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Report: Broadband Too Expensive For Many
An anonymous submitter writes "This AP article, citing a study from the U.S. Commerce Department, reports that "Almost all U.S. families live in areas where a high-speed Internet connection is available, but many see no compelling reason to pay extra for it." The article mentions a survey that found that "more than 70 percent of dial-up users cited cost as the main reason they aren't upgrading to faster access."" It's much like digital cable - the cable networks ratch up the price for...music channels? But broadband is a chicken - egg problem. You won't get people signing up until they see a reason, and you won't get compelling reasons until more people have signed up.
It isn't necessary for everyone to sign up for broadband before seeing a benefit from it. Rather, most users of broadband are just that, USERS. They aren't serving pages, they aren't running spam services, they are simply downloading and browsing pages. Adding more users doesn't do anything but increase demand on an already overloaded U.S. infrastructure, thus raising the cost of entry for the next guy.
The problem with broadband isn't that there aren't enough users, nor that the cost is too high. It's that the speeds are too low and getting it hooked up is too much of a pain in the ass.
The New York Times has a story claiming that Netflix ships almost as much information as the Internet does. (1500 terabytes versus 2000-4000 terabytes.) So who needs wired broadband?
The digital music channels are the *ONLY* and I do mean *ONLY* thing I use my cable TV for. So its worth it for me to get quality music choices and not have to listen to the shit on the radio.
I also believe part of the reason that people arent springing the extra bucks on high speed access is the economy. 2nd place would be the fact that most of them havent experienced it first-hand to see really how bad modem dial-up is. Sure, many people might have fast web access in the office, but not everyone does.
siri
It is much more expensive to get broadband in some places than others. I would be interested to see these results accoording to geographic location. Here in Atlanta, getting good DSL or cable modem service is not that expensive...in fact it costs about the same as a second phone line and dial-up service. The problem here (IMHO...) is one of availability as most people I know simply can not get it. Overall, these results do not surprise me, especially when I hear how much my friends in other states pay for broadband, it seems pretty obscene next to what I pay.
Derek Greene
many of these are the same people who are paying $25/month for AOL dial-up. Otherwise there is a large number of 'normal' people (from what i've see anyway) who use "the internet" solely for work purposes and their place of employment functions as their ISP and they therefore pay nothing monthly for the service, in which case the difference between $0.00 and $35 montly is a pretty big difference...
just what i've seen :)
-tid242
With a few exceptions, secrecy is deeply incompatible with democracy and with science. --Carl Sagan
Where I live, Comcast offers a premium service where it costs about $80 for twice the speed I currently have. The problem is they aren't look at it from my perspective. When I swwitched from dial-up to cable, I got roughly 5x better upload speed and 10x better download speed for twice what I was paying. Now that I am used to what I have, merely doubling it doesn't seem like such a big deal. Many people switched to cable/dsl because it was a no brainer. They were already paying $20 for an ISP plus $15-25 for an additional phone line. Many people actually saved money moving to cable. Why would I want premium service?
I've had a broadband connection (first DSL, then switched to cable) for about 2 years now. I would never go back. The ability to sit down at my computer and not have to worry about if someone is on the phone or if I'm going to get disconnected because it rings (or miss an important call or whatnot because I've got *70 on) coupled with the fact that checking email/light surfing (like finding movie times, bank balances, checking slashdot) takes relatively no time, as opposed to 5-10 minutes of dial in, get rejected, dial in again, load load load, log off, oops I forgot something, log back on. Also, its nice not to get disconnected out of games because your modem decided that you were online too long. =)
This is my sig. Its pathetic.
But with digital it takes 2 or three second to skim over each channel, because the redraw of the funky channel ID overlay. If I am looking for a soccer game, or a cooking show, the funky menu systems are actually much slower.
This is not an advantadge.
Point being, that digital cable has not really sold itself to me. But my high speed line has.
"It is a greater offense to steal men's labor, than their clothes"
The problem is a bit more complex than the article suggests. Cost is a big problem for me since I just moved into a new house and do not want to double my monthly costs for ISP service.
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However, there is also the fact of limited choices. I have a choice between one DSL and one Cable service available in my area. Some people only have one Cable or one DSL or even no choices in their areas. The availibility and lack of choices between providers and therefore a lack of competition also comes into play and impacts prices directly.
What if I hate my Cable provider but find they are the only ones with broadband in my area? Maybe there is no one company doing DSL in my area or that one company has a bad rep for customer service, etc...
Even in the burbs of large metro areas the choices are not dizzyingly large but dismally small.
_______________________________________________
ACK
Too expensive if you got the service you paid for? no.
