Why Can’t I Get More Than One Internet Option at My Address? The Untold Story of Internet Monopolies in the US

You know the drill. It’s time to find a new internet service provider, but you only have one or two options, and neither sounds appealing. You’ve heard the woes from friends who signed up with Spectrum and were surprised by two price increases within the same year, and there’s a good chance that Spectrum is one of the two options available at your address. So what can you do?

Let’s do a little research

If you type your address into the Federal Communication Commission’s broadband map, you can pull up a list of seven to 10 internet providers, each one an alternative to Spectrum if that’s a provider you’re trying to avoid. But let’s say you’re trying to stick to a high-speed internet option. Maybe you have a nice smart TV you use for streaming in 4K or a roommate who games religiously in their room. Whatever the reason, a good rule of thumb is to aim for speeds of 500 megabits per second or higher for above-average internet usage.

The FCC defines “broadband” as an internet connection with speeds of 100Mbps down and 20Mbps up. Using that definition, go back to the FCC broadband map and rule out each provider with speeds of 100Mbps or less. Why? Even though an ISP advertises that speed, you probably won’t get it consistently because of how your router and Wi-Fi work.

For most people, at this stage in internet shopping, there are only one to three decent options left, and if one of them isn’t Spectrum, it’s probably AT&T, Cox, T-Mobile Home Internet or Xfinity.

At this point, your head is probably spinning. Why is shopping for internet providers such a headache? Why can’t you get more than one decent option at your address?

Introducing internet monopolies

According to data collected by the Institute for Local Self-Reliance in 2020, approximately 83 million Americans have access to the internet through a single internet provider.

Only a handful of big companies dominate the US internet industry. Due to high infrastructure costs, it’s very expensive for smaller businesses to get a foot in the door, a phenomenon known as a natural monopoly. What does that mean for you? Since you likely only have one or two options for internet at your address, your internet provider can keep inflating your monthly bill and you can’t really do anything about it.

There are approximately 14 major ISPs that have a national availability equal to or greater than 2%, according to data from the FCC. Of these 14, Spectrum ranks fourth, with about 30% coverage, making it the second-largest cable provider in the country after Xfinity.

While I don’t personally have anything against Spectrum (and CNET ranks it as one of the better cable ISPs out there), there are some who do. The leading cause of those frustrations is usually price increases. It’s frustrating not only because your bill increases while your speeds remain the same but also because not having another internet option means you can’t really switch.

Although there are thousands of local internet providers, our options usually boil down to one or two of the top 14 providers in the country. Admittedly, CNET often reviews those top providers and may recommend several of them as viable internet options, primarily because big-name providers offer the most cost-efficient deals compared to plans from local ISPs, which are typically DSL or fixed wireless options with much slower speeds targeted to rural homes.

People who live in rural areas have even more limited options, usually having to fall back on the slow speeds and high costs of satellite internet. Even in urban areas, which typically have higher concentrations of internet serviceability, some neighborhoods may see much slower speeds and fewer options at their address than a neighborhood across town.

You may find it surprising that the high cost of the internet in the US isn’t necessarily replicated in other countries. The average cost of internet service in the UK sits at around $30, while the US averages $63 in monthly internet costs, not including hidden fees, equipment costs and those yearly price hikes.

Why the difference in the US?

Researchers point to the concentration of US markets in comparison to the UK, noting that from both a consumer and investor perspective, the concentrated telecommunication industry warrants high internet costs and low capital expenditure.

The size of internet companies like AT&T, Google, Verizon and T-Mobile is staggering when you consider not only how sizable their footprints are but also how much of the infrastructure (from undersea cables to fiber networks) they own. Although there are countless other local providers, most have to pay a network fee to larger providers that may control the “middle mile” or backbone of the internet network.

Since smaller ISPs pay more to maintain a network, the costs of internet services are usually higher, making that entry-level $50 monthly internet fee from Spectrum or $35 monthly fee from Xfinity all the more appealing. According to data from the ILSR from 2020, Xfinity was the only internet option for approximately 22 million people, Spectrum was the only choice for 24 million people and 1 million people only had access to the internet from AT&T.

Due to the high costs of implementing internet infrastructure, it’s easier for those bigger companies to buy out another company and merge their networks than to build out a new network. For example, Verizon purchased Frontier Fiber earlier this year in an attempt to expand its Verizon Fios fiber internet brand. Brightspeed edged into the playing field by buying parts of CenturyLink’s DSL network in 2022 and Charter (Spectrum) bought Time Warner Cable in 2016.

Fixed wireless internet services might make a difference

So far, we’ve mostly discussed wired internet services, which are tricky networks to establish because of zoning, equipment and labor costs. What about other internet connection types, like satellite or 5G home internet? Although a fixed wireless internet service is generally touted as a solution to broadband accessibility, since it’s easier to establish than a wired network, there are only a handful of big companies that dominate the fixed wireless internet market, namely, Starlink, T-Mobile and Verizon.

Starlink, which edged into the satellite internet market in 2020, established itself as a top name in satellite internet by deploying roughly 6,000 low-Earth-orbit satellites and offering speeds up to 220Mbps and relatively low latency (the time it takes for data to get to the server and back). In contrast, competitors Hughesnet and Viasat fall behind with speeds that top out at 100 and 150Mbps, respectively.

T-Mobile presents a popular alternative to rural internet with its network of high-powered cell sites and licensed 5G frequencies. To date, T-Mobile has the largest footprint of any single US internet provider, thanks to the reach of those frequencies.

The catch? Starlink costs roughly $120 a month, not including the hefty up-front cost of satellite equipment, which costs $349. By comparison, T-Mobile offers a much more competitive price. For $50 monthly, you can get speeds typically around 72 to 245Mbps. There’s no equipment rental charge, just the $35 activation fee you pay when you start service. But although both Starlink and T-Mobile are popular choices for people with limited internet access, neither provider can offer a consistent speed of 500Mbps over a fixed wireless internet connection, which is why although neither provider enforces a data cap, your speeds will likely be throttled during peak congestion periods. You won’t see the quick, consistent gigabit speeds that you’d get from a cable or fiber internet provider (or at least not yet).

What does this all mean for you and me?

So, what’s being done to ease internet connectivity and affordability? How can we ensure that people have more than one or two options for internet service and that the costs of that internet stay low?

No one really has the answers yet. Since the ILSR published their findings on telecom and cable internet monopolies, Congress portioned $90 billion towards bridging the digital divide. That money was split among various groups, including the Tribal Connectivity Program, but most of it has been funneled into the Broadband Equity Access and Deployment Program — the largest investment that the federal government has made in internet accessibility. So far, BEAD funding has become tangled with competing interests about how best to use it — including disagreements with the organization tasked with administering BEAD funding, the National Telecommunications and Information Administration.

Besides, with the incumbent Trump presidency, many Republican lawmakers have urged the FCC to halt new BEAD work, while others still have promised to overhaul program efforts entirely.

While a new administration prepares to take the reins, the plight of internet monopolies, high monthly internet costs and lack of adequate connectivity still hangs in the balance. In the meantime, the most you can do to trim down your monthly internet costs is to either reduce your monthly data consumption or switch internet providers entirely, if you can.