Why Is Internet Service In The US Overpriced?

Let’s be honest here- it is what it is. Americans have been paying double the amount of money at times for receiving faster internet speed as compared to the European countries. This does raise an eyebrow as to why is that so. America is one of the most developed countries in the world and yet the internet seems to be much overpriced here when compared with the remaining parts of the world. With the advancement of technology and infrastructure, a necessity like the internet should be available at more affordable rates. But on the whole, we do not see that happening much. Except for some trustworthy internet and cable providers like Mediacom cable, Spectrum cable, or Cox cable services that ensure the provision of high-quality service at lower prices than we normally see in the market, we see a general trend of rising cable bills all around. Let us dig in deeper as to what could be the potential reasons behind the overpriced internet services in America.

Why Americans Have To Pay More?

One of the main reasons could be less competition than usual. Though there are plenty of noticeable internet provider in America they are not as many as there should be to pose a tough competition in the industry. If we look around ourselves, we find a handful of choices. It might seem hard to believe but generally speaking, for most of the providers, the answer might be just two or three providers offering services in their area. So limited choices to some extent do result in more costly internet plans. With the lack of real competition missing, providers do not find any urge to cut down their internet plans price tags or offer promising discounts since they do not need to do that. They are well aware of the fact that their potential customers might not have too many choices available around them.

What Is The Root Cause Of The Lack Of Competition?

You might be wondering why a lack of real competition among internet service providers is when we are talking about the millions of users and countless states. Well, one of the prime reasons is the transmission lines and infrastructure owned by the cable companies. This comes with a lot of investment and generally, we see one or two cable companies having their infrastructure set up in a given area. It would require a huge investment for a new company to establish its transmission lines and take time to make an impact on the already predominated market.

Massive Investments

ISPs require enormous investments to start functioning in an area along with making through the legal aspects for permits and construction. So it is not as easy as it seems. Since the initial cost is much higher, fewer investors are willing to wait patiently for years before they start generating revenues from the investment they made in a cable company. Thus it results in poorly competitive markets in the United States.

What Can Be Done?

The fact remains that nothing much can be done. Also, we see lobbyists working their part in the telecommunication industry. Thus there is no magic wand to wave around and get the internet prices down. However, government officials are trying to work in this area. What we can do on our part is to elect officials who are eligible to do efforts in improving such issues. It seems to be a long journey until there comes a time when the internet will be cheaper for all Americans. Let’s not forget to appreciate the cable providers who are concerned about offering better internet and cable TV services at more affordable rates to facilitate their users as much as they can.

The Bottom Line

The lack of healthy competition is one of the main reasons for the overly priced internet services across America. There are not many ISPs available for millions of users that ultimately leads to a poorly competitive market and more expensive internet plans. Also, the massive investments required by the ISPs to start functioning in an area is a major obstacle towards them being operational. This also leads to a comparatively fewer number of ISPs offering more costly internet packages and products in America.