Consumers suffer from geographic lottery for broadband, new studies reveal

Date: Thu, 03/27/2014 - 22:36 Source: EC press department

Europe’s 400 million Internet users face a geographic lottery regarding the price, speed, and range of choice of broadband – according to EU data released this week
Consumers suffer from geographic lottery for broadband, new studies reveal European Commission Vice-President Neelie Kroes

Four studies published this week show there is virtually no pattern or coherence in broadband markets across the EU. Consumers are also baffled by the varying information provided by operators, limiting their ability to make the choice that best suits them.

• Prices for the most common broadband connections can be up to four times higher in some Member States, even after a purchasing power is taken into account
• 66% of people do not know what Internet speed they have signed up for.
• Consumers only get 75% of the broadband speed they sign up for, on average

While successive waves of telecoms sector reform by the European Union have helped transform the way telecoms services are delivered in the EU, the sector still operates largely on the basis of 28 national markets. Both customers and operators face differing prices and rules. The European Parliament next week will vote on the Commission’s plans for a #ConnectedContinent which address these problems by offering consumers more transparency, more rights and better services.

Massive price differences for #broadband
• Karolina, 35, is moving from Lithuania to Poland. She will pay at least double in her new home for a similar quality broadband service. She could pay up to 14 times more.
• Peter, 65, is retiring to Cyprus from United Kingdom. He will pay between two and four times more for what is probably a slower connection.
• Carlos is moving back to his home town in Spain from France. He will have to shop around carefully since Spanish broadband prices can be up to 50% higher than he is currently paying.

European Commission Vice-President @NeelieKroesEU said: "There is no single market for internet and that has to change. There is no good reason why one person should pay over 4 times more than another in Europe for the same broadband.”
Today’s new study shows up to 400% price difference between EU countries in advertised broadband offers in the 12-30 Megabits per second (Mbps) category of fixed broadband that most Europeans subscribe to. Prices start from €10 to €46 per month, depending on where you live, and could be as high as €140 per month.

Price contrasts: the cheapest advertised broadband is available in Lithuania (from €10.30), Romania (from €11.20) and Latvia (from €14.60); in other countries, the lowest available offer can be as high as €46.20 (Cyprus), with Spain (€38.70) and Ireland (€31.40) not far behind. The biggest domestic price range is in Poland, with offers ranging from €20 up to €140, and Croatia – from €30 up to €121.

While some differences between markets can be explained by different underlying costs and incomes, much of today’s inconsistency is due to persistent market fragmentation. The #ConnectedContinent will help overcome these price differences by giving greater power to consumers and a friendlier environment for investors across the EU Single Market, allowing efficient operators to sell their services to consumers in other countries.

Understanding what you get when you buy broadband
• Anna has moved out of her parents' home and she needs an Internet connection. She researches what is on offer, but she finds it hard to compare the options. Once she eventually makes a choice, the connection is often slower than she expected.
• Thomas was attracted by the "up to 30 Mbps" download speed advertised in his neighbourhood. He signed up for 12 months but the actual speed he receives is 22 Mbps, not 30.

Another study, by @SamKnows, took more than 7 billion measurements of the Internet connections of nearly 10,000 volunteers and found actual download speeds can be as little as 64% of what is advertised.

European Commission Vice-President @NeelieKroesEU said: “While underlying networks are improving, the gap between advertised and actual speeds is as wide as in 2012. This confirms the need to strengthen and harmonise consumer rights as proposed in our Connected Continent package.”
“And it is time for companies to work together to find better ways to advertise and explain their products. That’s the reaction to these findings that I am hoping for.”
The proposed #ConnectedContinent reforms will bring new rights, such as the right to plain language contracts with more comparable information. In particular operators will have to provide accurate information about the actually available data speed. Consumers will have greater rights to switch provider or contract, the right to walk away from your contract if promised Internet speeds are not delivered, and the right to have emails forwarded to a new email address after switching Internet provider.

Volunteers needed:
@SamKnows will run until end 2014 and one more annual measurement is planned. European consumers can measure their own ISPs performance by joining a community of volunteers across all EU28 countries plus Iceland and Norway. Selected consumers will be sent a small device to plug into their home Internet connection. This device will run a series of automated tests when the line is not in use. It will establish the speed and performance of their broadband connection.

Background on the four studies.
1. BIAC study
The European Commission is publishing a 2013 comparative study on Broadband Internet Access Costs (BIAC) that was conducted in all EU Member States, as well as in Canada, Iceland, Japan, South Korea, Liechtenstein, FYRoM, Norway, California, Colorado, New York State, Switzerland and Turkey. It is based mainly on information collected in the period between February 1st and 15th, 2013. The study analysed the offers of ISPs. Where appropriate, the information for this period has been compared with similar information that was previously collected in February 2011 and February 2012.

2. @SamKnows study
This study made by @SamKnows for the European Commission measures the difference between the Internet speed you pay for and the internet speed you get. The results are based on peak time performance, which is defined as weekdays 7:00pm to 11:00pm (inclusive). This is the second @SamKnows study (with a third study planned in 2014).
It is based on a methodology that uses hardware devices and provides the most accurate and independent results of Internet performance regardless of access technology and home installation. This methodology has also been used by national regulators in the US, the UK, Brazil and Singapore.
9,467 devices spread across 30 countries took a total of 7,184,604,603 measurements as part of 63,666,843 unique tests.
The second report was completed independently of Internet Service Providers (ISPs), however ISPs are invited to participate in third report.

3. Eurobarometer Survey
The Eurobarometer survey measures user perceptions of telecoms services in all EU member states in February 2014.

4. COCOM Report
The Commission is publishing data on the number of broadband subscriptions in Member States gathered in the context of the Communications Committee (COCOM). The report relies on data collected from relevant ministries and regulatory authorities and other broadband-related statistics published by the Commission (data on coverage, retail and wholesale prices and the broadband state aid cases).

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