Q & A
How the FCC's new national broadband plan is expected to affect consumers
Wednesday, March 17, 2010
Among the dozens of policy recommendations in the Federal Communications Commission's national broadband plan, the impact on consumers varies. The following are answers to some of the top questions we've been asked about how the broadband manifesto affects individuals.
Q: What does the plan mean for me today?
A: Short answer, not much. And maybe not even for years. The plan has a long-range goal of connecting the 100 million users who aren't getting broadband today by 2020. And the plan targets low-income urban and rural areas that have been left off the broadband grid. They'll be getting billions of dollars in fat fiber and wireless connections to their communities and $1 billion in subsidies for training and other adoption efforts, if some proposals turn into policy.
Q: So if I live in the suburbs, this doesn't do much for me at all? And will it impact my monthly bill?
A: If the federal government succeeds in introducing more competition into your area -- so that you can opt from more than one cable company and one phone company for broadband service -- then, consumer groups believe, you'll get faster speeds, and prices could go down or at least not be raised as quickly. About 78 percent of U.S. homes have access to only two wireline broadband service providers.
Q: Who is getting left behind when it comes to broadband adoption?
A: The lowest-income groups are lagging, according to Joel Kelsey, policy analyst at Consumers Union. And although studies have shown people aren't adopting service because they don't have access or they feel they don't need broadband, the biggest barrier, he said, is cost.
Q: Will reforming the Universal Service Fund leave rural customers without phone service?
A: No, the USF would support broadband deployment but also continue to support voice services.
Q: How much are people paying for broadband, and are prices going up?
A: The average cost for fixed-wired broadband was $45 a month in 2009, and the average mobile phone subscriber paid $506 a year. That's more than in Britain and Spain.
There is evidence of prices increasing. This month, Comcast raised its monthly broadband prices for the lowest tier of service by $2 a month in New Jersey and parts of Pennsylvania. AT&T is also reportedly increasing prices for some of its DSL subscribers by $3 a month.
Q: Does the FCC tackle prices at all, through caps or other rules?
A: No. The agency only sets the goal of "affordable" broadband services for 100 megabits a second for 100 million homes by 2020.
Q: How will the FCC define what is affordable? And is the goal of 100 megabits a second by 2020 really ambitious enough?
A: One proposal is to gather data by small areas on the prices people are paying for broadband and at what speeds. Remarkably, the FCC doesn't gather that information today, and consumer groups say companies have been loath to give out such information. That information will give regulators a better sense of competition market by market. But what they plan to do with that data is a big question, and companies will be resistant to price caps.