My Internet Provider Is a Monopoly and Yours Probably Is Too. Here's What It Means For Your Broadband Bill

CNET

4 days ago

You know the drill. It's time to shop for home internet, but you only have one or two options, and you're not sure how to decide which one is better. You've heard the woes from friends who signed up with Spectrum and were surprised by two price increases within the same year -- and as Spectrum is one of the biggest internet providers in the country (and may soon be the biggest cable provider in the country), there's a good chance that Spectrum is one of the two options available at your address. So what can you do?
First, let's do a little research
If you type your address into the Federal Communication Commission's broadband map, you can pull up all of the internet providers that will service your address. If you live in an urban area, you may have as many as seven options, each an alternative to Spectrum if that's a provider you're trying to avoid. But let's say you're trying to stick to a high-speed internet option. Maybe you have a smart TV you use for streaming in crisp 4K, a roommate who games religiously in their room or you're a student who uses Zoom pretty regularly. Whatever the reason, a good rule of thumb is to aim for speeds of 300 megabits per second or higher for average internet use with multiple devices in the home.
You can use the FCC broadband map to find a list of internet providers that service your address.
FCC
The FCC defines "broadband" as an internet connection with speeds of 100Mbps down and 20Mbps up. Using that definition, go back to the FCC broadband map and rule out each provider with advertised speeds of 100Mbps or less. Why? Even though an ISP advertises that speed, you probably won't get it consistently because of how your router and Wi-Fi work.
According to the FCC, there are only seven internet providers available at my address. If I eliminate ISPs with speeds of 300Mbps or lower, there are only two.
FCC
For most people, at this stage in internet shopping, there are only one to three decent options left and if one of them isn't Spectrum, it's most likely AT&T, Cox, T-Mobile Home Internet or Xfinity.
While I don't personally have anything against Spectrum (and CNET ranks it as one of the better cable ISPs out there), some people do. The leading cause of those frustrations is usually outages or price increases. It's frustrating not only because your bill increases while your speeds remain the same but also because not having another internet option means you can't switch.
Locating local internet providers
At this point, your head is probably spinning. Why is shopping for internet providers such a headache? Will those other internet options be any good? Why can't you get more than one decent option at your address?
'According to the New America Foundation, Americans pay the most for broadband [among 38 democratic nations].'
Christopher Ali, professor of telecommunications at Penn State University
Internet monopolies are far too common in the broadband industry
Over a third of Americans only have access to one or no internet provider. According to data from the Institute for Local Self-Reliance, approximately 83 million Americans have internet access through just one provider.
Overall, the American broadband industry is dominated by a handful of ISPs with broad footprints: Only six ISPs cover 98% of the mobile internet market, and recent industry changes will make that number even smaller.
While Xfinity currently ranks as the country's largest cable internet provider, Spectrum's recent acquisition of Cox will make Spectrum the country's biggest cable provider if the merger is approved.
Similarly, AT&T recently announced plans to buy 95% of Lumen's Quantum Fiber and Verizon was recently approved by the FCC to acquire Frontier Communications in a $20 billion deal. The industry is consolidating -- and while your broadband bill may not immediately (or ever) change, that still means fewer choices for consumers when it comes to internet.
Various factors, including geographically diverse terrain, high infrastructure costs and the daunting task of competing with prices from a much bigger ISP, can make it costly for smaller businesses to get a foot in the door without significant funding.
"Because of the way that we classify broadband service providers, the FCC has very little authority over prices, which means that [ISPs] can pretty much do whatever they want," Christopher Ali, a telecommunications professor at Penn State, told CNET.
Because you likely have only one or two internet options at your address, your internet provider can keep inflating your monthly bill, and you can't really do anything about it.
Just 10 years ago, our definition of broadband vastly differed from the FCC's definition today (it was previously a mere 4Mbps down and 1Mbps up). Our conversations about home internet needing to be more accessible, affordable and sustainably fast for average household needs are a relatively recent development.
"The amount of money the average American is spending [on internet] relative to their income is about the same [compared to 10 years ago]," said Blair Levin, a policy analyst from New Street Research and former executive director at the FCC. "In that sense, we have a much faster, better product at about the same price point. Sure, you could say that's good. Does that mean it's affordable? Not for a lot of Americans it is not affordable and affordability is a key problem."
Although there are thousands of local internet providers, our options often boil down to one or two of the country's ISP giants. Admittedly, CNET often reviews those top providers and may recommend them as viable internet options because those ISP giants aren't necessarily always bad home internet options. They typically offer an efficient cost per Mbps compared with plans from local ISPs, often DSL or fixed wireless options with slower speeds targeted to rural homes.
In rural areas that may not have a big or local ISP presence, internet options are even more limited, and people usually have to fall back on the slow speeds and high costs of satellite internet. Although satellite internet offers extensive availability and has proven an invaluable internet option in rural areas, it tends to average less than 100Mbps in download speeds, not quite fast enough for average to above-average internet use.
According to data from the FCC, Xfinity (red) and Spectrum (purple) are the two largest cable internet providers in the country.
FCC
Although competition among ISPs is often limited, there are pockets of regions where competition -- and fast, cost-efficient internet options -- thrive. Wireless internet providers, specifically, have a strong presence in rural areas, which are harder to reach with wired internet services.
"There are about 1,500 wireless internet service providers in America, largely in rural, under-resourced and Tribal parts of the country," Mike Wendy, the communications director of WISPA, the Association for Broadband Without Boundaries, told me in an email. "They serve about 10 million Americans through primarily fixed wireless access."
