U.S. Internet Access Speeds are Climbing Rapidly

U.S. mobile and fixed network speeds are on a rapid climb. In 2018, mobile network speeds increased for all the four leading mobile service providers. AT&T average 4G speeds grew from about 43 Mbps to nearly 70 Mbps, on average. Sprint speeds climbed from less than 40 Mbps to about 65 Mbps.

T-Mobile US speeds were boosted from about 40 Mbps to 51 Mbps, while Verizon speeds were up from about 50 Mbps to 60 Mbps.

source: PCmag

Fixed network speeds speeds are climbing rapidly as well. In 2018 alone, average speeds climbed 36 percent in the U.S. market. In the third quarter of 2018, for example, average downstream speeds were 96 Mbps, upload speeds 33 Mbps.

source: Speedtest

Comcast, the largest U.S. fixed network ISP alone sells gigabit service to 58 million U.S. homes, and says it “has increased speeds 17 times in 17 years and has doubled the capacity of its broadband network every 18 to 24 months.”

Charter, the second-largest U.S. cable operator, sells gigabit service to at least 33 million U.S.homes. Since the footprints of the two firms do not overlap, those two companies alone can provide gigabit service to 91 million U.S. homes, roughly 70 percent of all homes in the United States.

Irresistible Storylines That Always are Wrong

Some storylines are irresistible. Slow U.S. 5G speeds provide an example. A classic storyline about U.S. telecommunications is “U.S. is behind.”

Author Steven Pressfield, in his book Nobody Wants to Read Your Sh*t, points out the elements of any story. These universal principles of storytelling include:

1) Every story must have a concept. It must put a unique and original spin, twist or framing device upon the material.

2) Every story must be about something. It must have a theme.

3) Every story must have a beginning, a middle, and an end. Act One, Act Two, Act Three.

4) Every story must have a hero.

5) Every story must have a villain.

6) Every story must start with an Inciting Incident, embedded within which is the story’s climax.

7) Every story must escalate through Act Two in terms of energy, stakes, complication and significance/meaning as it progresses.

8) Every story must build to a climax centered around a clash between the hero and the villain that pays off everything that came before and that pays it off on-theme.

That is a framework often used when writers talk about the state of U.S. telecommunications. U.S. 5G speeds are slow, compared to most other markets. There are reasons. U.S. service providers are relying on low-band spectrum for coverage, and that necessarily limits speeds. Most of the leading U.S. mobile operators, with the exception of T-Mobile, have little mid-band spectrum, which is the preferred band globally.

So U.S. mobile speeds are slow, and have been relatively slow, even for 4G services. 

That is a necessary evil at the moment, as there is little unencumbered mid-band spectrum available at the moment, in the U.S. market, though that will change as more mid-band spectrum is reallocated for mobile use. 

But the “U.S. is behind” storyline has been used often over the last several decades. Indeed, where it comes to plain old voice service, the U.S. is falling behind meme never went away.

In the past, it has been argued that the United States was behind, or falling behind, for use of mobile phones, smartphones, text messaging, broadband coverage, fiber to home, broadband speed or broadband price. 

In the case of mobile phone usage, smartphone usage, text message usage, broadband coverage or speed, as well as broadband prices, the “behind” storyline has proven incorrect, over time. 

Some even have argued the United States was falling behind in spectrum auctions. That clearly also has proven wrong. What such observations often miss is a highly dynamic environment, where apparently lagging U.S. metrics quickly are closed.

To be sure, adoption rates have sometimes lagged other regions. Some storylines are repeated so often they seem true, and lagging statistics often are “true,” early on. The story which never seems to be written is that there is a pattern here: early slowness is overcome; performance metrics eventually climb; availability, price and performance gaps are closed over time. 

The early storylines often are correct, as far as they go. That U.S. internet access is slow and expensive, or that internet service providers have not managed to make gigabit speeds available on a widespread basis, can be correct for a time. Those storylines rarely--if ever--hold up long term. U.S. gigabit coverage now is about 80 percent, for example. 

