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Price of the Pipe

Comparing the Price of Broadband Service Around the Globe
April 15, 2010 |

The speed and price of a broadband connection are two important details about a broadband service that vary greatly between different countries. In comparing prices and speeds of broadband services around the globe, we find that the United States is among the most expensive and slowest of the countries surveyed in this report. Price is one of the main barriers to adoption,[1] and prices for broadband in the U.S. are on the rise.[2] Major steps need to be taken to bridge the speed and price disparities separating the U.S. from other industrialized countries.

   Broadband Service Speed and Price (High Tier)

Country

Downstream

Upstream

Price

Canada[3]

25

7

$67

Denmark[4]

40

2

$72

Finland[5]

24            

1

$67

Hong Kong[6]

100

Unlisted

$38

Japan[7]

200

100

$60

South Korea[8]

100

Unlisted

$29

Sweden[9]

100

100

$46

Taiwan[10]

100

5

$37

U.K.[11]

50

Unlisted

$57

United States[12]

50

20

$145

For this survey we compare price and speeds of both the fastest speeds available (high tier) for residential service, as well as the service equal to or greater than 1 megabit per second (Mbps) or more (low tier), for 10 industrialized nations. The services listed are the cheapest regular monthly rate for broadband, unbundled from other services such as telephone and voice (when available.) Because different speeds are available in the nations surveyed, price (USD) per megabit is used to provide a more direct comparison. Upstream speeds are listed when available but only downstream speeds are compared.

The United States is the most expensive of the ten countries surveyed for high tier broadband service. The broadband services available internationally include prices as low as $26 a month for a 100 Mbps connection in South Korea and speeds as fast as a 200 Mbps connection in Japan for $60 a month. While broadband service with speeds of 100 Mbps is available in Taiwan for $37 a month, $38 a month in Hong Kong, and $46 a month in Sweden, broadband is half the speed for over three times the price in the U.S. where 50 Mbps service costs $145 a month. Other countries surveyed joining the U.S. in the slower half of high tier speeds cost less than half the price. For example, 24 Mbps broadband service is available in Finland for $67 a month, 25 Mbps broadband is available in Canada for $67 a month, 40 Mbps broadband is available in Denmark for $72 a month, and 50 Mbps broadband service is available for $57 a month in the U.K.

Comparing the price per megabit ($/Mb) demonstrates how much more expensive broadband is in the United States. Broadband service of 100 Mbps costs $0.29/Mb in South Korea, $0.37/Mb in Taiwan, $0.38 in Hong Kong, and $0.46/Mb in Sweden. In comparison, 50 Mbps service in the U.S. is several times more expensive at $2.90/Mb. In the U.K. a 50 Mbps connection is available for $1.14/Mb, less than half the price of the same speed in the U.S. Canada and Finland are similar to the U.S. with broadband service for $2.68/Mb and $2.79, respectively, but all three are more expensive every other country surveyed. The next most expensive country is Denmark where broadband service is considerably less at $1.80/Mb. In contrast, broadband service of 200 Mbps is available for $.30/Mb in Japan.

   Broadband Service Speed and Price (Low Tier)


Country

Downstream

Upstream

Price

Canada[13]

2

800 Kbps

$31

Denmark[14]

2

512 Kbps

$30

Finland[15]

1

512 Kbps

$36

Hong Kong[16]

1.5

Unlisted

$13

Japan[17]

1

512 Kbps

$34

South Korea[18]

8

640 Kbps

$26

Sweden[19]

1

1

$19

Taiwan[20]

3

768 Kbps

$14

U.K.[21]

10

Unlisted

$30

United States[22]

1

1

$35

When comparing the low tier broadband service offerings of other countries the United States fairs slightly better with prices closer to the middle of the pack but often for slower speeds. While 10 Mbps broadband service is available for $30 a month in the U.K. and an 8 Mbps connection costs $26 a month in South Korea, in the U.S. slower service of 1 Mbps is considerable more expensive at $35 a month. The same speed of 1 Mbps is available for a similar monthly rate in Japan ($34) and Finland ($36) these rates are much higher than Sweden where 1 Mbps broadband service is available for only $19 a month. Several countries have faster speeds available for much expensive rates than the U.S. For example 1.5 Mbps broadband service costs $13 a month in Hong Kong and a 2 Mbps connection is available for $31 a month in Canada or $30 a month in Denmark. 3 Mbps service in Taiwan costs only $14 a month.

The U.S. is among the most expensive of the countries surveyed when comparing the price per megabit for low tier broadband service. Broadband service of 1 Mbps is available in Japan for $34/Mb, Finland for $36/Mb and the U.S. for $35/Mb, but all other countries surveyed were considerably less expensive. For example, 1 Mbps broadband service in Sweden costs $19/Mb and 2 Mbps broadband service in Denmark and Canada is less than half the price per megabit of the U.S. at $15.00/Mb and $15.50/Mb, respectively. Less expensive still is Hong Kong, where 1.5 Mbps broadband service is $8.67/Mb, Taiwan where 3 Mbps broadband service costs $4.67/Mb, and South Korea where an 8 Mbps broadband service is available for $3.25/Mb. The U.K. has the least expensive and fastest low tier broadband service: a 10 Mbps connection is $3.00/Mb.

