Are rural Americans getting ripped off on home internet?

A big disparity across North America is access to reliable, fast internet connection. In the United States, tens of millions of consumers live in AT&T and Verizon serviced territories where they “can only buy slow DSL Internet from the companies, yet they often have to pay the same price as fiber customers who get some of the fastest broadband speeds,” says Ars Technica. This sad fact was unveiled by a new white paper written by broadband advocacy group, the National Digital Inclusion Alliance (NDIA).

According to the white paper, “AT&T has been charging $60 a month to DSL customers for service between 6 and 10Mbps downstream and 0.6Mbps to 1Mbps upstream. AT&T also charges $60 a month for 50Mbps and 75Mbps download tiers and even for fiber service with symmetrical upload and download speeds of 100Mbps. These are the regular rates after first-year discounts end, before any extra fees and taxes.”

Likewise, Verizon “charges $65 a month for 100Mbps fiber service (including a $10 router charge), and $63 or $64 a month for DSL service that provides download speeds between 1.5Mbps and 15Mbps.”

More of less, if you’re living outside of fiber connected areas, where you have to use DSL service, then you are being sold a slower, less reliable product for the same price as a better product that you cannot access.

The NDIA calls this practice “tier flattening.” Tier flattening impacts “both urban and rural customers who live in areas where AT&T and Verizon haven’t upgraded networks because they face no competition, or because the upgrades wouldn’t result in higher profits.”

The NDIA points out that this practice “imposes higher rates on millions of urban households who are relegated to slow ADSL technology by AT&T’s documented ‘digital redlining’ of lower-income neighborhoods as well as Verizon’s refusal to deploy broadband upgrades in some entire cities like Baltimore and Buffalo” and “victimizes millions of underserved households in the two companies’ rural service areas.”

Although AT&T did not dispute these facts, it told Ars Technica that the white paper was “misleading.” It said, “Attempting to assess Internet service offerings by only looking at standard rates does not give a complete picture; the Internet service market is more competitive than ever and most customers make their purchases at bundled and discounted rates. The claims made in this report are completely misleading and do not reflect all options available to consumers.”

The carrier also explained that DSL service has “higher costs of maintenance and fewer subscribers.”

Whether or not you agree with the carriers’ pricing models, delivering affordable internet to underserved areas continues to be a problem. As CNET points out, “Nearly 24 million Americans do not have access to broadband with download speeds of at least 25 Mbps and uploads of 3 Mbps.”

Source: $50 a month for 1Mbps: How AT&T and Verizon rip off DSL customers – arstechnica.com
Published: August 2, 2018