It turns out that former FCC Chair Ajit Pai's promises of a brave new world of competition and performance increases and price drops when ISPs were released from burdensome regulation.
Instead, prices continued to rise unabated, and there was no meaningful improvement in performance.
Not a surprise. The broadband industry is about extracting monopoly rents, and deregulation increases their ability to extract the aforementioned rents:
The average US home-Internet bill increased 19 percent during the first three years of the Trump administration, disproving former Federal Communications Commission Chairman Ajit Pai's claim that deregulation lowered prices, according to a new report by advocacy group Free Press. For tens of millions of families that aren't wealthy, "these increases are felt deeply, forcing difficult decisions about which services to forgo so they can maintain critical Internet access services," Free Press wrote.
The 19 percent Trump-era increase is adjusted for inflation to match the value of 2020 dollars, with the monthly cost rising from $39.35 in 2016 to $47.01 in 2019. Without the inflation adjustment, the average household Internet price rose from $36.48 in 2016 to $46.38 in 2019, an increase of 27 percent.
The nominal increase in each of the three years was between 7.27 percent and 9.94 percent, while inflation each year ranged from 1.81 percent to 2.44 percent.
"That means the nominal increase in broadband bills was more than four times the rate of inflation during those three years," Free Press said. The report is based on the Bureau of Labor Statistics (BLS) Consumer Expenditures Survey data, which does not yet include 2020.
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"[B]roadband prices consistently increase faster than the rate of inflation while the providers' own costs do not. This makes this increasingly critical infrastructure service both more expensive in real terms to users and more profitable for the ISPs," the report said.
Capital investment by Internet providers has dropped, "with substantial declines at large companies like AT&T (where 2020 investment was 52 percent below the 2016 total for the company on an inflation-adjusted basis) and Comcast (where 2020 cable segment investment was 22 percent below 2016's level on an inflation-adjusted basis)," the report said.
In a press release, Free Press said that ISPs "grew their profits to record levels before and during the COVID-19 pandemic by increasing their prices during an unprecedented economic downturn," and that "low-priced entry-level options for high-speed Internet service are disappearing, raising the adoption barrier for low-income families."
The entire narrative that has driven the overpriced and under-performing connectivity situation is a lie.
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