that one thing that holds down landline data prices is significant competition with cellular data. For example, in much of the rest of the world the monthly data caps on cellular phone plans are up to 40 times higher than they are in the US. But our low data caps and the relatively slow speeds of our cellular data networks means that cellular is not a good substitute here for a landline connection.
Customers Continue to Rate Large ISPs Poorly. The results of the annual American Customer Service Satisfaction Survey was recently released and showed that satisfaction with large ISPs is still quite low and is getting worse. This is an annual poll of 70,000 consumers and asks about a wide swath of large businesses. The composite satisfaction with all large ISPs was at 63 on a scale of 100, down from 65 a year ago, and which puts the ISPs at the bottom of the list of all industries. Within those numbers, Verizon FiOS held steady at a rating of 71. Time Warner did the worst dropping from a rating of 63 in 2013 down to 54 this year. Comcast was not far behind dropping from 62 to 57. Century link is the only ISP that improved slightly and went from 64 to 65. Both Cox and Charter dropped 4 points in the last year.
Consumers felt slightly better about their cable TV service and that got a composite rating of 65 compared to the 63 for broadband, But that rating is down from a 68 a year ago. The ratings were down for every major cable provider compared to 2013. The highest ratings for cable were 69 by DirectTV and AT&T U-verse, while the lowest rating was again Time Warner with a 56.
What is probably the most disheartening about these ratings is that they are dropping year over year. Consumers already rate ISPs and cable companies at the bottom of their satisfaction list across all industries. One would think that would prompt them to improve. And perhaps to some degree they are improving some since speeds are slowly getting faster. But overall satisfaction continues to drop. One might think that price has a lot to do with this, particularly for the cable TV business where there are hefty rate increases each year. But prices have also started to creep up for data and several of the major ISPs are now planning on raising data rates a little each year.
AT&T U-verse Told to Change Advertising. The national Advertising Division (NAD) told AT&T to modify the way they advertise U-Verse data speeds. AT&T has widely advertised the product as offering up to 45 Mbps and NAB found that in many markets this speeds was either not available or not widely enough available to justify the claim. NAB is a division of the Council of Better Business Bureaus and monitors national advertising claims of all sorts. The NAD recommendations are not mandatory, but since big companies participate in the Better Business Bureau they generally take heed of NAD findings. NAD has made similar findings against CenturyLink in recent years.
I guess it’s really not surprising that customers rate the large ISPs so poorly when you consider some of their practices. Many of them use poorly trained contract installers who don’t put a good face on their company. Many of these companies are notorious for not showing up for scheduled appointments, which is something that a lot of consumers never get over. This year we heard several recordings from Comcast reps who would not let customers drop service. And there is the annual and persistent rate increases.