Feb. 18, 2011
WASHINGTON — People who live in low-income areas of the District of Columbia on average get less for their broadband dollar than those who live in the wealthy suburbs — and subscribers in rural areas get the worst deals of all, according to a new study.
The Investigative Reporting Workshop at American University analyzed customer speed tests and surveys around the nation’s eighth-largest metropolitan statistical area, which has a population of about 5.4 million.
The data — 4,294 records — offer a rare glimpse into broadband service performance and pricing on a local level. Such information is closely guarded by providers and is not available from the government. The pricing data were compiled by network diagnostics firm Ookla, which is one of two providers of connection speed tests featured on the Federal Communications Commission’s website.
Only subscribers to stand-alone broadband service were included in the analysis.
Connection speeds are determined by how fast a piece of data travels over the Internet in a single second. To measure value, the most popular method is to divide the monthly cost of service by the connection speed. The result is the average cost per megabit, per second (Mbps). This measure might show that a subscriber's monthly bill may be low, but not worth it because the connection speed is so slow.
The numbers indicate that while people in poor neighborhoods may pay a little less each month for service, they are likely to experience much slower speeds.
When comparing the 25 poorest ZIP codes in the D.C. metropolitan area where at least one speed test was taken, to the 25 wealthiest, the difference in value was striking:
• Cost per Mbps in the poorer ZIP codes was $31.17 (based on 304 surveys); cost per Mbps in the wealthier ZIP codes was $9.58 (based on 428 surveys).
• The average monthly bill in the poorer areas was $51.22; the average monthly bill in the wealthier areas was $55.05.
• The median, or midpoint figure, in the poorer areas was $10.42 per Mbps, meaning half as many of those surveyed paid more as paid less; the median figure in the wealthier areas was $3.66 per Mbps.
The wealthy areas were in Montgomery County in Maryland and Fairfax County in Virginia. The poorer areas were in the District and in rural counties. More broadly, the mostly wealthier suburban counties enjoy a better value in broadband, but pay a little more per month than residents of the District.
Residents of the four counties that surround the District plus the cities of Alexandria and Falls Church pay $10.11 per Mbps (based on 2,286 surveys) and an average of $50.64 per month for service.
District residents pay $16.31 per Mbps (based on 524 surveys) and $47.31 per month for service.
Residents of outer suburbia — the counties beyond the close-in suburban counties that are still in the DC metropolitan statistical area — pay $14.99 per Mbps (based on 1,053 surveys) and an average of $52.54 per month for service.
Speeds are measured as downloads (incoming data) and uploads (outgoing data). The download speed — how fast a digitized video is streamed over your connection, for example —is used for all measures in this report. Upload speeds, which matter to people who post videos on YouTube, are generally much slower.
Top service providers
The broadband market in the Washington, D.C., region is dominated by two cable companies — Comcast Corp. and Cox Communications — and one telephone company, Verizon Communications Inc. There are also two smaller competitors, RCN Corp., a digital cable company, and Clearwire Corp., a wireless firm.
Here’s how Comcast and Verizon compared:
• Comcast, according to an average of 1,254 surveys, charged customers $5.76 per Mbps.
• Verizon, according to 1,744 surveys, charged $12.34 per Mbps — more than twice as much as Comcast.
• Verizon charged $50.86 per month on average.
• Comcast charged $52.68.
• The median, or midpoint price, is much lower, at $5.13 per Mbps for Verizon and $2.84 for Comcast.
Verizon trailed badly despite the continuing rollout of its fiber-optic FiOS service, which is as fast as or faster than most cable connections. But FiOS isn’t available everywhere.
It is impossible to say how many survey results were from FiOS users. The company does not release regional subscriber numbers. A written statement from Verizon spokesman Ed McFadden was critical of the report, faulting it for not separating Verizon’s DSL and FiOS services.
The Workshop’s request for a breakdown of FiOS customers in the region was ignored.
The study analyzed surveys from people who subscribed to a stand-alone broadband service and excluded those who may also receive television and telephone service from the same provider. Verizon criticized that decision, noting that bundled services “provide consumers with greater values in pricing.”
