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Why Broadband Prices Haven't Decreased

CmdrTaco posted more than 3 years ago | from the someone-owns-boardwalk-and-parkplace dept.

The Internet 336

pdragon04 writes "After a new technology is introduced to the market, there is usually a predictable decrease in price as it becomes more common. Laptops experienced precipitous price drops during the past decade. Digital cameras, personal computers, and computer chips all followed similar steep declines in price. Has the price of broadband Internet followed the same model? Shane Greenstein decided to look into it. "

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Nope (1)

socsoc (1116769) | more than 3 years ago | (#33574990)

Of course not, just look at your bill.

Re:Nope (4, Informative)

TheKidWho (705796) | more than 3 years ago | (#33575154)

Price per Mbps has most definetly dropped down. I'm paying $2/Mbps now... I used to pay $40/Mbps 6 years ago.

Re:Nope (2, Interesting)

socsoc (1116769) | more than 3 years ago | (#33575336)

That's not the answer to the question. The price of your broadband hasn't decreased, rather the speed has increased. I recently experienced the opposite, having to switch to cable from fiber, I now pay quite a bit more for a less advertised speed (actual speed is ridiculously low).

Re:Nope (3, Insightful)

devjoe (88696) | more than 3 years ago | (#33575532)

Nine years ago I paid $50/month for 640kbps. For the last few years it has been $30/month for 3Mbps and I could have gotten 720kbps for $20/month. That qualifies as a drop no matter how you look at it.

Re:Nope (1)

TheKidWho (705796) | more than 3 years ago | (#33575620)

I pay $100/month for 50Mbps Cable service. I get the full 50Mbps 24/7 as far as I can tell(Within my usages). YMMV.

I actually pay almost twice as much now as I used to, but I get almost 10 times the speed.

Re:Nope (1)

hedwards (940851) | more than 3 years ago | (#33575696)

Out here in Seattle, we still pay $40+ a month for 5Mbps. And I'm not even convinced that we're getting the full 5mbps that we were promised. It really depends where you are, and I'm guessing that on the balance you're in the minority.

Re:Nope (1)

TheKidWho (705796) | more than 3 years ago | (#33575736)

I live in a borough of NYC(Queens).

Re:Nope (0)

Anonymous Coward | more than 3 years ago | (#33575884)

Price per mHz on a CPU dropped also. So we should be buying $10,000 cpu's. Straw man argument if you are using the price per mb.

Yep (1)

geekoid (135745) | more than 3 years ago | (#33575234)

I get 10 Mbs for 30 dollars.
In 1998 I got 768Kb for...40 bucks.

So my price per bit has dropped dramatically

Re:Yep (2, Informative)

characterZer0 (138196) | more than 3 years ago | (#33575378)

Lucky.

I get 3Mbps for $55.
6 months ago I got 3Mbps for $50
12 months ago I got 3Mbps for $45
5 years ago I got 3Mbps for $40.
7 years ago I got 3Mbps for $35.

What the fuck Time Warner?

Re:Yep (1)

Lunix Nutcase (1092239) | more than 3 years ago | (#33575688)

In what city are you paying $55 for only 3mbps? In pretty much any city around where I live the 7mbps package is only around 40 bucks. Hell $55 is more than I pay for the 15/2 package.

Re:Yep (3, Insightful)

lgw (121541) | more than 3 years ago | (#33575702)

yeah, my AT&T DSL pricing shows about the same curve, if not from so far back. Bandwidth has stagnated and prices just go up. There's certainly competition between DSL and cable in my area, but I suspect you need small, hungry companies (or at least the threat of them) for competition to help here.

Re:Nope (2, Interesting)

apdyck (1010443) | more than 3 years ago | (#33575468)

Why prices don't decrease (3, Insightful)

Dyinobal (1427207) | more than 3 years ago | (#33574998)

Because companies aren't interested in seeing their profit margins decrease.

Re:Why prices don't decrease (4, Informative)

arivanov (12034) | more than 3 years ago | (#33575214)

Not quite so.

The speed of evolution in Broadband technology prevents the bill from dropping. By the time the equipment is fully depreciated and your bill _CAN_ drop it has to be replaced with a next gen equipment. No broadband tech has lived for more than 3 years so far.

DSL with ATM backhaul, DSL with Ethernet Backhaul, DSL2+, VDSL/FTTC and before the latter is anywhere near depreciated we are marching into PON/GPON land. Same for Cable - Docsis 1.0, 1.2, 2.0, 3.0 over 12 years.

It may start dropping once we are in the land of PON. That is the first technology so far which does not look like an ephemeral stopgap.

