Unlock stock picks and a broker-level newsfeed that powers Wall Street.

FCC study shows DSL is terrible, but it doesn’t have to be

The Federal Communications Commission’s sixth annual “Measuring Broadband America” report wastes little time in reminding phone-based digital-subscriber-line (DSL) technology subscribers that they’re stuck in the slow lane. Still.

“Average DSL speeds have increased only slightly over these years,” the Dec. 1 report states. The result: In peak evening hours, DSL averaged 11.4 megabits per second, which is far below the FCC’s 25-Mbps threshold for broadband that President Obama has called not a luxury but “a necessity.” Cable and fiber-optic broadband, meanwhile, shot past DSL at 52.3 Mbps and 52.22 Mbps.

And that DSL figure overstates the speeds you’ll likely get from the largest providers. At AT&T (T), the service tops out at 6 Mbps, which the FCC study found yielded peak-time mean download speeds of 4.26 Mbps. Verizon (VZ) sells faster tiers, up to 15 Mbps, but so few get them that its 3 Mbps service was the fastest to show up in the FCC numbers—with peak-time mean downloads of 2.22 Mbps.

Why cable wins

Cable in particular has not just outstripped DSL but keeps getting faster. As the FCC study noted, the median cable download speed has increased by 47% annually over the six years the commission has been conducting these studies.

That reflects some of the built-in advantages of cable: The wires themselves don’t need to be upgraded to deliver faster speeds, and they already reach an overwhelming majority of homes.

Sure, the copper phone lines that carry DSL reach even more homes than cable, but the maximum speeds they can reach fade with distance. “The farther away the customer is from the source of the signal, the lower the bandwidth he gets,” Diffraction Analysis CEO Benoît Felten explained via email.

What’s more, DSL connections aren’t easy to upgrade — especially over long distances. As a result, many large telecom firms decided that wireless broadband made a better target for their investments.

“It’s not the physics, it’s the finance,” said Reed Hundt, who oversaw the FCC from 1993 to 1997, the same time DSL emerged as the first mass-market broadband. “The highest and best use of their capital was to put it into their wireless.”

Verizon was one exception — for a time. It launched its Fios fiber-optic service as a complete replacement for its copper phone lines but then halted its expansion into new markets in 2010, suggesting that securing video franchises from cities and counties to offer TV service had become too much of a burden. It’s only relented in one market: Boston, where years of lobbying by city officials (with an assist by New England Patriots owner Robert Kraft) persuaded the company to begin a buildout in Boston last spring that finally saw Fios go on sale there in early December.