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More on Speed: Just How Satisfied Are Customers?

June 2nd, 2010 by Joel Gurin - Chief of the Consumer and Governmental Affairs Bureau

Our survey report on broadband speed yesterday attracted national attention and some additional questions. We've been asked for more detail on our findings about customer satisfaction with broadband speed. As we reported, 91 percent of fixed broadband customers are "very" or "somewhat" satisfied with that service, compared to 71 percent who are satisfied with the speed of mobile broadband. A closer look gives a fuller picture.

For fixed broadband, 50 percent of customers were very satisfied with the service overall, 41 percent were somewhat satisfied, 6 percent were "not too" satisfied, and 3 percent were not satisfied at all.

For mobile broadband, we asked specifically about satisfaction with speed, a slightly different question. Here, the numbers were lower: 33 percent very satisfied, 38 percent somewhat satisfied, 8 percent not too satisfied, and 5 percent not satisfied at all. (The other 14 percent said they didn't know.)

What to make of these numbers? A few things.

First, consumers are fairly well satisfied with the speed of the broadband they get at home. Having 50 percent say they are "very satisfied" is a strong showing, although it still leaves room for improvement. Even if people are satisfied with their home broadband speed, however, they may be paying hundreds of dollars a year more than they need to. Consumers still need better information to know what speed they need for the applications they run. And given the split between "very" and "somewhat" satisfied customers, more information on broadband speed would also help consumers choose between different providers.

For mobile broadband, the lower numbers show that this service still has a way to go to improve customer satisfaction - which is especially important as more people turn to mobile for their primary Internet connection. It's technologically harder to deliver high speeds by mobile, so the satisfaction gap between fixed and mobile broadband is understandable. But consider that satisfaction with mobile service overall - not broadband speed specifically - is quite high, with 59 percent very satisfied and 33 percent somewhat so. A decade ago, that satisfaction rate might have been hard to imagine. The wireless industry has made tremendous strides in innovation and service quality overall, and we can expect improvements in mobile broadband speed as well.

Accurate measurements of mobile broadband speed can be a boost to innovation. These measures can help wireless carriers learn more about where their networks function best and where they may fall short. Most consumers now have a choice of mobile broadband providers, and will be able to use these new measures to choose the providers who will serve them best.  Consumer choice, in turn, can increase competition, innovation, and ultimately help lead to better broadband service for all.

[Cross-posted on Blogband]

4 Responses to “More on Speed: Just How Satisfied Are Customers?”

  1. Guest says:

    Hi Joel,

    I respect that the FCC is attempting to address the United States falling behind in world broadband rankings, but you're overlooking one major caveat; usage. What good is a 1Mbps connection or even a 50Mbps connection if US ISP place extremely low limits on usage while still retaining a high price. In the case of ILEC or CLEC, when you have ISP that are also content providers (cable tv, video services), it in their best interests to introduce data transfer limits on usage as an anti-competitive means of protection against the emergence of online competitors like Hulu and Netflix. As you are likely aware, online video services require high amounts of bandwidth. Streaming a compressed high definition movie using H.264 can use between 6Mbps-12Mbps. Now if you put this in context, that single movie may require anywhere from 6GB-13GB or more of data transfer.

    Last year Time Warner tried to introduce caps in several markets. It wasn't until Senator Chuck Schumer of NY threatened Time Warner with regulation that they eventually backed down. However, in other markets, caps are still common.
    http://arstechnica.com/tech-policy/news/2009/04/the-price-gouging-premiums-of-time-warner-cables-data-caps.ars

    You now have wireless phone providers like AT&T jumping on the same data cap bandwagon by removing unlimited data plans, and charging more for less service.
    http://www.engadget.com/2010/06/02/atandt-makes-sweeping-changes-to-data-plans-iphone-tethering-comi/


    If you're looking for an example of how areas in the United States are absent of competition you have to look no further than Alaska.

    Cable company GCI in Alaska is a perfect example of an ISP that has charged their customers prices way above industry standards and capped usage on residential customers.