Re:Why prices don't decrease (3, Insightful)

Anonymous Coward | more than 3 years ago | (#33575426)

The speed of evolution in Broadband technology prevents the bill from dropping.

Yet somehow the faster speed of CPU evolution (Moore's "law") and hard drive evolution has allowed those things to become both cheaper and much more powerful. And don't tell me that investing in a new fab or retooling an existing fab is cheap, 'cuz it ain't.

My bet is that the telcos overwhelmingly tend to be monopolies. Because of that, they upgrade their equipment only reluctantly when they have too thoroughly oversold their existing infrastructure. Otherwise at least VDSL should be common as dirt by now.

Re:Why prices don't decrease (1)

SimonTheSoundMan (1012395) | more than 3 years ago | (#33575726)

Moore's Law is not processor speed, it is how many transistors you can fit on an IC. Moore's Law did follow processing speed until we hit a barrier and now have to use multiple cores.

Yup, manufacturing of ICs does not become cheaper over time. That follows Moore's Second Law, cost doubles every 18 months.

For networking we have Butter's Law. Cost of sending bits over a network halves every 9 months, and also speed of sending bits of data doubles every 9 months.

ISPs do not give such increases in speed to their customers though. I have an "up to 24Mb/s" ADSL2+ line that gives me 3Mb/s as the line is crappy, I had 3Mb/s 5 years ago, and 2Mb/s 10 years ago. *sigh*

Re:Why prices don't decrease (1)

SimonTheSoundMan (1012395) | more than 3 years ago | (#33575826)

On topic, as for cost. I'm stil paying the same £27/month I paid 10 years ago. So no, cost hasn't decreased. BT in the UK are rolling out their "Infiinity' FTTC service. 40Mb/2Mb for similar price I pay for 3Mb/s.

Think of it this way, the price hasn't decreased but is putting money in their pockets to invrst in the future. BT are rolling out FTTC, this can't come cheap.

Re:Why prices don't decrease (1)

SimonTheSoundMan (1012395) | more than 3 years ago | (#33575858)

Also, £27 is not the same £27 I paid 10 years ago (inflation). In real terms, broadband is far cheaper now.

Re:Why prices don't decrease (4, Insightful)

Anonymous Coward | more than 3 years ago | (#33575488)

I thought I was subsidizing that with my $70 dial-up landline with all the options - for twenty fucking years.

Re:Why prices don't decrease (0)

Anonymous Coward | more than 3 years ago | (#33575588)

Perhaps technically true for backend technology, but why is the DSL I can get today the same speed as the DSL I could get 10 years ago and also no cheaper? What's the benefit of those upgrades to the consumer and why don't we ever see any improvements?

Re:Why prices don't decrease (2, Insightful)

hedwards (940851) | more than 3 years ago | (#33575766)

But, they aren't upgrading their equipment. I mean the available speeds here haven't changed in years. Back in 2000, the cable modem was giving me 4mbps, and now my DSL is promising 5Mbps. Which is the top speed available from Qwest. Supposedly, Speakeasy can do 10mbps, for way over a hundred a month.

I'd be ecstatic if the price weren't going down because the speeds were going up so drastically, but around here, despite all the IT companies, the speeds have been stagnant for years.

Supposedly, a part of the problem is that Qwest sold of its wireless unit, but considering the amount of a dark fiber under Seattle, there's really no excuse for the slow speeds.

Re:Why prices don't decrease (1)

GigG (887839) | more than 3 years ago | (#33575850)

They can only pump so many Mbps through that tube. Think how many more people have that 4-5 Mbps speed. Had they not been upgrading you would be able to carry the data fater in a cart.

Re:Why prices don't decrease (1)

tagno25 (1518033) | more than 3 years ago | (#33575300)

Because companies aren't interested in seeing their profit margins decrease.

No companies are not interested in seeing their profit margins stay the same.

Wholesale bandwidth had been steadily dropping. A couple years ago we used to pay $200 per Mbit now we are paying $2 per Mbit. We could get it as low as $1.45, or less, if we bought a Gbit circuit and had IPv6.

Re:Why prices don't decrease (1)

catbutt (469582) | more than 3 years ago | (#33575388)

So why have prices of laptops and cameras dropped? Are their manufacturers just stupid?

No, everyone presumably tries to charge the price that makes them the most money -- and outside forces determine that price. Supply and demand and such.

Simplistic, cynical answers are easy, but rarely accurate.

Re:Why prices don't decrease (5, Insightful)

iksbob (947407) | more than 3 years ago | (#33575586)

How is the cynical answer not accurate here?
The article states that in most locations, broadband access is controlled by a duopoly of businesses that are unwilling to initiate a price war. This state of non-competition means prices are NOT being controlled by outside forces. The only thing that makes this duopoly better than a monopoly is that each non-competitor doesn't have the balls to actively exploit their position by raising prices.

