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FCC survey shows why US consumers are scared of changing ISPs

The FCC has just come out with a working paper on when and how Americans can be tempted to move broadband suppliers

By PETER WHITE

Published: 16 December, 2010

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The FCC has just come out with a working paper on when and how Americans can be tempted to move broadband suppliers. The survey was conducted in April and the results published this week. It took the form of asking people who have not switched internet providers about their reasons for not moving, at the same time as asking those who did change supplier how the process of switching went for them.

As we all know, and this is no different in the US, it’s tough to switch broadband suppliers and some 62% have never done so, at least not in the last three years. Of the remaining 38%, some 23% have only switched once in this timeframe, and just 13% have switched more than once. Not quite sure what happened to the other 2%.

Clearly there is a high correlation between moving broadband suppliers and moving home, with 43% of those who had switched also moving residences within the same three year period. In many cases moving home would take you outside of your service supplier’s ambit, and you would HAVE to change supplier, but similarly if you are going to experience broadband service disruption, you might as well take a fresh look at who is competitive in the market.

Probably the most worrying thing in all of this is that from the people who have NOT changed ISP 69% say they have not even considered it. Is this true of choice of car? Shaving cream or TV manufacturer? We suspect not. There are just too many reasons, mostly inconvenience reasons, for not changing supplier.

When asked about things that might keep them from switching service, broadband users with the choice of more than one provider in their area say they were mostly put off moving by set up installations fees, the pure hassle of ordering and waiting for the service, deposits, bundle knock on affects and changing their email address. Others were aware that they would have to pay early contract termination fees.

So why would the FCC hold such a survey? Well to us that’s pretty obvious. Creating broadband competition in the US is tough and there clearly isn’t enough of it. In other parts of the world regulators have done a lot to reduce these “drag” reasons for not moving supplier, making it so you can make the change swiftly and without interruption in service, for instance by providing a special switch code for each transaction that is a shared identity for the customer across two suppliers. Other moves involve ensuring transparency in punitive charging mechanisms and when contracts expire.

It looks to us like this will form the basis of US regulation on making broadband more competitive, something that will be needed to go hand in hand with new broadband options as the Broadband Stimulus package comes towards fruition in the creation of new services.

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