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FCC chairman: ‘A duopoly’ dominates basic Internet service in America

FCC Chairman Tom Wheeler (Brian Fung/The Washington Post)

The nation's top telecom regulator thinks Internet providers can do far better when it comes to offering broadband at competitive prices and speeds.

On Wednesday, Federal Communications Commission chairman Tom Wheeler said increases in demand for high-speed service among consumers and businesses make getting cheap, fast broadband an imperative.

But Wheeler cited a lack of provider choices at higher speeds as a barrier to improving education, health care and the broader economy.

"Meaningful competition for high-speed wired broadband is lacking," Wheeler said. "Americans need more competitive choices for faster and better Internet connections."

The vast majority of consumers — 75 percent — can get access to a basic 4 Mbps Internet connection by choosing among two or more providers, according to federal statistics. But that figure falls off sharply as speeds increase; just a quarter of the country can choose among two or more providers when buying a 25 Mbps connection, which Wheeler said was becoming the new default for many consumers in the Internet age.

"A 25 Mbps connection is fast becoming 'table stakes' in 21st-century communications," said Wheeler, who added that being forced to select between two providers is hardly an ideal choice. "That is what economists call a 'duopoly,' he said.

Having access to more Internet providers — and making it easier to switch services — is part of the FCC's broader goal to promote broadband deployment in the United States. The FCC is exploring whether to raise the minimum definition of broadband to 10 Mbps, nearly double the current official standard of 4 Mbps.

Estimates from the FCC suggest that in a three-person household, a 10 Mbps connection could simultaneously support one person streaming an HD movie, one person engaging in an HD video chat and one person backing up files to the cloud. But many households utilize even more applications and devices at the same time, requiring even more robust connections.

To expand consumer choices, Wheeler vowed to protect competition where it already exists and, more importantly, to create room for competition where it was lacking. Highlighting changes wrought by Google Fiber, Wheeler pointed to the company's efforts to gather information from cities about utility poles and access to them. He emphasized that the FCC would continue extending broadband to rural areas by supporting "whomever steps up to the challenge" — a veiled reference to competitive entities, such as city governments, seeking to challenge large, incumbent ISPs.

Industry insiders, such as AT&T policy advocate Hank Hultquist, said they looked forward to more specifics from the FCC. Others, including public interest advocates, said it was refreshing to see Wheeler acknowledge a lack of competition rather than pretending nothing was wrong.

"It was good to see the chairman look at this in a serious way," said Blair Levin, a former FCC official who oversaw the agency's efforts at writing a national broadband plan. "It's a step forward."