Re:Why prices don't decrease (1)

Lunix Nutcase (1092239) | more than 3 years ago | (#33575718)

So why have prices of laptops and cameras dropped? Are their manufacturers just stupid?

In many cases, yes. Many of the OEMs have basically reduced the laptop/desktop market into having razor-thin margins in trying to compete for marketshare.

Fail (0)

Anonymous Coward | more than 3 years ago | (#33575004)

CmdrTaco's penis is so small that a newborn looks like Mandingo in comparison.

darn (4, Funny)

NEDHead (1651195) | more than 3 years ago | (#33575028)

I have a pertinent comment - but I can't afford the bandwidth surcharge

Re:darn (1)

oldspewey (1303305) | more than 3 years ago | (#33575124)

Stick to Twitter and you should be alright.

No Competition (0)

Anonymous Coward | more than 3 years ago | (#33575042)

If a business can get away with raping you, I suggest you don't ask any questions and just lube up your asshole. You are going to be raped, whether you like it or not.

Time Warner has forced me to do things so degrading that I don't event want to remember. All I know is that my wallet is covered in multinational semen. gross.

I wish there was some competition but Verizon will rape me anyway, and I don't want to smell like curry.

Oligopoly (4, Interesting)

ShakaUVM (157947) | more than 3 years ago | (#33575064)

In 1997 we got a 30/3 cable modem service, shared with the neighborhood. Since we were the only people on it, we had a 30/3 connection for $60/month. Now I get a dedicated 24/2 connection from U-verse for the same price. I guess it's better now?

Oligopolys don't have the same sort of competition that drives down prices. Even if they don't fix prices, they don't have an incentive to get into a bidding war. For this reason, the price of cell phones is high, and has remained high. Maybe the Walmart thing, and further work by Cricket or Metro PCS will eventually push prices down.

Re:Oligopoly (3, Insightful)

TubeSteak (669689) | more than 3 years ago | (#33575232)

Oligopolys don't have the same sort of competition that drives down prices. Even if they don't fix prices, they don't have an incentive to get into a bidding war. For this reason, the price of cell phones is high, and has remained high. Maybe the Walmart thing, and further work by Cricket or Metro PCS will eventually push prices down.

Walmart is powered by T-Mobile.
Cricket and Metro piggyback on existing national networks.

There are only a handful of national cell phone providers: Sprint Nextel, Verizon, T-Mobile, and AT&T.
Four sellers doesn't have to be an oligopoly, but that's how they've chosen to behave.

Re:Oligopoly (1, Informative)

Anonymous Coward | more than 3 years ago | (#33575238)

You were LUCKY that no one else was on your cable branch. In a normal neighborhood, cable broadband is oversubscribed to the point that you're lucky to get 3-6mb/s down. With ATT, that is a dedicated connection directly from your house to the DSLAM, so it doesn't matter whether people in your neighborhood have it or not. Now, with that said, if any company oversubscribes their backbone connections, it won't matter what speed your home connection is rated.

Re:Oligopoly (1)

greymond (539980) | more than 3 years ago | (#33575750)

Who is Cricket and Metro PCS? I only know who AT&T and Verizon are... ;)

Re:Oligopoly (4, Insightful)

mikeiver1 (1630021) | more than 3 years ago | (#33575818)

I read this kind of article and think, The last mile services should be owned by the municipality. All coming to a central data center where ALL the players have to sit in the same CoLo and compete for customers. This of course relies on the municipality being able to maintain a basic level of service on their lines. This would require fibre to make it reliable and cost effective in the long run. It would also make it rather competitive as the providers would not have a captive customer. You could have dozens of providers and literally switch to another provider with a change in the routing table of the switch. The FCC is not here for the consumer, they are owned by the large communications corps and only work in their interest to help maintain obscene profits and control of the customers under them. Seeing the issues and fixing them are on vastly different plains though..... We are destined to be bent over for a long time to come. Chattanooga, TN. is starting to look very good.

Re:Oligopoly (1)

greymond (539980) | more than 3 years ago | (#33575932)

Forgot to add it with my silly post...in 1997 I graduated Highschool and I had just migrated from a 33.6k modem to a 56k modem and was switching over to a thing called DSL for $30 a month since I had a job at CompUSA. The DSL was a 256/128 connection (it gradually improved to a 512/256 connection the next couple years).