Other statements, such as the claim that U.S. internet access prices or mobile prices are high, are not made in context, or qualified and adjusted for currency, local prices and incomes or other relevant inputs, including the comparison methodology itself. 

Both U.S. fixed network internet prices and U.S. mobile costs have dropped since 2000, for example. 

The point is that the “U.S. is behind” storyline seems irresistible. That storyline has always proven incorrect, though, over time. The historically-accurate storyline is that “slow start” is what we see. Over some time, U.S. metrics tend to rise to about 12th to 15th globally, but no higher, ever. 

The bottom line is that it is quite typical for U.S. performance for almost any important new infrastructure-related technology to lag other nations. It never matters, in the end. 

Eventually, the U.S. ranks somewhere between 10th and 20th on any given measure of technology adoption. That has been the pattern since the time of analog voice. 

We often forget that six percent of the U.S. landmass is where most people live. About 94 percent of the land mass is unpopulated or lightly populated. And rural areas present the greatest challenge for deployment of communications facilities, or use of apps that require such facilities.

U.S. Broadband Faster, More Available Than in Europe, Study Finds

On some measures, U.S. consumers have access to, and use, faster Internet access services, more than consumers in Europe, in large part because U.S. policies have encouraged investment, compared to European policies that historically have been more focused on wholesale access to encourage competition.

It also would be fair to note that most communities have access to at least two facilities-based providers, a fact that arguably has encouraged investment in upgraded facilities.

Google Fiber’s entry also has had a direct impact, encouraging other Internet service providers to drop their prices to $70 to $80 a month for gigabit access, and to invest in such facilities.

Some would argue Google Fiber’s decision not to allow wholesale access, and thus reap the benefits of capital and operating investments, is one example of how there are incentives to invest. Google Fiber cannot be compelled to sell wholesale access, especially at low rates, to other competitors.

A far greater percentage of U.S. households have access to Internet access at 25 Mbps or faster, the study argues.

On a national basis, 82 percent of U.S. consumers can buy access at 25 Mbps or faster, compared to 54 percent of Europeans.

In rural areas, 48 percent of U.S. rural consumers have access to 25 Mbps or faster services, compared to 12 percent in Europe, according to a study by Christopher Yoo, University of Pennsylvania law school professor.

The study also found that the United States had 23 percent fiber-to-premises coverage, compared to 12 percent in Europe.

The United States also has 86 percent coverage of Long-Term Evolution (4G LTE), compared to 27 percent LTE coverage in Europe.

U.S. download speeds during peak times (weekday evenings) averaged 15 Mbps, below the European average of 19 Mbps, however.

During peak hours, U.S. actual download speeds were 96 percent of what was advertised, compared to Europe, where consumers received only 74 percent of advertised download speeds.

U.S. consumer experience in the areas of latency and packet loss also was better than in Europe.

U.S. broadband “stand-alone” prices were cheaper than European broadband for all speed tiers below 12 Mbps.

U.S. broadband was more expensive for higher speed tiers. The caveat is that most U.S. consumers do not appear to pay “stand-alone” prices for fixed network broadband, typically buying bundles that in essence discount prices.

Consider that 97 percent of AT&T customers bundle their video subscription service with other AT&T services.  Cable providers have 75 percent or more of their subscribers on a bundle of video and broadband, AT&T notes.

Standard coverage is available in 99.5 percent of U.S. households and 99.4 percent  of European households. Standard fixed coverage is available in 95.8 percent of U.S. households and 95.5 percent of European households, the study found.

Mobile broadband coverage at 3G speeds also fall within quite similar ranges, covering

98.5 percent of U.S. households and 96.3 percent of European homes.

Yoo attributes a regulatory “light touch” for higher U.S. investment in broadband and expanded access to high-speed internet in the US compared to Europe.