Lack of competition is a major factor influencing the higher prices and slower speeds found in the U.S. In the National Broadband Plan the Federal Communications Commission (FCC) notes that 96% of households in America have access to 2 or fewer providers,[23] and prices are higher when only one or two providers are available.[24] An FCC study found that “non-adopters concerned with cost would be willing to pay, on average, $25 per month for broadband,”[25] a rate that is available abroad but the current low tier broadband available in the U.S. unbundled from other services is significantly more expensive than this threshold. In addition to increasing access to broadband, adoption efforts must address affordability and overcome market conditions that have resulted in broadband service in the United States being both the slowest, and most expensive of countries surveyed.

For the United States to increase the speed and affordability of broadband requires intervention at the national policy level from both the FCC and Congress is needed including:

·       The FCC should immediately begin collecting “more detailed and accurate data on actual availability, penetration, [and] prices” offered by broadband service providers, and make the data publicly available.”[26]

·       The FCC should foster wireline-wireline competition by incorporating successful strategies from other leading nations including structural separation and open access, as documented in a recent FCC commissioned report.[27]

·       Congress should pursue “dig once” legislation to mandate the installation of high-capacity, open access “dark fiber bundles along all federally-subsidized and direct federal highway projects.”[28]

 


[1]             According to a Federal Communications Commission report 36% of Americans who have not adopted broadband cite cost as the primary reason. A report from the National Telecommunications and Information Administration documents that price is a main reason for 26.3% of non-adopters. See John B. Horrigan, Broadband Adoption and use in America: OBI Working Papers Series No. 1 p. 5 (Federal Communications Commission 2010), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-296442A1.pdf(Broadband Adoption and Use in America) and National Telecommunications and Information Administration Digital Nation: 21st Century America’s Progress Towards Universal Broadband Internet Access p. 13 (2010) available at http://www.ntia.gov/reports/2010/NTIA_internet_use_report_Feb2010.pdf (Digital Nation).

[2]             John Horrigan Home Broadband Adoption 2009: Broadband adoption increases, but monthly prices do too. (Pew Internet and America Life ProjectJune 2009) (Home Broadband Adoption).

[3]             Bell offers Fibe 25 service is $67.95 CAD with no TV bundle after a twelve-month promotional period. Converted March 26, 2010 using Google currency converter and rounded to the nearest dollar. http://www.bell.ca/shopping/internet.portal?_nfpb=true&_windowLabel=PrsShpInt_NewAccess_internetBrowse_portlet&PrsShpInt_NewAccess_internetBrowse_portlet_actionOverride=%2Fportlets%2Fpersonal%2Finternet%2Fbrowse%2FgetDetailPage&_pageLabel=PrsShpInt_NewAccess. (Visited March 26, 2010).

[4]             Full Rate offers 2 MBit service is 399 kr. a month and includes a phone line. An unbundled service is not available. Converted March 26, 2010 using Google currency converter and rounded to the nearest dollar. http://www.fullrate.dk/privat/bredbaand/ (translated). (Visited March 26, 2010).

[5]             Elisa offers 24M/1M Full Rate service for €49.90 a month in Helsinki. Converted March 26, 2010 using Google currency converter and rounded to the nearest dollar. http://www.elisa.fi/yksityisille/laajakaista/laajakaista/hinnat_ja_saatavuus/39/ (translated). (Visited March 26, 2010).

[6]            Hutchison Global Communications offers 100Mbps broadband Internet service for Hong Kong Dollar 298 per month. 24-month contract is required. Converted March 26, 2010 using Oanda currency converter and rounded to the nearest dollar. http://www.hgcbroadband.com/superbroadband.html (translated). (Visited April 1, 2010).

[7]            NTT FTTH service is for a single home. Converted March 18, 2010 using Oanda currency converter and rounded to the nearest dollar. http://flets.com/next/index.html (translated). (Visited March 18, 2010).

[8]             SK Telecom Broadband Fiber Internet Pricing. Price is without contract. Converted March 18, 2010 using Oanda currency converter and rounded to the nearest dollar. http://www.skbroadband.com/eng/iproduct/evalley.asp (translated). (Visited: March 18, 2010).

[9]             Bredband 2 offers Stockholm OpenNet 100/100 Mbit/s for 329 SEK a month. Converted March 26, 2010 using Google currency converter and rounded to the nearest dollar.

http://abonnemang.pricerunner.se/pr/bredband/jamfor.php#fs. (Search for Stockholm using post code 11351) (Visited March 26, 2010).

