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Lower Broadband Prices Except in US

by Tom Moccia | December 23, 2010December 23, 2010 2:00 pm PDT

With the continued evolution of technology, I have been disappointed in the lack of higher broadband speeds being provided at lower prices. As most technology moves forward, prices of products and services tend to come down as newer, faster and more powerful devices are introduced into the market. That does not seem to be the case with broadband service in the United Sates.

Over the last three years residential broadband subscription rates have risen at a modest two percent, while ISPs (Internet Service Providers) have been providing faster speeds to appease customers wishing to stream higher quality content. Now, you may be saying, “wait you just contradicted yourself”. Well let’s chew on this, in the latest survey from The Technology Policy Institute, most other countries residential broadband prices have fallen-in some instances by as much as forty percent,.

screen-shot-2010-12-22-at-35926-pmThe survey also found that prices for what providers call “triple play” in the US – which is television, phone service and internet bundled together – are some of the most expensive among Organization for Economic Cooperation and Development member nations. The reason for the pricing gap is unclear, but the the fact that many other nations require large ISPs to open their network to smaller broadband companies at wholesale prices, is a good place to start.

“Few countries actively regulate retail broadband prices, but every country that mandates network unbundling necessarily regulates wholesale prices,” the TPI survey observes. “Wholesale prices are part of an ISP’s costs, meaning that wholesale price regulation can affect retail prices. Thus it may not be surprising that the biggest price decreases have occurred in the EU [European Union], where wholesale prices for full unbundled loop access fell by about 10 percent between 2007 and 2009.”

This goes back to the age old debate about “line sharing” and if this would benefit the industry as a whole or just consumers in the form of better services and lower prices. The FCC and Scientific American agree that consumers around the world would benefit from “unbundling”, although AT&T and Verizon are not so sure and oppose the concept.

It isn’t hard to imagine that the big telecom conglomerates don’t want to provide better services at lower prices for the good of everyone involved. I’m personally in favor of “line sharing”, as it will give me, as a a consumer, more options for internet service. I currently have the option to use AT&T, Comcast or Clearwire, all of which have their pros and cons. Sharing lines would open up competition and force ISPs to provide better service at more affordable prices.

What are your thoughts on the whole ISP distribution system?


Tom Moccia

Tom Moccia is a native of Stamford, Connecticut and moved his family west in 2000 and now calls Stockton, California home with his wife and two...

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