The University of Pennsylvania Law School study also showed that Europe’s treatment of broadband as a public utility, which some net-neutrality advocates are pushing for in the US, has hindered internet access growth there.

The study notes that, in Europe, where telecom service revenues have fallen by more than 12 per cent since 2008, the financial return for investing in next-generation networks is less promising, since those facilities must be leased to competitors, allowing them to avoid building their own networks.

Those rules also reduce the “scarcity value” of new networks, though.

“The empirical evidence thus confirms that the United States is faring better than Europe in the broadband race and provides a strong endorsement of the regulatory approach taken so far by the US,” said the study, which was written by law professor Christopher Yoo.

The differences in regulatory regimes also contributed to $562 of broadband investment per household in the US versus $244 per household in Europe, where regulators treat broadband as a public utility and promote service-based competition where new players lease existing facilities at wholesale cost.

U.S. policy has emphasized facilities-based competition by firms that can build new facilities, and then reap any rewards, without enabling competitors.

U.S. policy also shows the importance of competition between cable TV and telcos. Although many advocates regard telco fiber to the home as the primary platform for faster networks, the data suggest otherwise.

In Europe, DOCSIS 3 (39 percent coverage as of 2012) and VDSL (25 percent) both contribute more to fast network coverage than does FTTP at 12 percent.

In terms of actual subscriptions, the distribution skews even more heavily towards cable connections (DOCSIS 3), with 57 percent of subscribers, followed by FTTP at 26 percent,

and VDSL at 15 percent.

Even if one were to focus exclusively on FTTP coverage, the data clearly give the edge to the U.S. market. As of the end of 2011, FTTP service was available in 17 percent of U.S.

households and 10 percent of European households. By the end of 2012, FTTP service increased to 23 percent of U.S. households and 12 percent of European households, the study found.

But mobile Internet access now is more important than ever. As of the end of 2011, Long Term Evolution networks covered 68 percent of the U.S. population and eight percent of European households.

By the end of 2012, LTE coverage increased to 86 percent of the U.S. population and 27 percent of European households. Note the difference in data collection, though. European dat is “by household.” U.S. data is by “person.” That understates European coverage figures, to the extent that households have more than a single occupant.

On the other hand, average download speeds at peak periods are higher in Europe, compared to the United States.  

Get Ready for Continued Boosts in Average U.S. Internet Access Speeds

It always is dangerous to rely on slow or ponderous measurement mechanisms when any process is changing rapidly, as is the case for U.S. fixed network internet access. Historically, the United States has ranked about 15th globally on measures of voice service adoption or internet access adoption.

source: CableLabs

Rankings for internet access speed have often shown lower rankings than 15th, globally. Fastmetrics ranked the the United States about 20th for fixed network speeds about the middle of 2018.

But speeds in the U.S. market are changing very rapidly, largely on the strength of cable TV fixed internet services. The latest Speedtest global comparison shows rapidly-increasing U.S. internet access speed, which improved about 36 percent in one year.

But 5G also will boost average mobile speeds significantly as well. Mobile speeds are one example, where the United States in 2019 ranked about 30th globally. All that is likely to change as 5G coverage spreads.

It is not just that 5G will provide an order of magnitude (higher in some cases) boost in speeds. On a comparative basis, the U.S. market is a first mover on 5G, so will reap the benefits while most other countries have not yet launched 5G.

It seems always to be the last seven percent of households that lag average U.S. internet access speeds and availability.

If there are about 130 million U.S. housing locations, that implies the number of households not reached by cable networks is perhaps nine million locations.

Telco networks probably reach about 98 percent of housing locations. That does not mean seven percent of U.S. homes have no fixed network internet access, or that they have no ability to buy internet access.

What those numbers mean is that, altogether, 93 percent of homes have access to 25 Mbps fixed network service (the minimum definition of “broadband”), with nearly 100 percent access to 25 Mbps or 30 Mbps by satellite.

