Why broadband is still so pricey

Rani Molla for GigaOM:

So why haven’t wireline broadband prices budged in recent years? The high, fixed costs of broadband means that there hasn’t been a big rise in competition among providers, according to Scott Wallsten, Vice President for Research and Senior Fellow at Technology Policy Institute. Indeed, most Americans don’t have more than two options when it comes to wireline broadband providers.

So costs remain high because of scarcity of competition and an ever-increasing consumer dependence on the technology. Where I live, I have two choices for wireline broadband: my cable provider, or DSL (FIOS isn’t an option). So really, just one option. Because DSL sucks.

The potential for disruption, according to the article: the increasing deployment of LTE services. I doubt that’s realistic for quite some time: LTE service providers offer a fraction of the bandwidth caps that most wireline broadband service providers do.



  • http://twitter.com/PDelahanty Patrick Delahanty

    Yeah, basically broadband is so expensive because we all keep paying their prices.

  • EzraWard

    “I doubt that’s realistic for quite some time: LTE service providers offer a fraction of the bandwidth caps that most wireline broadband service providers do.” Not to mention that more users on LTE in big cities will give us all big slowdowns. Correct me if I’m wrong, but congestion will be LTE’s biggest issue in the near future.

    • Peter Cohen

      Congestion is a problem for wireline providers too, but more manageable. I’d say scalability is the issue with LTE, yeah.

  • http://www.theuniversalsteve.com SSteve

    You’re lucky. I’m in a semi-rural area and my only option is DSL. And it has gone up 50% since last year. There’s a local company trying to get a grant to install FIOS. I’m hoping against hope that they succeed.

    • http://twitter.com/RoadRacer DT

      Yeah, we finally bailed on our DSL (AT&T). Piss poor CS, paying for 6Mbps down, 1 up, getting 3 down 220Kbps up. Layers of consumer level service assistance. Then to drive the last nail in the coffin, we started receiving ugly notices about bandwidth (capped at 150GB).

      About 3 months ago we moved to Comcast Biz Class, paying for 27/7, getting 38/8, 4 hours for a truck to my home/office, no bandwidth caps, no ports blocked, can buy a block of up to 8 IPs. (for cheap).

  • dr.no
  • Matthew Butch

    Well the reason there is scarcity of competition is local government monopolies on cable service. Again government regulation hurts the free market.

    • Moeskido

      More like “government deregulation allowed cartels to fix prices and create false scarcity.”

      Fixed it for you.

  • http://twitter.com/billyrazzle Billy Razzle

    The only choice where I live is Windstream. It sucks SO HARD! I called AT&T and they told me “We aren’t allowed to sell DSL there.”