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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.
For us who live in Europe!
And AOL dialup will still cost $24.99 a month.
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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.
I get 1500/128 service from SBC now for $29/mo with no price increase later. It's only specced for 768 down, but apparently they simply let the modem connect at its highest speed. Futhermore, they gave us an ADSL modem/router with both ethernet and wireless (and power line) routing built in.
I would like higher upload, but that's where the kicker is. Most people don't need it, and they can sell hosting services (ie, sell the upload and download seperately - double your money)
I imagine that it'll continue to drop as equipment becomes standard and they don't need to keep buying new equipment. Startup costs for the infrastructure and advertising are what caused the initial high prices. Now that the infrastructure is in place, you'll see more advertising about lower prices and better deals.
-Adam
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 have dial-up at home, and the reason is that I don't want to sign a 1 year contract. I want to connect to the net with linux, but cannot as I am using netzero.
I contacted them to find out if they will support linux soon and here is their response.
NetZero is involved in a partnership with ThinkNIC to offer a Linux version of the NetZero software on the ThinkNIC machine. Currently, we do not have a downloadable version available for Linux, but please check back on our Web site at http://www.netzero.com for updates.
If you lost your job today, don't despair. You may die tomorrow anyway.
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.
SBC promises download speeds as fast 1.5 megabits per second - one megabit is 1,000 kilobits - ...
Way to break down megabits per second into something the average person can understand, David Koenig. I guess you're trying to compare 56kbps to 1.5mbps, but still, how many people reading IWon News know what a kilobit is? Why don't you say "1.5 megabits per second means 1 megabyte takes 5.3 seconds to download"? That's something people could understand.
At least Libraries of Congress aren't in your conversion rate.
my blog
well... price wars typically trigger shakeouts where smaller competitors get driven out of business, so I'm glad price wars are not going ahead... small competitors making a viable go of it in the long run means increased competition.
Price wars are also typical 'testing grounds' in oligopoly situations, sometimes where one large provider tests another (that price wars are not imminent suggests providers are in perfect harmony [unlikely] or have too tight margins to risk a price war), othertimes they are coordinated attempts to show the consumer what great value they get and are more spin than substance.
Price wars are a bad thing - they cause small competitors to be driven out of business (long term this means the market in the hands of a powerful few) and the fact a company can undertake a price war means it has room to move even with discounted prices (surely bloated prices... it is in need of competition but has the 'price war' signal to any potential competition they are alert and the going will be rough).
Price wars are never a good thing.
karma karma karma karma karma chameleon, you come and go, you come and go.
I got an email the other day saying that they're upgrading my upstream for free, permanently. Considering that I have a contract, that's an extremely nice gesture...
-Zipwow
I don't know which is more depressing, that 2/3 didn't care enough to vote, or that 1/2 of those that did are crazy.
Ah, Optimum Online. I remember when my family got it, (5-10 years ago) - the price (30 if you had cable, I think) seemed high, but it stayed stable for a long time. Additional computers were discounted at $20, too. I came back from a year or two at University (3-5 years after first getting OOL), and found out it had shot up 10 bucks, despite their business massively increasing. A year later, it's up another 5 or 10. Not only that, but they took away the discount on extra computers. It went from $50 from two computers, to $50 for each. Last summer, we had 3 computers on which we wanted 'net access, so we had to shell out a major cash investment on a wireless hub and two wireless cards. Considering that it would have cost 300 dollars to have the extra 2 computers on for just the summer alone, it had to be done.
I don't get it - aren't monopolies/price fixing illegal?
GL
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. Even though I live in an area with above average population density, it's 25,000 feet to the nearest central office. That means no DSL for me. The number and placement of central offices were frozen decades ago, when this was primarily a rural area. New housing developments get SLCs (subscriber line concentrators), not copper pairs to a central office. If the telcos were serious about providing DSL service, they would upgrade their network to make DSL available to every customer, not just those lucky enough to live near a central office. I'm not a big fan of the cable company, but they have spent far more money than the telco on upgrading and extending their network.
Mea navis aericumbens anguillis abundat
T1s have been historically overpriced, so it isn't really a fair comparison. What would T1s cost in a truly competitive market?
Mea navis aericumbens anguillis abundat
The article states that Comcast was offering a $19.99 rate for cable modem rates.
That is incorrect. Comcast has run this deal multiple times where they offer $19.99 a month for three months. After that the rates go back up to something around $45.99 (IIRC). The rate is not being offered right now but will be back in a few months.
