No Kidding: Americans Pay More for Less

Spoiler alert: Americans pay more for high-speed mobile Internet service than anyone else.

A new study from Wireless Intelligence reveals that mobile users in the U.S., which is the world’s biggest market for LTE — otherwise known as 4G — are  seriously overcharged for the service. The culprit: the absence of real competition in the wireless market.

According to the study, U.S. customers pay an average of $7.50 per gigabyte on Verizon Wireless’ LTE network. That’s three times what the typical European user pays: an average cost of $2.50 per gigabyte. And in Sweden, 4G users pay just 63 cents per gigabyte!

The discrepancy boils down to consumer choice. As the New York Times notes:

Europe has the greatest number of operators selling LTE: 38 of 88 operators worldwide. Even small markets like Austria, Finland and Portugal have three LTE operators.

Until July, Verizon Wireless and AT&T Mobility were the only U.S. operators selling LTE nationally. … And Verizon Wireless, which began selling LTE service in December 2010, has largely had the U.S. LTE market to itself in setting prices. In June, Verizon Wireless had 11.6 million LTE customers, and AT&T Mobility, the next biggest U.S. seller of LTE, had 750,000.

Europeans in “small markets” like Austria and Portugal have a choice of three companies selling 4G services, with all providers essentially on equal footing. But here in the U.S., we’re stuck with the AT&T and Verizon duopoly. The two carriers abuse their market power to crush any competition from smaller providers. The lack of choice drives up costs for consumers, making it harder for people to access the mobile Internet.

Given our increasing dependence on the mobile Internet, this is a troubling trend. It’s why we must keep pushing for policies that promote broadband competition — and continue to stand up to attempts at industry consolidation like the failed AT&T/T-Mobile merger.

Original photo by Flickr user alumroot

If you care about promoting competition in the wireless market, please consider a donation to the Free Press Action Fund.

People + Policy

= Positive Change for the Public Good

people + policy = Positive Change for the Public Good