    GCI's unbundled internet offerings (notice the price and allocated usage)
    http://www.gci.com/forhome/internet/standalone_modems.htm

    GCI's bundled internet offerings (prior to 4/20/10 GCI advertised these services as "unlimited downloads" )
    http://www.gci.com/forhome/internet/bundles_high_speed_modems.htm

    GCI used an incentive "unlimited downloads" on bundled internet services to convince customers to buy their "ultimate package" bundle (cable tv, POTS, long distance).
    As of 4/20/10, GCI changed their ToS, and updated their website to remove most of the references to "unlimited downloads". GCI has now placed the same paltry limits on usage as their unbundled services.
    http://portal.gci.net/usage/fair_use.html

    A normal counter argument, would suggest to vote your wallet and seek out local competition. What if there is no competitor? What if the local competition offers services that were competitive in 2000, not 2010?

    ACS internet offerings (notice the forced bundling with POTS, and speed tiers)
    http://www.acsalaska.com/personal/internet/high-speed/bundles.asp

    ACS's lowest speed tier doesn't even meet the FCC's own qualification of broadband at 768Kbps downstream.
    http://www.engadget.com/2008/03/19/fcc-redefines-broadband-to-mean-768kbps-fast-to-mean-kinda/

    As a residential customer what options are we left with? Do we pay exorbitant rates from the local CLEC and face limited data caps on usage, or do we pay exorbitant rates from the ILEC for forced bundling and speed tiers that were competitive 10 years ago?

  2. Guest says:

    Joel please read my revised comment from your cross-posted blog at the URL below.
    I took time to fix mistakes while adding some additional information.

    http://blog.broadband.gov/?entryId=477720&#respond

  3. Scott says:

    The caps by cables companies like GCI in Alaska are exactly the blatent types of market abuse occuring in States across america in these virtual monopolies.

    With Telco's unable to compete with outdated systems, and Cable co's running unchecked they're exploiting their dominance by instituting capped bandwidth allowances so their TV service divisions are protected from IP based competition.

    With limited bandwidth caps there's no way for internet based streaming video service to compete, let alone co-exist with the cable co's, even companies such as NetFlix that only try to supplement video programming with back inventory of old programming won't be able to provider their service when it costs customers $4-5 per show in bandwidth overages to even view them.

    Customers will also be unable to use services like Mozy and Carbonite to backup their computers online as the bandwidth usage will easily exceed any allowance their Cable Co. gives them, unless the various companies strike a "deal" with the major Cable Providers to "allow" their traffic to bypass the caps or the providers launch their own co-branded service giving it preference to bypass the caps.

    This is only going to get worse before it gets better if the market is allowed to continue on this way. The cable companies still continue to be allowed to consolidate and merge paying as much as $5000 per customer, obviously with the intention of recouping those costs somehow, all the while making the point to only take over areas that don't compete with existing providers.

    As broadband and the internet has become a vital utility it needs to be regulated as such, American consumers deserve better, we deserve fair and competitive internet service.

  4. Spencer says:

    Hey there.

    I live in AK, and for two years was with GCI under their Ultimate Extreme package, primarily for the unlimited data internet. It was great while it lasted, even though the whole bundle cost me about 150 a month. After this recent change, no one got grandfathered into any sort of unlimited plan... so I upgraded to the 15Mbit / 75GB data cap thinking that could be enough. I used up 75GB in 10 days with NetFlix and other downloads.... Needless to say, I was upset, and cancelled the entire plan.

    When I talked to a representative, they told me that a small percentage (5%) was using way more bandwidth than everyone else (around 250GB a month) and they put this in place to make it "fair for everyone." I responded with if it is just 5% using that much, why make everyone else pay the price? They didn't have an anwser except some canned jargon, telling me 95% of customers don't use over 50GB a month... Frankly I don't buy that for one second. If you go over the limit, a sales rep. calls you and suggest that you upgrade to a more expensive plan with a higher data cap. It's a joke, and just another way for them to squeeze their customers for more money. Oh and if you don't upgrade, you get charged $5 / GB you go over.... so one NetFlix movie... oh, lets see, $40, for one showing? Get real.

    Luckily, my mobile phone with them has unlimited data transfer, and I'm locked into a 2 year contract with them which allows PC tethering. So I'm going to use the hell out of that as my main broadband connection for a while. It runs about 1.5Mbit average and streams movies just fine.

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