Hello, friends,
Imagine shopping for a car and being told that every car on the lot is being offered for the same price, but you don’t get to choose which car you’ll get. The dealership decides if you walk out with a Porsche or a Chevy.
That’s how some internet pricing in the U.S. works. Most home internet plans are offered at a flat base rate, ranging from $40 to $60 a month, but what you get for that price varies widely, according to a new Markup investigation that was published this week.
Reporters Leon Yin and Aaron Sankin analyzed more than 800,000 broadband plans offered across the U.S. from AT&T, Verizon, EarthLink, and CenturyLink, and found that the speeds they offered varied from more than 200 megabits per second (Mbps) in some neighborhoods to below 25 Mbps in others.
To put that in simple terms: 200 megabits per second is the recommended minimum speed for a household that wants to participate in multiple concurrent Zoom calls without interruption. Anything below 25 Mbps is not even considered broadband by the Federal Communications Commission (FCC).
Calculated by price per megabit, that means customers are paying hugely different prices for the same service. For example, CenturyLink offered consumers rates that ranged from 25 cents to $100 per Mbps—which is 400 times greater.
And guess which neighborhoods generally got the worst speeds? Lower-income, historically redlined areas that were less White.
In 92 percent of cities in our investigation where broadband speeds varied, lower-income neighborhoods disproportionately received worse deals. In 66 percent of cities, people of color disproportionately received worse deals. And in 100 percent of cities where data was available, historically redlined neighborhoods received worse deals.
The amazing thing is that the speed disparities are probably even worse than what we found. We calculated these numbers based on the speeds that the companies advertised on their websites, not the speeds that were actually delivered. And as anyone who uses the internet knows, speeds are often quite different from what is advertised—and usually not in a good way.
The telecom companies defended their practices. Mark Molzen, a spokesperson for CenturyLink’s parent company, Lumen, said, “We do not engage in discriminatory practices like redlining and find the accusation offensive.”
AT&T spokesperson Jim Greer said that The Markup’s analysis had ignored the company’s low-cost access offerings and participation in the FCC’s Affordable Connectivity Plan, which provides a subsidy for household internet bills. “Any suggestion that we discriminate in providing internet access is blatantly wrong,” he said.
Verizon spokesperson Rich Young referred inquiries to the industry group USTelecom, which said that internet providers can have good reasons to charge the same price for slower service. “Operating and maintaining legacy technologies can be more expensive, especially as legacy network components are discontinued by equipment manufacturers,” said USTelecom senior vice president Marie Johnson.
The findings come at a time when U.S. regulators are looking into broadband equity. The FCC is currently drafting rules “to promote equal access to broadband across the country, regardless of income level, ethnicity, race, religion, or national origin.”
Broadband pricing wasn’t always this way. Companies used to charge different prices for different speeds, in what were called “tiers.” But in recent years, they have moved toward a single price in what the National Digital Inclusion Alliance called in a 2018 report “tier flattening.”
Unlike buying a car, however, it’s hard for broadband customers to know that they are getting a Chevy and not a Porsche when they pay that single, tier-flattened price.
To buy broadband, you must enter your address into one of the telecoms’ websites to see the price, speed, and availability. Very few people are likely to enter other addresses into the site to compare speeds that their neighbors are getting—and even if they do, they aren’t likely to be able to convince the company to lower their rate.
This lack of transparency means that the companies have been able to hide the stark disparities from public view. It took Leon and Aaron months of work to scrape all the prices from company websites, then match them with Census records to analyze which neighborhoods were getting which prices.
It’s hard work, but it’s the important work that journalists must do to make these hidden disparities visible to the public.
As always, thanks for reading.
Best,
Julia Angwin
The Markup
(Additional Hello World research by Eve Zelickson.)