Not worth it most of the time? yes.
I had AT&T @home for awhile, and I went back to my old dial-up after about a year of hassle. First came the bandwidth caps that were insanely low (16k upstream? that's almost as slow as my modem...). Then there was the gigantic amount of downtime. I probably only got 5 days of service a week. When it was up and working, I'd always lose service to huge chunks of the net at a time. After all that shoddy service, they still decide it was time for a price hike. I would have been fine with that if they'd have been doing a good job already.
I'd rather stick with my reliable and slow dial-up then get screwed in the cornhole for the price and not be able to use the service 2 days a week.
Hear that AT&T? I'll gladly pay 50 bucks a month for your service if you provide me with 7 day a week access, and institute reasonable bandwidth caps.
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if you only have one line and you just check e-mail once or twice a day and do some light web surfing
One thing that I try to impress upon people about broadband is that when you have it, you will do MORE than just check email once or twice a day, etc. In my opinion, the always-on connection is every bit as valuable as the speed. When you're always on, it suddenly makes sense to use your connection to check movie times, check headlines, check weather, get a phone number, use mapquest, and a ton of other stuff you used to do with a phone/phonebook/map/newspaper/etc.
Evil is the money of root.
What more "compelling reasons" can you add for having broadband that aren't there already?
Games? Already there, as is the incentive to switch to get ping times down. I don't see anything new and compelling coming out that absolutely requires broadband.
Audio? Streaming non-demand audio is already there (I'm listening to BBC Radio 4 as I type), and there are demand (request/playlist) streamed services. Sure, the current commercial offerings of download-and-store music suck donkey dong, but the P2P services are mature. I don't see anything new and compelling arriving, unless the big music labels open up their entire catalogues as $1 per track uncrippled mp3's (not in my lifetime, I think).
Download or stream-on-demand movies? Well, last time I checked the alt.binaries groups, pretty much everything that I demanded was already there. As for streaming, if you're getting your broadband over cable, then it makes no sense to stream a jerky little image to your 17" monitor when you could stream a smooth one to your 32" TV. In the middle ground, we seemed to be underwhelmed by the crippled 24-hour offerings that were touted here a couple of weeks back, so again we're holding our breath for uncrippled high quality download-and-store movies. But based on recent history, and with Palladium looming, I don't see the studios caving on that one.
If we're holding our breath and waiting for large distributors offering things that Joe Consumer will find genuinely tempting then we're going to go pretty blue in the face. And this content is already available, if you know where to look.
I suppose that it comes down to whether ISP's have the nerve to advertise broadband for the purposes of P2P or usenet leeching. I reckon not, but you never know.
Disclaimer: I actually don't use broadband for leeching, unless you count the occasional porn clip. I like it because it gives me immediate and constant access from my LAN, fast downloading of sources and applications, and I can (e.g.) use my linux gateway to ssh-proxy web traffic from work and bypass my employer's insane web filtering. I'm sure many readers here will be doing similar, but remember that we're not representative. Why - really - does Joe need broadband to read his AOL-mail?
If you were blocking sigs, you wouldn't have to read this.
Until they let me do whatever I want with that bandwith, including running a domain server out of my house then there's no point. I'm frankly sick of the business model being used to justify it...if you're on the internet, the fact is that all boxes should be peers. Any company providing access to web sites but not allowing you to host the same isn't providing true internet service...they're just fetching pages from the internet for you.
In SOVIET RUSSIA... erm...NSA AMERICA, the Internet logs onto YOU!
We also signed up for digital cable when Cox began offering and promoting it. We have Cox phone and cable Internet, so digital seemed like a nice thing to upgrade to.
That was until we saw the actual bill. Like the extra $8.00 phone line that actually cost $16.73 a month, digital cable came brought our combined bill to $205 per month (little things like unit rentals, taxes, fees, etc. add up). When we realized we never watched the dozen HBO channels (Sopranos looks the same on the basic HBO), only needed to see Groundhog Day once per day, digital PayPerView had the same annoying feature of starting the same movie at the same time across a half-dozen channels, we figured the only thing that was unique to digital cable was the music, and that wasn't worth an additional $100/month.
So we dropped it too.
*scoove*
Admitedly I pay more then most, I have a routed network over my dsl link and I expect to pay more for that. However in my neighboorhood most people are using dialup because of the costs of other services. Were not a poor neighboorhood, average house cost about 500K but people dont seem to want to shoulder the cost of broadband on top of an inflated mortage. Cable modems were available in the area and were only about 30 a month. Course they are asyncronous meaning out via phone and in via cable and you could order them without the cable service. They so oversold thier pipe however that they no longer issue them. One or two houses have directway dishes on them but for the most part my nieghboors are happy with thier modems and cant justify the costs of DSL to the area.
