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US Broadband ISPs Expect Price Cuts
prostoalex writes "US broadband providers are trying to avoid the price wars, but the cost of DSL and cable hookups is still headed down with major promotions from players like Comcast and Yahoo/SBC. Currently there are 22 million US subscribers, 2 million of which subscribed during the past three months. It looks like the prices for broadband Internet are headed towards $20-30/month range, although most operators prefer to lock you into a yearly contract or provide special price for the first several months only."
My employer subsidizes up to $30/month for online access, so the cable internet cost isn't as painful as it otherwise would be. But the idea that price wars with the CLECs would drive cable internet prices down seems ludicrous, at least in this market (NJ).
Heck, considering that when I moved to my current house (end of 1998), Cablevision promised broadband within 6 months, and kept making that promise every few months for 2 years, I was grateful to have broadband in the first place! And that's what they must count on. Competition from another cable company, if not Verizon, would be nice. But the market tanked just as a competitor was considering jumping in.
Mencken had it right. So glad that's old news.
If the average John Q. Public didn't have, or didn't think of getting broadband, I think this is going to be a major boost for them. I can imagine this effecting the majority of "average users" seeing the price drop on broadband, and wanting to get that faster internet connection, this may very well be an excellent incentive for them to upgrade to broadband.
I'm also personally excited about this, because of my tight budget, I just may be able to afford the beautiful broadband connection once again (I know cable broadband is available in my area, at least). I hope most, if not all broadband providers hop on this train, and they all lower their prices to something more affordable.
YOU'RE WINNER !
Another lame blog
Its hard to figure out what has caused the difference. Is there more competition here ? I read once about a price cap. The lack of competition in the US may appear to be the most liekly answer.
Here in good ole Canada, the price for cable here is around 50 bucks, and if SOCAN have their way it will probably go up even more. Instead of going forward we are going backward and soon broadband will not be accessible to everyone. Sad really.
I decided needed high upload rates, so I'm shelling out ~$200/month for business cable. There's no clause against servers, and I get the super-secret phone number where a REAL PERSON actually answers. But it also is quite painful to the toy budget.
I hope they manage to continue developing the infrastructure for the technology. Otherwise, we're going to end up with so many cable modems per node that there won't be appreciable speed differences between cable and dialup during peak usage times. If the demand increases, but they refuse to continue to create infrastructure due to the new, lower pricing, people will be faced with higher-than-dialup fees for not much more real speed.
Brandband prices have dropped in my area as more companies has started offerring the service. i was paying $50 for cable modem. After a while that dropped to $35.
Verizon came in and started offerring DSL @ 34.95 + a free modem. I switched.
a few months later verizon actually dropped our price another five dollars plus... Now paying $29 and change for 768/256. not bad, eh?
Or maybe Korea has a much higher population density (just assuming)? But actually yes, the South Korean government was involved because they wanted to get a piece of the high tech pie and were willing to spend on it, so more power to them. But that you can run fiber to an apartment and then have 50-200 people share that bandwidth is a lot more economical than options for broadband deployment in the United States. Only a handful of U.S. cities have the kind of population density to make that kind of deployment profitable, but heaven forbid you give the people of Manhattan or downtown Cincinnati better deals on broadband then the same people in some shitty third-teir suburb..
It is sad that we never got any real local competition. Big business improverishes society. The only way to have any meaningful competition is with hundreds of thousands of small companies.
I suspect that in the next several years we will see an occasional token drop in published prices, while the big boys pull games to control usage and line their pockets with hidden fees.
The first part of the internet revolution was dominated by the shear technical challenge of getting people wired to the Internet. I suspect this new phase will be about marketers trying to find clever ways to corral all of profits from the technology into the smallest number of hands possible.
...my current DSL ISP keeps its prices where they are and can therefore stay in business.
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
Sweden, for some very strage reason, has three providers offering symmetrical, 10 Mbps or bigger connections for less than 65 USD a month. I'm not a swede, and don't have information in English, but you should be able to decipher what matters here. The yellow box below the headline has the speeds and prices. One Swedish krona is roughly 13.5 US cents, prices are per month and anslutningsavgift is the one-time hookup fee.
As you can see in the Aftonbladet article, Telia has just entered the fray. They were literally forced to do so, by competition from Bredbandsbolaget and Bostream.
Bredbandsbolaget, apparently not content with losing their edge (their connections are generally considered better than Bostream's, dispite the bandwidth advertised), are preparing to roll out a 100 Mbps service next year, with a 300GB/mo traffic limit, rumored to cost in the neighbourhood of 120 USD/mo; I wonder how people will survive such terribly restrictive limits, heh.
In most urban scenarios, there isn't any divide and conquer going on. Having many providers competing in the same areas has its advantages.
I've never even been to Sweden, but happen to know a lot of Swedish netizens. Most of those are hard-core gamers, the most demanding users you'll find; anything short of 1MB/sec downloads and 10ms latency domestically, and they'll be screaming.
We are a DSL provider. I know what Verizon charges us for a 768/128 DSL. If we charged $30/month for a 768k DSL circuit, we would be loosing about $8/month. This does not even take into account support costs, our link to Verizon, or our bandwidth from our upstream providers.
For a broadband ISP to make money by selling DSL, they need to either own the network themselves (ie Verizon, SBC, CLEC's, etc) or have major quantities of customers to get any type of discount from the ILEC/CLEC.
Luckily our broadband wireless lets us provide a decent broadband product at a decent price and actually make a bit of money off of it.
...for DSL at $27/mo. If only SBC's pre-sales would actually answer my questions via email.
My wife spoke to a salesrep who claimed a bunch of shit that was against what is/was in the TOS/AUP. When I emailed to get someone from presales to answer some questions to clear this up, the twits it got routed to kept wanting me to call some 800#.