I switched to a Point to Point based connection in 2000 or 2001 that was a 1.5mb connection for $80/mo with the worst latency I had ever experienced so I switched back to DSL and while I saw commercials advertising 1.5/768 connections for $60/mo (eventually dropped down to around $30 in recent years) with DSL I apparently just never lived in places with good enough phone wires to actually reach that speed.

It wasn't until around 2004 or 2005 that I got my first taste of a Cable Modem that just rocked my socks off and since then it's been primarily what I've used in both the Bay Area (Comcast) and Southern Nevada when I lived there (Cox).

Of course today I just leach the interwebs from two of my neighbors who have failed to secure their wireless routers and saves me a good chunk of booze money each month.

Er, they have? (2, Insightful)

SpooForBrains (771537) | more than 3 years ago | (#33575076)

In the UK at least. Free broadband deals are common loss-leaders from companies like Sky and Orange.

The pay services have scaled as well, so £35 per month buys you much more bandwidth than it did five years ago.

Re:Er, they have? (5, Insightful)

nurb432 (527695) | more than 3 years ago | (#33575156)

You must have competition there. We dont.

Re:Er, they have? (2, Insightful)

EdZ (755139) | more than 3 years ago | (#33575394)

We have enforce competition in the form of LLU Unbundling. BT, the owners of most of the POTS infrastructure in the country, are required to allow other providers to install their equipment in order to provide a broadband service, rather than just re-selling BT's wholesale service.

Re:Er, they have? (1)

Pollux (102520) | more than 3 years ago | (#33575590)

The UK has 660 people [wikipedia.org] per square mile. We don't.

That's a lot of customers in a very small space. Lots of potential business in a small area means cheaper costs of deployment and greater returns on the investment, leading to easy competition.

Re:Er, they have? (0)

Anonymous Coward | more than 3 years ago | (#33575836)

As always when someone brings up that point, we have Manhattan.

Re:Er, they have? (1)

petes_PoV (912422) | more than 3 years ago | (#33575910)

That's because we're socialist, commie basterds who insist on regulating the markets so there's fair pricing for everyone, rather than the capitalist ideals of letting the market define the price and therefore allowing people with less financial clout from being exploited.

One word (4, Insightful)

flaming error (1041742) | more than 3 years ago | (#33575096)

Competition.

Where I live I can have dial-up, or cable.

Re:One word (1)

EdA (105889) | more than 3 years ago | (#33575196)

slashdotted

Re:One word (0)

Anonymous Coward | more than 3 years ago | (#33575324)

It's the same choices that I have, but both choices are from the same company.

Re:One word (1)

Sporkinum (655143) | more than 3 years ago | (#33575360)

No competition where I am. I paid $45 for 1 meg DSL 10 years ago. I pay the same now. It's slightly faster now though, more like 1.2 meg.

Re:One word (1)

Rob the Bold (788862) | more than 3 years ago | (#33575812)

Competition.

Where I live I can have dial-up, or cable.

Exactly. Or more specifically, the lack thereof. Here we've got cable, DSL and wimax, but you can only get more than 10 Mbps with cable. All the others are limited to 1-2 Mb down. So when my cable internet bill goes up 25% this year my only recourse is to dump the TV. I guess I could call and bitch, but I'm more of a "just quietly do without" kind of guy.

DSL here is available from multiple providers, and prices from that are much more competitive.

Re:One word (1)

hedwards (940851) | more than 3 years ago | (#33575844)

We're luckier than that here. We've got dial-up, cable, DSL or Clear. But the prices are not particularly good. I'm tempted to give clear a shot because for something like $75 a month, I get both home and mobile without a cap and possibly at a speed that matches what I'm getting now.

But in general, there's no competition here either. And for some inexplicable reason despite having a huge amount of dark fiber available, the speeds are pathetic compared with some other places. Even the cable company tops out at 12mbps when factoring in their cheating.

Apparently (1)

The MAZZTer (911996) | more than 3 years ago | (#33575098)

Northwestern.edu hasn't been paying their internet bills...

Re:Apparently (1)

Trygil (1880796) | more than 3 years ago | (#33575152)

/.'d

Graphing Calculators Sure Haven't... (0)

Anonymous Coward | more than 3 years ago | (#33575106)

Because it's NOT a commodity? (4, Interesting)

$RANDOMLUSER (804576) | more than 3 years ago | (#33575110)

Broadband is more a like service than a commodity. The infrastructure support costs (particularly labor) simply don't respond to economies of scale the way repetitively manufactured items do.

Re:Because it's NOT a commodity? (0)

captaindomon (870655) | more than 3 years ago | (#33575420)

Exactly. A much better comparison would be against electricity prices over time, which are much less prone to economies of scale and a better direct comparison, and which have changed rather slowly, pretty much with normal inflation (and sometimes negatively). No companies are manufacturing broadband, boxing it up, and shipping it to consumers. It's a different concept.

