Are AT&T and Verizon Overcharging DSL Customers for Slower Service?

Do customers actually get what they pay for? When it comes to broadband services, customers in rural and underserved urban markets are definitely getting much less.

A report published by the National Digital Inclusion Alliance (NDIA), a broadband advocacy group, concludes that in recent years, AT&T and Verizon charge almost the same rate for DSL service as they do for high-speed fiber services.

In the past, Internet Service Providers offered “tiered” rates for their internet access which meant that customers were offered lower rates for slower service. However, recently, ISPs have engaged in “tier flattening” by eliminating their cheaper rate tiers for low and mid-speed internet access, with the exception of their slowest speed access. A quick look at Verizon and AT&T’s rates shows that “Each company now charges essentially identical monthly prices – $63-$65 a month after first- year discounts have ended – for home wireline broadband connections at almost any speed up to 100/100 Mbps fiber service.”

According to NDIA’s report, “tier flattening” increases the cost of Internet access in areas where the infrastructure is old and slow. The report argues that neither company, which are essentially the only Internet providers in these areas, are refusing to upgrade the infrastructure. This “victimizes millions of underserved households.” They conclude that, “Affordability is the greatest barrier to increased home broadband subscriptions. In the United States, broadband is becoming faster for some households and more expensive for others.”

In a statement to Ars Technica, AT&T denied that their prices were unfair. “Attempting to assess internet service offerings by only looking at standard rates does not give a complete picture; the internet service market is more competitive than ever and most customers make their purchases at bundled and discounted rates,” according to the company.

Both AT&T and Verizon state that some areas with a small population do not justify deployment of fiber. In those areas, both companies continue to provide DSL networks which are more expensive to maintain. Unfortunately, the economics don’t work in consumers’ favor. The smaller population and higher cost of maintenance means higher prices for customers. NDIA asserts that Internet providers that cannot upgrade the speed of internet access in these communities should offer lower rates since their investment in these communities has been minimal. Unfortunately, like most corporate giants, consumer satisfaction takes a backseat to enormous profit. According to NDIA, “both companies seem bent on extracting as much profit as possible from their lower-speed customers.”

Unfair practices by corporate giants is why companies like Billshark make it their mission to advocate for consumers. The Sharks are there to level the playing field and we’d be happy to take a bite out of your Internet bill.