I pay for my broadband because I use it alot and I know what its like to go back to modems. Most of these folks havent been exposed or just dont need it. The problem is people dont really know if they need broadband or not and throwing out a few hundred for a dsl router and getting stuck with a year service contract with an inflated rate is not a great motivator for people to try it to find out.
--- Always remember. 99.36% of all statistics are inaccurate.
the phone companies and
cable/satellite companies.
Sure, I can switch phone companies. But I lose my phone number (still, even though they make me dial 10 digits to call my nextdoor neighbor, which was supposed to be so I could keep my phone number). But wait, for a bit more, you can block your phone number. And for a bit more, you can block people who block their phone number. But in either case, the phone company will sell your phone number to telemarketers to ensure that you do get calls that you will want to block...thus ensuring that you buy caller ID. Oh, and now they'll raise the price for caller ID, thank you very much. And if your state creates a no-call list, you'll have to pay for that too. Oh, but wait, some companies can get a state license to ignore the list you paid for and call you anyway. But you can pay for caller ID....
The phone and cable companies introduced high-speed internet, and the prices go up while the bandwidth goes down. This year's fastest processors cost the same as last year's that were slower. This year's hard drives are bigger and faster for about the same as last year's. You can have more memory cheaper than last year. But they want to you upgrade to DSL or cable-modems by paying more. But if you actually use the bandwidth, they'll adjust the prices so you have to pay more, or you get less bandwidth...not much more than dialup in the end. Oh yeah, and the basic phone bill will go up too, to cover the cost of the digital services they are now offering. And they don't even offer any package deals with an actual discount (they just put all the same chareges on one bill).
And don't get me started on cable/satellite. They raised my cable rates a few years back to pay for "improving the infrastructure" so they could "upgrade to digital cable." So now they have digital cable, but I still have to pay extra for it? I want my money back then (I guess we aren't demaning it back because we have a short memory)! And then they raise the price of basic cable again, and again, and just for good measure, again...because you know electronics equipment prices just keep skyrocketing and the number of subscribers keeps going down...oh wait.... And then have the nerve to ask why I don't want to pay more for digital cable. Besides, then I can pay even more by ordering pay-per-view!
What I wish is that I could take this offer I got for free satellite equipment and installation and then programming at $21.99/mo and the cable company would meet it (you know, the way BestBuy does with a special at Circuit City?), instead of charging me $36.99/mo for fewer analog channels. I want the convenience of analog so I don't have to have a box (and the requisite fees) for all four TVs and both VCRs, and so I can use the picture-in-picture I paid for (we already went through this box-per-TV/VCR crap with cable tuners). Plus, I don't want to look at the over-filtered, over-compressed digital crap they send to the satellites. It may be digital, but it's garbage. I'd rather look at a bit of analog noise than golf greens with no details because they were completely filtered out and the halos and distortions of too-low bitrates.
And I also wish that one of the phone companies would offer me the following package:
local phone at as significant discount with FREE features (caller ID/call waiting/call blocking)
long distance w/no fee at a low minute rate
cel phone with decent minutes for a cheap monthly rate
television for
high-speed internet for
Xesdeeni
Digital DOES offer some interesting channels like IFC, but it just isn't worth it because the extra cable box is terrible, the lag is terrible, and the picture quality is only slightly better (After the artifacting from changing the channel has gone away.). Not to mention it costs a bit more. If anything, since you need a box to use it, it should be virtually free .. Anything that has a drawback to what you currently have is bad business.
Same reason I don't have digital cable. I like to surf the channels, which digital cable doesn't allow me to do. I actually paid more for regular cable at the time. There was free install for digital. The salesperson thought I was nuts. Regular cable is fine thanks. I can change the channel without a 1.5 second delay.
Back in the early days of telecomputing, there were outfits like The Source, CompuServe, Genie, and the like. Those that survived realized that their users really wanted to get in touch with each other. Maybe they started out serving informaton, but either they wound up serving connectivity, or they died.
Except for CompuServe the rest came fairly late in the "telecomputing" market; after home BBSes and small business BBSes were quite popular. Compuserve was succcsful in selling content; since they had high quality content that no one else had (often at rates as high as $75 / hr). They also managed to get quite a lot of commercial traffic both B2C and B2B (though they weren't call that then). MCI focused heavily on genuine communication between users and they failed early.