Uhm, hello? Its one thing to promise WTF you want to me over the phone. Give me 30 days to test the service vs. RR, a way to drop your service without having to pay through the nose if I think its shit, and put all of it in writing.
At least with RR I can drop them at any time without a penalty. Until the DSL providers start offering this ability, people like me will stay with RR. I just hope that if the prices continue to drop for DSL (or stay way down) RR will have to come down too.
Cruising the internet on my TI-99/4A @ a whopping 300 baud!
The telcos still have a major problem with selling and deploying DSL. Their copper wire infrastructure sucks and they aren't interested in doing anything, especially spending money, to improve it.
That's because the phone companies have no incentive to improve it. The cable companies do.
Why? Simple. Competition.
The cable companies have a monopoly. They're the only ones providing cable service in an area (this is true virtually everywhere in the US -- I don't want to hear from the 0.1% of the US that actually has competition -- you're the exception, and I bet that will disappear in the next decade too) and they don't have to provide access to their cable farms. If they decide to wire an area for "advanced cable" (digital cable, high speed internet, phone over cable) then they don't have to let anyone else resell the service over their wires.
Phone companies, on the other hand, have to provide access to any ISP at "fair and reasonable" prices. And they're required to have a Chinese Wall between the local phone service company and the high speed internet company. They have to charge the external companies the same amount per line as they charge internal companies, which basically means they have to pick who gets to be profitable. There have been further restrictions on this too, but the FCC keeps playing with the regulations and I lost track long ago.
What it boils down to, however, is that in order to provide DSL service in an area the phone company may need to spend hundreds of thousands of dollars upgrading the CO and the lines to residential customers. And they may never be able to recoup the money because the PSCs/PUCs and Federal regulations prevent them from charging those costs to customers -- internal or external. It's one of the things that's caused the telecomm market to go into the shitter -- telco's aren't willing to drop money on upgrading the system because they're regulated against recouping that money in a reasonable time frame.
That said, I'm all for competition in the local phone and internet service market. But I'm pretty sure that the current system isn't the right way to go, at least not if we want to speed up transition to more modern equipment and technologies.
And don't go off crying and pointing at how much the Baby Bell's make either. Let's be perfectly honest -- a good bit of their income is from charging exorbitant rates because they're essentially a monopoly provider (mostly to businesses; residential is a smaller percentage of their income and in rural areas it's a loss center). If they upgrade their systems and allow competition in the rates will fall. You want them to expend huge amounts of money in order to cut their own throats? Do you pay to be mugged too?
i have dsl through a local company that does dsl and dialup. $60/month. this included 4 static addresses.
bell was $50 for 1 dynamic address and (i think) $129 for 1 static. and way out of control for more than one static ip.
adelphia (cabletv) was $50 for 1 dynamic, $150 for 1 static address and *another* $150 if you needed another (one address per cable!)
bell jumped out with teeth and claws a short time ago. i had a (bell) customer with 5 regular lines and they were paying 225/month. bell offered them 5 lines and dsl for 195/month. something smells here, but i asked all the questions. it will be interesting to see if they can maintain a reasonable data rate...
*i* think they (bell) were afraid of adelphia and not the 'other' dsl providers. i think also it's a hook to keep customers on land lines. ya gotta have copper (or fiber) to have dsl. this may also be to keep people from moving that number to cell phone.
eric
this ought to be interesting.
I know a group of people who spent a great deal of time tring to access NetZero's dialup service without their software.
We spent months working at it.
Currently netzero employs a sofisticated password encryption and rotating username prefix along with a 2nd level web authorization data that is passed to the netzero webservers at logon.
All this hiding is due to the fact they were a 'free' ISP, and wanted people to use their lame advertising bar. Their $9.95 services seems like a semi-decent idea, but its not, you're still forced to use the software with obtrusive 'surfing bar' Back in the day we could directly connect using a standard PPP protocal with simple usernames and passwords, but no more.
Their program appears to be largly written in java , however, so you could probably try to meddle with that and run it such that it uses linux's API rather than windows'
Good luck.
You can find better deals at $10 a month that don't so seriously stink at restricting you.
However, having said that I don't exactly understand how multiple ISP down cable lines works out. My broadband is branded Earthlink. But the bill comes from Time Warner. Does this mean that if I wanted to switch from Earthlink to RoadRunner, for example, and take advantage of a 'introductory special' I wouldn't be able to do so because I am already effectively using RoadRunner? Does anyone have experience of switching ISP's on Time Warner Cables' network? Also, does TWC often leave the TV signal on when turning on an 'Internet-Only' service?
Mark.
They're up to $52 a month. It's a great connection but how high will the price go?
I don't know what your speeds are but I had a non-artificially capped 640/256Kbit business DSL line for $70 a month. Cox wanted to charge $200 or so for a line that was only 50% faster up and artificially capped. Since I was (and still am) running a very large web-site it's the upstream speed that matters. Cox also caps the upload amount at a rediculous 7.5GB. Compare that to the 50GB+ I was doing with my DSL line. It was nearly saturated when I went to colo.
Qwest couldn't get me a faster line either due to my distance to the telco.
I now pay $175 a month for 30GB of transfer (+$2 per GB over) for a 10Mbit colo line at the ISP I had the DSL account through. I've had to All Access Pass more to keep the transfer amounts down but I'm working on alternate ways to bring in funds so I can open it up a bit.
I also switched my home internet connection to Cox (and got digital telephone) since Cox is a better deal for typical internet use.
If you're running a server you may want to consider that road. Colo packages tend to be cheaper and far faster.
I use a custom version of WinVNC so it's not too terrible maintaining it. Having the server physically accessible 24/7 was nice.
Ben
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