Preventing Broadband Price-Gouging?

Wrighter the Pessimist asks: "I've been seeing a lot of stories recently about cable modem companies raising rates and baby bells winning monopolies on broadband. It seems that indeed cable companies are already raising rates, or will be in the near future. Shouldn't broadband be getting cheaper, with improvements in technology? Or has demand already surpassed the capability? Or, have the monopolies just decided to give themselves a raise? What can we as consumers do to prevent prices from going sky high?" The first article mentions the need for higher pricing for users who tend to use more than their fair share of the bandwidth. The second article is about AT&T raising its rates, which is not news to many Slashdot readers, I'm sure. I would think that in situations like this, that a tiered pricing approach might be better than applying a flat rate. Think you are going to be a high bandwidth user? Pay a fair price to your upstream. Web and e-mail only? Pay less. So do you think the current trend in broadband pricing is fair, or are broadband providers pricing themselves out of the market?

Comments

Not pricing themselves out of the market

[Jobe_br]

See, that's the thing ... they aren't pricing themselves out of the market because the DEMAND for broadband won't diminish without an alternative and these monopolies that are springing up (or mergers, if you will) are making it so that there aren't many alternatives ... at least not widely available. I'm not sure why broadband isn't treated like phone access, long distance service, etc. The competition in that sector seems to be healthy and provides for relatively fair pricing, same with mobile phone service. If a few large providers are going to be allowed to exist, broadband should become a public utility and be regulated as such. Right?!?

Re:Not pricing themselves out of the market

[jimngo]

You can't compare broadband data to landline voice or wireless voice. The landline voice system has been around since 1877 and has paid for itself many times over. The wireless network isn't as costly because a single tower can hook up hundreds of subscribers whose bandwidth requirements are pretty limited. For high bandwidth data, new, costly equipment must be installed all the way through the network, right into your home. And for that, you currently aren't paying much more than service in the other two networks. Think about it.

Demand

[Have Blue]

Demand really has surpassed capacity. Think about it, a cable modem or DSL has as much or more downstream bandwidth than a T1 costing ten times as much. They can only get away with flat-rate pricing if they can amortize it across every cable modem that shares the high-speed line they bought. MP3 programs have made bandwidth use skyrocket, to the point where too many users are downloading at the highest speed they can get 24 hours a day. The broadband companies have 3 choices here: Cap speed per user, raise the price to reduce demand, or allow the performance to decrease unreasonably when the system is over capacity. None of those options are terribly good, but option 2 is the one that will keep the company afloat.

If you want to help solve the problem yourself, stop sucking down MP3z and ISOz all the time.

Re:Repeat after me

[quantaman]

You seem to have been missing the boat on the whole M$ antitrust thing. If you have a monopoly in a sectors do you know what you get? It's sure not Capitalism, the laws might be the same but it's a whole new ball game because there is no competition. When corporations get too powerful (a point where our present system is starting to approach) it's them, not the governments, pulling the strings. What if you need the broadband but the cable provider and the telco are in bed together and charging through the roof. Competition can't get in because of the monopoly so the prices and service stay at that horrid level and you still have to buy it. Unfortunatly market forces arn't quite powerful enough to keep the big boys in line anymore and they're starting to make their own rules. I don't trust governments but I'd trust a corporation with the same power a whole lot less, at least in the end the leaders of the government are directly accountable to you and not dependent on how well they are able to force you to buy their product.

Broadband is cheap--too cheap

[jimngo]

I work for a telecom equipment manufacturer. Over nearly the past decade, the regional bells (RBOCs) and competitive local exchange carriers (CLECs) were stumbling over themselves trying to build out broadband networks, and they went deeply into debt to do so. Broadband equipment isn't cheap. Believe, I know! The current pricing scheme was based upon the internet-bubble business plan of "market share at any price." We all know how well that worked. The RBOCs and the very few remaining CLECs are bleeding very badly with broadband, so this was inevitable as competition decreased due to carriers going out of business. So, this is the future. The faster we get used to it, the faster the RBOCs will resume building out the network and the better off we will all be.

Nucking Futs!

[Arandir]

You guys are nucking futs! Price gouging? What price gouging?

Ten years ago I was paying $19.99 a month for 2400 baud access. Five years ago I was paying 25$ a month for 28.8K access. This year I am paying $49 for 1.5Mbps access. That's an awesome deal. It's like moving from a studio apartment to a ten bedroom mansion for only twice the rent.