Most of the homes that cannot buy a fixed network “broadband” service, using the current definition, can buy service at lower speeds. It always is the last couple of percent of homes in the most-isolated areas that have issues with coverage or speeds.

source: FCC

The issues with the last few percent of locations will remain. But there is every reason to predict a dramatic increase in typical U.S. internet access speeds as 5G is introduced, at least in part because fixed wireless will boost speeds, in part because mobile 5G will start to become more attractive as an alternative to fixed connections and because cable operators will continue to push speeds to stay ahead of those developments.

The ISP Speed Claim Dilemma

ISPs face marketing issues no different than other providers of goods and services, namely that consumers generally have some expectations about what features and what prices constitute a reasonable offer.

That means every provider wants to appear to have an edge of some sort, and at a minimum, to supply the baseline of features consumers expect.

ISPs have one additional problem, namely that their product is essentially intangible. As with any other intangible product or service, a consumer cannot fully evaluate product claims until after the product is purchased.

But it still is reasonable to argue that most consumers considering the purchase of an Internet access service will evaluate the advertised speed and the advertised price. That means there will always be pressure to advertise the highest possible speeds.

But consumer protection agencies and regulators do not tend to like exaggerated claims. That is why more attention now is focused on how closely ISPs are able to deliver on speed claims. And there might be more work to do on that score in Europe than in the United States.

Actual European Internet access speeds are about 74 percent of advertised speeds during peak hours, a new study sponsored by the European Commission has found. Recent studies by the U.S. Federal Communications Commission have found that U.S. ISPs deliver actual speeds about 96 percent of advertised speeds.

The average download speed across all measured countries was 19.47 Mbps during peak

hours, and this increased slightly to 20.12 Mbps when all hours were considered.

Performance varied by access network technology.

Digital subscriber line services achieved 63 percent of the headline download speed, while cable services managed to achieve 91 percent of headline speeds. Fiber to home or VDSL services delivered 84 percent of headline speeds.

Fiber to home services achieved the fastest speeds in absolute terms, at 41 Mbps. Cable

services achieved 33 Mbps, whilst DSL services delivered 7 Mbps, on average.

In the September 2012 testing period, U.S. ISPs on average delivered 97 percent of advertised download speeds during peak periods, statistically equivalent to the last report, which found that the studied ISPs were able to deliver 96 percent of advertised speeds during peak hours of use, the FCC has reported. Those results were in line with testing conducted in 2011 as well.

On average, during peak periods DSL-based services delivered download speeds that were 85 percent of advertised speeds, cable-based services delivered 99 percent of advertised speeds, fiber-to-the-home services delivered 115 percent of advertised speeds, and satellite delivered 137 percent of advertised speeds, the FCC says.

This compares to July 2012 results showing largely the same performance levels: 84 percent for DSL, 99 percent for cable, and 117 percent for fiber. These results suggest that many ISPs are meeting established engineering goals for their respective technologies.

It isn’t immediately clear why DSL networks in the U.S. market were able to deliver real-world speeds more nearly matching advertised speeds, compared to European DSL networks.

But a reasonable guess is that the gap is explainable almost entirely by ISP marketing claims.

The EC study says two countries did not achieve 50 percent of advertised speed. Those two countries primarily use DSL networks, but more importantly “advertised their services

using only a handful of very high headline speeds.”

Hungarian ISPs delivered actual speeds that were 94 percent of advertised.  DSL services also achieved over 90 percent of advertised speeds. So it appears the difference is the marketing of service, not something inherent in the networks.

Since DSL performance is directly related to loop length, experienced speeds for consumers closer to the central office will increasingly diverge from speeds experienced by consumers further away from the central office.

It makes quite a difference whether the typical speed at 1,000 meters is used as the reference, compared to 5,000 meters.

But loop length is not the only consideration for DSL or other providers. Contention ratios and the degree of sharing also will affect performance. ISPs simply need to market services that reflect all the known limits, if they want to deliver on promised speeds.