Genie was essentially a cheap compuserve; they charged a flat fee per month rather than an hourly rate and had lower quality content but because of the high user base who wasn't worried about connect time they had good quality discussion boards. Its also important to point out Genie was not covering its real costs. Genie was using GE's mainframe -- dialup system during off hours (they charged something like $17 an hour if you used it during business hours); it would have been impossible to pay for that infastructure from genie revenue.
The closest to a service that sold low quality content, by which I mean stuff that wasn't expensive to buy the rights too, with unlimited connect was Prodigy which was fairly succesful.
And lets not forget that AOL didn't start off as an ISP. They built their market up during the last days of the BBSes.
When the internet started offering lots of content cheaply all the services started becoming ISPs. Since they were all large corporations and the internet was very uncensored they all sort of wanted to get out of the business and didn't fight very hard
Genie became pointless; though their online gaming division managed to do quite well for a few more years until sites dedicated to specific high end graphics games became popular
Prodegy was able to survive for a while but IBM and Sears lost interest
Compuserve is still around offering dialup -> corporate system connection more like MCI's market back in the 1980's.
The small business BBSes have moved onto the internet (in terms of functionality not necc. ownership).
So I don't think its quite accurate the model failed. What it showed was:
a) A small group of customers will pay a lot of money for very high quality content they can't get anywhere else
b) A large group of customers will pay a little bit of money for having lots of content even if not of particularly high quality in one place
c) Most customers won't pay anything extra regardless though they will take advantage of free throw ins and might be convertable to either class (a) or (b) if you can get them hooked (the AOL model).
I don't see how that's much different from the current internet.
Sites like the wall street journal which have unique content at a lowish price are doing terrifically. Free discussion sites like Slashdot get tons of traffic but have trouble charging for it. Sites with high end content are able to charge a lot for it to a small group but don't have wide penetration (high quality porn sites, article archives).
Long ago, I was a telecommuting independent consultant. Since I was working 40-60 hours a week from home, it made perfect sense to spend >$200/month to get always-on high-speed (well, ISDN) Internet access. After all, it only worked out to $1/hour or something like that, and it only had to save me an hour or two a month to more than pay for itself.
Contrast that with, oh, my mother. She maybe spends 4-6 hours a week on the Internet (and some of that is email, which probably shouldn't count). For $50/month, that's around $2.50/hour. On top of that, having high-speed access is merely convenient for her - it's not like she can get more work done, or bill more for her work, because she doesn't use the Internet for work.
Contrast that with cable television. My parents probably watch 20-30 hours per week, and it probably costs less than $50, and it also gives them access to things they couldn't access with an antenna in the first place. A bargain!
Ethnographic studies of some high-speed data subscribers in the Boston area support this. While high-speed was the reason that these people initially subscribed, the always-on aspect of the service caused a significant number to rearrange furniture as necessary in order to bring their PC out of the office/den and into the kitchen/family room. The PC then took on a much bigger role as an information source. For example, checking the day's weather forecast on the PC rather than listening to the radio.
I'd pay $20 a month for something above 56k but below Cable/DSL, but such a thing doesn't exist, so I'll just wait until broadband is affordable.
A view from the other side of the table...
My company provides broadband to a bunch of small towns in a part of "fly-over country." Our service is $29.95 a month, and an installation of $250 (includes equipment).
Unfortunately, there is significant pressure to hike rates. Why? Customer support costs, mostly from crummy operating system software.
One out of two installs needs substantial work due to Win95/Win98/WinME configurations with years of clutter, garbage and registry hell. Dialup optimization tools messing with MTUs, mess all over (I reinstall my Win2K annually - apparently not many other people do). Customers don't understand that system maintenance is not our problem but theirs. They're like a 5'6" tall, 500 pound human who expects to run a marathon on broadband.
Then there's the monthly "I blew away my system config - help me fix it." Many calls require a great amount of support. Yet nobody wants to pay for support - "I'm paying you for service - I expect service, even if I mess up my computer." As if GM or Ford provided warrenties for stupidity, crashes, etc...
Our Linux customers are a dream. They know how to take care of their system, and understand that config screwups, system maintenance, etc. are their issue.
High prices for broadband unfortunately appear to be a Microsoft tax. Maybe we need to approach broadband the same way:
Linux, *BSD, & Mac: $29.95/month unlimited (Mac users are slow to upgrade their OS though... half of them we run into have ancient versions.. 6.?)
Windows95/ME: Upgrade (we already tell them that today)
Win98/NT/2K/XP: add $20/month for StupidOS tax unless you sign the "Surf at your own risk" disclaimer.
*scoove*