[10]             Service from Chungwa Telecom FTTx. Converted March 18, 2010 using Oanda currency converter and rounded to the nearest dollar. http://www.cht.com.tw/CHTFinalE/Web/Personal.php?CatID=898. http://www.cht.com.tw/PersonalCat.php?CatID=898&Module=Fee,Describe (translated). (Visited March 18, 2010).

[11]             Virgin Mobile offers Up to 50 Mb Broadband for £38 a month after a 3 month promotional period when not bundled with a virgin phone line. Converted March 26, 2010 using Google currency converter and rounded to the nearest dollar. http://allyours.virginmedia.com/websales/product.do?id=15208. (Visited March 26, 2010).

[12]             Verizon offers Fastest Plan through FiOS for $$144.99 when not purchased with a Verizon phone line or TV bundle. Rounded to the nearest dollar. http://www22.verizon.com/Residential/FiOSInternet/Plans/Plans.htm   (Visited: March 18, 2010)

[13]            Bell offers Essential Plus service is $31.95 CAD with no TV bundle after a twelve-month promotional period. Converted March 26, 2010 using Google currency converter and rounded to the nearest dollar. http://www.bell.ca/shopping/internet.portal?_nfpb=true&_windowLabel=PrsShpInt_NewAccess_internetBrowse_portlet&PrsShpInt_NewAccess_internetBrowse_portlet_actionOverride=%2Fportlets%2Fpersonal%2Finternet%2Fbrowse%2FgetDetailPage&_pageLabel=PrsShpInt_NewAccess. (Visited March 26, 2010).

[14]             Full Rate offers Op til 40 Mbit service for169 kr. a month and includes a phone line. Converted March 26, 2010 using Google currency converted and rounded to the nearest dollar. http://www.fullrate.dk/privat/bredbaand/ (translated). (Visted March 26, 2010).

[15]             Elisa offers 1M /512 kbit/s €26.90 a month in Helsinki. Converted March 26, 2010 using Google currency converter and rounded to the nearest dollar. http://www.elisa.fi/yksityisille/laajakaista/laajakaista/hinnat_ja_saatavuus/39/ (translated). (Visited March 26, 2010).

[16]             Hutchison Global Communications offers 1.5Mbps broadband Internet service for Hong Kong Dollar 103 per month. 24-month contract is required. Converted April 1, 2010 using Oanda currency converter and rounded to the nearest dollar. http://www.hgcbroadband.com/res_net_bb_powercom.html (translated). (Visited: April 1, 2010).

[17]             Service from J:COM Cable Internet. Converted March 18, 2010 using Oanda currency converter and rounded to the nearest dollar. http://www.jcom.co.jp/services/net/services/zaq/services.html (translated). (Visited: March 18, 2010).

[18]             Service from KT QOOK Internet Services. Price is without contract. Converted March 18, 2010 using Oanda currency converter and rounded to the nearest dollar. http://java.up2.co.kr/megapass_lite.htm (translated). (Visited March 18, 2010).

[19]             ePhone offers Stockholm Opennet 1/1 Mbit/s Search for 139 SEKa month. Converted March 26, 2010 using Google currency converter and rounded to the nearest dollar.

http://abonnemang.pricerunner.se/pr/bredband/jamfor.php#fs. (Search for Stockholm using post code 11351) (Visited March 26, 2010).

[20]             Service from Chungwa Telecom FTTx. Converted March 18, 2010 using Oanda currency converter and rounded to the nearest dollar. http://www.cht.com.tw/CHTFinalE/Web/Personal.php?CatID=898 ; http://www.cht.com.tw/PersonalCat.php?CatID=898&Module=Fee,Describe (translated). (Visited March 18, 2010).

[21]             Virgin Mobile offers Up to 10 Mb Broadband for £20 a month after a 3 month promotional period when not bundled with a virgin phone line. Converted March 26, 2010 using Google currency converter and rounded to the nearest dollar. http://allyours.virginmedia.com/websales/product.do?id=15208. (Visited March 26, 2010).

[22]             Verizon offers Starter Plan DSL service for $34.99 when not purchased with a Verizon phone line or TV bundle. Rounded to the nearest dollar. Verizon DSL without home phone service. https://www22.verizon.com/Residential/HighSpeedInternet/Plans/Plans.htm. (Visited March 26, 2010.)

[23]             National Broadband Plan p. 37.

[24]             Home Broadband Adoption.

[25]             Broadband Adoption and Use in America p. 5 and Digital Nation p. 13.

[26]             See recommendation 4.2, National Broadband Plan p. 43

[27]             Yochai Benker et al., Next Generation Connectivity: A Review of Broadband Internet Transitions and Plicy From Around the World (Berkman Center for Internet and Society 2010).

[28]                Benjamin Lennett and Sascha Meinrath, Building a 21st Century Broadband Superhighway: A Concrete Build-out Plan to Bring High-Speed Fiber to Every Community (New America Foundation 2009). 

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