In other cases, municipal broadband networks (such as the community-owned fiber networks in Wilson, North Carolina, or Chattanooga, Tennessee) and public middle-mile networks offer much faster speeds for lower prices than a private-owned ISP.
Still, those success stories aren't ubiquitous, effectively creating what Ali calls a "Swiss cheese pattern of broadband availability" throughout the country. All too often, people face high price increases, limited high-speed options and inconsistent connectivity with home internet. Even in urban areas, which typically have higher concentrations of internet serviceability, some low-income neighborhoods may see much slower speeds and fewer options at their address than a higher-income neighborhood across town.
A study from the Markup and the Associated Press in 2022 zeroed in on the trend of inequitable internet access across neighborhoods with marginalized or low-income communities, raising questions about "digital redlining" by ISPs.
Why the difference in the US?
You may find it surprising that the high cost of the internet in the US isn't necessarily replicated in other countries. According to a study by the New America Foundation, US consumers pay the highest average costs for broadband compared across all studied regions.
The average cost of internet service in the UK sits at around £27 ($34) a month, while the US averages $63 in monthly internet costs -- not including hidden fees, equipment costs and those yearly price hikes.
Some researchers point to the concentration of US markets compared to the UK, noting that the concentrated telecommunication industry warrants high internet costs and low capital expenditures from both a consumer and investor perspective. Others point to the tendency of US policy to favor larger ISPs, limiting competition and driving up prices.
'According to the New America Foundation, Americans pay the most for broadband in any country in the OECD," Ali told CNET. "We're averaging somewhere between $74 and $84 a month -- and there is no technological reason why costs are this high. Zero. It is entirely price-gouging.'
The size of internet companies such as AT&T, Google, Verizon and T-Mobile is staggering when you consider not only how sizable their footprints are but also how much of the infrastructure (from undersea cables to vast middle-mile fiber networks) they own. Although there are countless other local providers, many have to pay network fees to larger providers to use parts of the "middle mile" for internet services.
Plus, it's often easier for those bigger companies to buy out another company and merge their networks than to build out a new network. For example, Verizon bought Frontier Fiber early this year in an attempt to expand its Verizon Fios fiber internet brand. Brightspeed edged into the playing field by buying parts of Lumen's CenturyLink DSL network in 2022, and Charter (Spectrum) bought Time Warner Cable in 2016 -- effectively establishing the company's footing as a top cable internet provider.
Fixed wireless internet services might make a difference
So far, we've mostly discussed wired internet services, which are tricky networks to establish because of zoning, equipment and labor costs. What about other internet connection types, such as satellite or 5G home internet? Although a fixed wireless internet service is generally touted as a solution to broadband accessibility because it's easier to establish than a wired network, only a handful of big companies dominate the fixed wireless internet market, namely, Starlink, T-Mobile and Verizon.
Starlink, which edged into the satellite internet market in 2020, established itself as a top name in satellite internet by deploying roughly 7,000 low-Earth-orbit satellites and offering speeds up to 220Mbps and relatively low latency (the time it takes for data to get to the server and back). In contrast, competitors Hughesnet and Viasat fall behind with speeds that top out at 100 and 150Mbps, respectively.
T-Mobile presents a popular alternative to rural internet with its network of high-powered cell sites and licensed 5G frequencies. To date, T-Mobile has the largest footprint of any single US internet provider, thanks to the reach of those frequencies.
The catch? Starlink costs roughly $120 a month, not including the hefty up-front cost of satellite equipment, which runs $349 for the basic package. By comparison, T-Mobile offers a much more competitive price. For $50 monthly, you can get speeds around 87 to 318Mbps. There's no equipment rental charge, just the $35 activation fee you pay when you start service.
But although Starlink and T-Mobile are popular choices for people with limited internet access, neither provider can offer a consistent speed of 300Mbps over a fixed wireless internet connection, which is why, although neither provider enforces a data cap, your speeds likely will be throttled during peak congestion periods. You won't see the quick, consistent gigabit speeds that you'd get from a cable or fiber internet provider (or at least, not yet). Additionally, more than 1 million people are on a waitlist for T-Mobile services, delayed because of network capacity.
The internet services offered by Starlink and T-Mobile are an attractive alternative to solving internet accessibility in underserved or hard-to-reach areas, but the quality of those internet connections and the affordability of monthly prices, equipment and additional fees, are an imperative consideration.
What does this all mean for you and me?
So, what's being done to ease internet connectivity and affordability? How can we ensure that people have more than one or two options for internet service and that the costs of that internet stay low?
No one really has the answers yet. Since the ILSR published its findings on telecom and cable internet monopolies, Congress portioned $90 billion toward bridging the digital divide. That money was split among various groups, including the Tribal Connectivity Program, but most of it has been funneled into the Broadband Equity Access and Deployment Program (BEAD) -- the largest investment that the federal government has made in internet accessibility.
The Affordable Connectivity Program, which offered more than 23 million low-income Americans a monthly discount from $30 to $75 monthly, was perhaps the most significant attempt at ensuring accessible, high-speed internet nationwide. After the ACP ended in May 2024, policymakers disagreed over how to ensure that ISPs offer low-cost plans to their customers.
So far, BEAD funding has become tangled with competing interests about how best to use it -- including disagreements with the organization tasked with administering BEAD funding, the National Telecommunications and Information Administration.
The NTIA set guidelines for ensuring a low-cost plan with a baseline cost of $30 monthly, but many states have already planned a price increase for that baseline.
Despite that, the plight of internet monopolies, high monthly internet costs and lack of adequate connectivity still hang in the balance. In the meantime, the most you can do to trim down your monthly internet costs is to either reduce your monthly data consumption or look for a cheaper internet provider.