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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.
And AOL dialup will still cost $24.99 a month.
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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 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.
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.
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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.
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.
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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
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
"I don't get it - aren't monopolies/price fixing illegal?"
...now, I personally think that our own "deregulation" efforts are a terrible fake that just re-regulate things for the benefit of those same telcos, but that's a different story entirely.
No, not really. Common misconception. Most monopolies are illegal, but they can be legally sanctioned and even protected for a few reasons. One of the most widespread of these is companies that create expensive infrastructure. The idea is that it would be horribly inefficient to have a free market where companies all built their own phone lines, because they wouldn't work together and they would duplicate each other's infrastructure.
Picture New York City, a Very Attractive Market. There would be 25 telephone companies that all had a geographically comprehensive network there; you could get service from any of them and it would cost as low as market-possible. But it might cost arm+leg to connect to someone across the street who had another company, especially if that company didn't have a good contract with yours. And the market-possible price might even end up higher than they are now, because each company had to invest in running wire all over manhattan.
That's worst case, but you get the idea. It is easy to fall into a knee-jerk "regulation == bad" mentality, when in reality a lot of government regulation is damned handy. Think rural electrification or the EPA. In this case it's a hard call, but it is worth noting that most places that people point to where telecom is better than here (US) there is more regulation, not less. It's just that the regulation seems more tuned to the benefit of the consumer, rather than the telco.
In other words, we don't need to get rid of regulation, we need *better* regulation.
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