But that is the dilemma. A more-realistic set of claims might mean forfeiting an advantage to other providers.

Truth, Lies, Statistics

Language always matters. Definitions and assumptions always matter, because the truth matters. Methodology matters, in that regard. 

The NPD Group says only 50 percent of homes in the continental U.S. have “true broadband speed of 25Mbps download or higher.”

That can be--and will be--interpreted at least two ways. It could mean that internet service providers are way behind the curve in making quality broadband available, or it could mean that consumers choose not to buy it. 

The former is a failure of supply; the second is a consumer choice. It matters which we are talking about. In fact, Openvault test data does not support the NPD assertions. In the third quarter of 2021, for example, 9.8 percent of actual consumers had test data showing downstream speeds “less than 50 Mbps.”

The percentage of customers unable to get 25 Mbps obviously is less than that. 

Though “average” speeds change all the time, the Openvault data show that by the third quarter of 2021, about 66 percent of all U.S. internet access buyers were getting speeds between 100 Mbps and 400 Mbps. 

source: Openvault 

While it might have been true that half of U.S. consumers were buying services operating between 100 Mbps and 200 Mbps a year earlier, it was by the third quarter of 2021 very hard to determine how many were really buying services unable to meet the FCC definition of 25 Mbps downstream. 

What also is undeniable is that most speed tests are conducted by consumers using Wi-Fi. That means the tests understate speed, as Wi-Fi speeds often are many times slower than delivered ISP speed. 

The point is that ISP delivered speeds quite often degraded by performance of the in-home Wi-Fi networks, older equipment or in-building obstructions. Actual speeds delivered by the internet service provider to a router are one matter. Actual speeds experienced by any Wi-Fi-connected device within the home are something else. 

source: CMIT Solutions 

In practice, Wi-Fi speeds can be an order of magnitude slower than the speed actually delivered by the ISP. So when a consumer using Wi-Fi measures 25 Mbps, the delivered speed can be as much as 250 Mbps. 

NPD Group says about its methodology that “the report is based on a combination of sales data, speed test results, consumer surveys, FCC data and other sources.”

That implies demand side dales data and speed test results. Consumer surveys can be either demand or supply side based. The Federal Communications Commission data tends to be supply side (state of facilities and availability). 

To be clearer, what NPD likely means is that 50 percent of U.S. consumers choose to buy internet access at speeds less than 25 Mbps. But that cannot be true, if other demand side studies are correct. 

The storyline that U.S. internet access is slow or expensive seems irresistible, even if it is questionable. A study by Speedtest of 2020 internet access speeds showed the United States had the highest performance of all countries who are members of the G-20. 

 

source: Ookla

So much for the demand side. On the supply side, 

A recent study by the European Telecommunications Network Operators association says prices are not high.  

“In fact, 34 percent of homes receive internet access at speeds of less than 5 Mbps, including 15 percent  that do not have any internet access. The key phrase is “receive.” It is the speed they purchase. 

There are other important nuances. When do people take speed tests? Primarily when they are having a problem. Almost nobody routinely takes speed tests when performance is untroubling. So there is a bias to the taking of speed tests when networks are most congested. 

Is it possible that half of U.S. homes do not receive 25 Mbps? It seems highly doubtful. If there are 10 concurrent devices active inside a home, might each device see performance that looks like “less than 25 Mbps?” That is possible, if all 10 devices are simultaneously active and delivered speed is about 250 Mbps and all the devices use Wi-Fi.

But to argue that “half of U.S. homes” do not “receive” 25 Mbps seems contradicted by available data on actual usage. And that is just the demand side.

Between 60 percent and 80 percent of U.S. home locations can buy gigabit service if they chose to do so. Not all do so. 

But that reflects a consumer choice, not a failure of supply. 

It is highly likely that at least 80 percent of U.S. homes can buy internet access at speeds no lower than 500 Mbps and 1 Gbps if they choose to do so. Over time, as average supplied speeds climb, they will eventually do so.