Comcast did not respond to a request for comment.
Cox Communications, a cable company that serves Fairfax County and Fredericksburg in Northern Virginia, charges $6.60 per Mbps, according to 528 surveys. Cox’s monthly average cost was $46.77.
Rounding out the five regional providers, RCN Corp., averaged $11.06 per Mbps, or $48.57 per month, for a median price of $5.77 per Mbps, according to 126 surveys, and Clearwire Corp., according to 172 surveys, averaged $16.19 per Mbps for $42.16 per month and a median price of $12.47 per Mbps.
RCN did not respond to a request for comment.
Clearwire, whose major investors include Sprint, Comcast and Time Warner Cable, delivers broadband via a wireless technology known as WiMax.
“Wireline service will generally test faster than a wireless service; it’s just the nature of the two technologies,” said Clearwire spokesman Mike DiGioia. “However, the major advantage is mobility.”
The survey also included speed tests from 17 counties just outside the Washington, D.C., metropolitan statistical area. That region was by far the worst in terms of value. Rural residents pay $30.28 per Mbps (based on 431 surveys) and $53.84 per month for service, a per-megabit rate far higher than the other three regions.
Virginia Broadband LLC, a Culpeper, wireless broadband provider, offered the worst value. According to a summary of 24 surveys, the company charges a whopping $198.13 per Mbps, the most of any company that underwent more than one test. The average monthly bill was $94.07, and the average speed was less than a megabit per second.
The company did not respond to requests for comment.
The broadband industry has fought efforts by the government to collect and publicize even the most basic information about service. And what little data is collected is kept secret.
The Federal Communication Commission’s year-old National Broadband Plan states that the “dearth of consistent, comprehensive and detailed price data makes it difficult to evaluate price competition,” adding that “the data that do exist are imperfect.” The plan recommends that the government collect and publish “detailed, market-by-market information on broadband pricing and competition” and make it publicly available.
The FCC is now collecting speed test data and is reviewing its data collection rules.
On Thursday, the National Telecommunications and Information Administration, part of the Commerce Department, unveiled the National Broadband Map on its website.
The extensive mapping and data collection program, budgeted at $350 million, allows people nationwide to see what companies offer broadband service in their area at the Census block level. Unfortunately, there is no price information and displayed connection speeds are those advertised by the provider — not actual speeds. So while the map will help policymakers determine where there are gaps in broadband coverage nationwide, it will not give consumers the means to comparison shop for service.
The NTIA said the actual cost of the program will be $210 million over five years. The map will be a “valuable tool for policymakers, businesses, consumers, researchers, economic developers and others working to bridge the technological divide…” according to a statement by NTIA Administrator Lawrence Strickling.
Strickling said price information was not included because the map is updated every six months, and prices could change. He also said the way companies bundle their services makes it difficult to determine price.
How fast is fast enough?
Video-hungry broadband customers are increasingly looking at connection speeds when shopping for Internet service. Consumers have a need for speed so they can watch movies, television shows and video clips online without waiting hours for files to download.
How much speed is needed depends on the customer. For a 15-minute video clip on YouTube, 1 Mbps is recommended for “optimal streaming.” In Apple’s iTunes store, the download of a 45-minute, high-definition video will take 45 minutes to 60 minutes at 1 Mbps. It will take 10 to 15 minutes at 5 Mbps.
People buy “tiers,” not megabits per second, when they shop for broadband service, said Blair Levin, who oversaw the creation of the National Broadband Plan. So as long as a connection delivers what customers want, and the cost is within their budget, chances are they will stick with it.
But if demand expands for new, bandwidth-hungry applications — such as multi-player, online gaming or live video-conferencing — the only choice could be the local cable company.
The Investigative Reporting Workshop is a professional journalism center in the School of Communication at American University. Funding for this report was provided by a grant from the John S. and James L. Knight Foundation.
ZIP code-level income information was provided by Esri, a company that specializes in geographic information systems and mapping.
Investigative Reporting Workshop researcher Mia Steinle contributed to this report.
To test your connection speed, go to www.speedtest.net.