Open Technology Institute Examines America's Broadband Challenges

By Joe Rizzo January 15, 2014

A new report was released today that takes a look at reining in the cost of connectivity. I was not surprised to learn that in America we pay higher prices for slower Internet speeds than in other parts of the world. What I was surprised at was the fact that smaller cities around the world have faster speeds than major American cities such as New York and Los Angeles.

A highlight of this report is that “The United States’ collective broadband experience does not measure up to that of other countries. Americans often face higher prices, slower speeds and a frequently frustrating consumer experience overall. A number of these problems persist because of failures to act by policymakers at all levels.”

Last fall, the Open Technology Institute (OTI) released a report entitled, “The Cost of Connectivity 2013.”  This was a survey of consumer broadband pricing data taken from 24 cities around the world. The central take-away from that research is that customers in U.S. cities generally continue to pay higher prices for slower speeds when compared to customers in international cities.

The report took a look at what might be some of the influencing factors. Some of the key contributing factors include the lack of open access policies for broadband infrastructure, the difficulties of interconnection and the ongoing consolidation of spectrum holdings between a few mobile competitors. 

In fact, we have seen this in just the past few weeks. At the beginning of the year we had wheelings and dealings between T-Mobile and Verizon. The companies are swapping certain spectrum licenses amongst themselves. In addition, a couple of days later we saw that AT&T was acquiring AWS spectrum from Aloha Partners.

The original report OTI report from last year found that while last year we witnessed plans and pricing updates, such as T-Mobile’s Un-carrier plan and AT&T’s Next program, very little progress was made with respect to speed, keeping the U.S. behind the rest of the world.

The new report from OTI, “Reining in the Cost of Connectivity” examines America’s broadband challenges. It analyzes a number of factors that have an impact on speeds and prices. The analysis is based on the data that was collected for The Cost of Connectivity 2013.

One thing that the report found was that on the wireless side, U.S. customers pay higher prices for data-only plans and are more likely to face overage fees. In contrast, international customers tend to see lower prices and are more likely to see their speeds reduced when they exceed their data limits rather than the imposition of monetary fees. 

Another finding is that when comparing the top wired speeds available in each city, Chattanooga, TN, and Hong Kong continue to offer the same world-leading gigabit speeds they offered last year, while Seoul, Lafayette, LA, Kansas City, KS, and Kansas City, MO, also joined the top ranks.

Should it be disconcerting that major cities like New York, Washington, D.C. and Los Angeles are not on this list?

If you want to read the rather lengthy report and check out all of the information, you can do so by clicking here.

Edited by Cassandra Tucker

TechZone360 Contributing Writer

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