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Broadband Speed: When Ignorance is Costly

by: Joel Gurin

June 2, 2010 - 10:55 AM

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For several months, the FCC has been working to help consumers get more information about the communications services they buy. Our Notice of Inquiry last August asked how we can help consumers make more informed choices about phone, television, and broadband services. That Notice brought out a lot of good ideas from public interest groups, the communications industries, and consumers themselves.

This year, we've followed up with a number of consumer initiatives coordinated by the FCC's Consumer Task Force. We've written letters to wireless carriers about their early termination fees, taken on the problem of bill shock, and started to look at broadband speed.

Today, we're releasing the results of a national survey that shows just how large the information gap is when it comes to broadband. According to this survey, fully 80 percent of Americans with broadband at home don't know what speed they're getting. This survey was done through a major firm and drew on a national sample of three thousand consumers.

This ignorance can be costly: The difference between a low-cost, slower broadband plan and a high-speed, more expensive one can be hundreds of dollars a year. In order to get the best service at the best value, consumers first need to understand what broadband speed they need for the applications they want to run. In addition, broadband service providers need to advertise their speeds in clear terms, and consumers need to be assured that the speeds they actually receive match what's advertised. While broadband providers now advertise "blazing fast" internet service at "up to" a certain speed, that's not specific enough to help consumers make informed choices.

Today, we're taking two steps to help both consumers and service providers learn more about how broadband speed is being delivered:

It will take the FCC, public interest groups, and broadband service providers working together to help consumers understand their "need for speed." The Cable Television Association, and several other broadband service providers, have already supported the FCC's efforts to develop scientific tests of home broadband speed. We're confident that we can all work together in the months ahead to turn consumer ignorance into consumer information.

[Cross-posted from Blogband]

Updated: April 16, 2012 - 12:10 PM
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