Mmmm.. Donuts
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'm an Australian who just moved from living in the USA to living in Seoul. In the US i was paying about $45 a month for RoadRunner. Performance was pretty good at around 3Mbps.
Here in Seoul I've got KT-ntopia which is a fiber-to-the-building 100BaseT-ethernet-to-your-apartment technology. I regularly get 30-50Mbps (yes, 3-5 megaBYTES a second). Unlimited use, and it costs me about $35 a month. Ntopia isn't available to older apartments, but there you can get VDSL (similar speed) or 5Mbps ADSL.
Population density definitely has something to do with it, but not everything. I can't think of any reason you couldn't offer the same service for the same price in a city like NYC. Similar population density and similar type of housing, and I'm sure most of the population nice and close enough to the exchange for VDSL to work.
" They're both overpriced for what you get? "
Absolutely.
There have been articles in the computer press lately discussing that in Japan 20Mb/s download is the norm for approximately $20-30 a month, and Korea features 26Mb/s for the same price.
We get 1.5 and we're supposed to be *grateful*?
Your comparison with T1's is faulty for a couple of reasons:
1) The cost of T1's is artifically high because of the way the local loop is priced. Its a huge profit center, and the phone company has always positioned it as a way to subsidize residential service.
2) T1's have SLA's. Your DSL or Cable line does not.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
I pay about $55/mo for 1.5 Mb, but in all seriousness, since their TOS forbids almost anything useful, the only time I really NEED that bandwidth is when I'm downloading the ISOs for a new version of linux, or the occasional game demo. I'm thinking I might be nearly as satisfied with a 128K DSL connection, which is $20/mo less. Granted, there's a huge diffrence in bandwidth there, but again...the time I'd use 1.5 Mbs is so limited, I'm beginning to wonder if it's worth the extra money.
For two years I had SBC DSL and had no problem, everything was great, good speed, same ip for over a year solid then suddenly I started getting outages, every night, between 6-10pm.
I did everything I knew to fix the problem but it always came back, almost like clockwork at the same time and ended at roughly the same time every night. When things were working the speed and stability was as I'd come to expect, when it wasn't I was basically cut off. I even let my pc sit and ping a server (one of my work servers) while I was out for town for a weekend and it still happened, so I was convinced it wasn't anything I was doing.
Eventually I called SBC and they "fixed" the problem (their explanation "Your phone line has degraded.") by halving my UL/DL speeds from UL 1.5M to 750k etc.
Everything was fine, then a couple of months later, the problem is back. Same problem, same answer, cut my UL/DL in half again to 380k. At this point I start looking for alternative services, alas none are available, and other DSL providers were out they'd be using the same crap lines/equipment that was causing the problem...
Few more months, it's baaaaack...
Suddenly I'm playing $55/month for 128k down with insufferable packet loss (i.e. no meaningful online gaming) and no recourse. Eventually my local cable company finally wired my block and now I'm back to 1.5m so the story has a happy ending for me. Not so happy an ending for SBC as they were nailed in a class action for these very problems, slower than advertised speeds, frequent interruptions, barely functioning Usenet servers...
Read about it here.
As I'd already switched to another provider I was only due $20, but those who were still on SBC could get up to $100 in, get this, credit from SBC for DSL service! If you were so fed up with SBC that you wanted to cancel your service before the one year contract was up that $100 might go a long way toward your cancellation fee.
Given all this frustration I'll never recommend SBC to anyone.
Plus, their phone CSRs have a neverending litany of "We don't have supervisors", "I am the supervisor", or "There is no other tier of technical support available". Great tip to get to someone who knows what their doing in a tech phone tree: Lie just like they do. An (somewhat embelished) example:
CSR: "What version of Windows are you running?"
ME: "Three".
CSR: "Three?"
ME: Yeah, three.
CSR: There's no such thing as Windows 3.
ME: Yeah, there is, I'm looking at it. It's on an old 486 laptop. I've got Trumpet Winsock running and a PPOE client I wrote that used to work fine, but now just lets me connect and ping servers on my local subnet, but ever time I start up a web browser I get a password dialogue and no matter what I type it comes back with some Redback Aggregation Router configuration thingee about "Do I want to commit these changes and reset " or something like that.
CSR: Uh, let me put you on hold for a minute.
That's how you find the supervisor...
-dameron