Re:Because it's NOT a commodity? (1)

$RANDOMLUSER (804576) | more than 3 years ago | (#33575594)

The difference is the electric companies don't have to keep continuously rewiring the grid to stay competitive. Can you imagine what electric costs would be like if they had to replace all the transformers every few years? Granted, transformers are probably several orders of magnitude more expensive than routers.

They dropped early on... (5, Insightful)

AmazinglySmooth (1668735) | more than 3 years ago | (#33575132)

I'm old enough to remember when broadband to the home was new. DSL was $50/month. At my apartment, they wanted $80/month for 1.5Mbps. I now can get 8Mbps for $40/month. DSL was down to $15/month. So, prices did drop. Now they are bundling and offering "faster" service to keep prices up. I think this is totally inline with declines in tech prices. Every year new PC's are brought out at the same price points but with more or faster or better. PC price drops have stopped too. I don't see any conspiracy or screwing.

Re:They dropped early on... (1)

NJRoadfan (1254248) | more than 3 years ago | (#33575604)

I had Comcast@Home installed in 1997. Basically an uncapped 8/1 connection for $40/mo with equipment rental. By 2001 @Home collapsed and the system was over subscribed. A cap of 1.5m/384k was put into place once Comcast brought everything in house. There were some incremental speed increases, but nothing spectacular and the price only seemed to steadily increase. When I left for FiOS in 2007 I think Comcast was still capped at 3-4M/512k up on the regular tier. Cable really didn't become competitive until... well... competition in the form of FiOS showed up. Now I have a 30/30 connection to the house for ~$33/mo (part of a triple play deal).

Is there a point that more speed doesn't matter? Sure, YouTube is still pretty damned slow at 30Mbps. Most sites can't handle those speeds anyway. I have put the faster upload speeds to use though, very handy for online backups and umm... sharing of Linux distros on BitTorrent.

decrease? (0)

Anonymous Coward | more than 3 years ago | (#33575142)

they have almost doubled .....sorry but its not worth the value and guess what
im still not gonna buy your music or movies and ill go without cable and live on the 6tb i have
with 100000 books

in other words fuck this stupidity

because it's transportation. (1)

mapkinase (958129) | more than 3 years ago | (#33575150)

Transportation is transferring something that increases as O(size^N) via channels that increase as O(size^(M)) at best, where "size" is information or volume of goods. M N. Transportation costs/volume can only increase with time.

Well (0)

Anonymous Coward | more than 3 years ago | (#33575166)

that prices aren't going down because the providers do not have any incentives. Most of the places there is only one provider and no competition so no other choice for consumer like me to switch to.

the study is bogus (5, Insightful)

alen (225700) | more than 3 years ago | (#33575184)

i remember the days when 33kpbs dial up was $30 or $40 a month. today i'm paying $120 a month for cable TV, digital unlimited phone over my cable, a DVR and the lowest level of broadband from time warner which averages out to 5mbps on average. sometimes hits 10 depending on time of day. DSL which was close to $50 when it first came out can be had for $15 a month these days.

otherwise there is a big difference in the business models. to build a laptop you need very little resources for the engineering and most of the cost is buying the parts and software. even in the 1990's companies like alienware and falcon northwest started very small because other than the engineering/QA costs your biggest cost is buying the parts which are repaid when you sell the computer.

the ISP/telecom business is different. you need a huge capital investment to lay the wires and upgrade your network. this is usually financed by long term bonds where you pay 8% or so interest on average. in the case of Verizon that spent $10 billion or so to deploy FIOS the interest cost is approximately $800,000,000 PER YEAR. if i'm wrong about the figures then find them yourself and calculate the interest. then you have to buy the equipment whether it's cable modems or FIOS modems or whatever which is very expensive when you are first deploying new tech. i've read estimates that Verizon spent $400 per customer for the equipment. and don't forget about each hick town forcing you to finance a yarn museum or some other nonsense because you are huge company that is going to make a killing on the poor residents and you should pay up

it's almost like the console business where the initial customers are money losers and you make your profits later on

Re:the study is bogus (1)

alen (225700) | more than 3 years ago | (#33575244)

PS and you pay the interest whether you are providing a service or not. you get the cash and then it will probably take a year or so to initially deploy your new wires and start service and the bond holders still expect their interest payments that year. and if your break even point is say 3 years you still pay interest.

Re:the study is bogus (2, Funny)

MattGWU (86623) | more than 3 years ago | (#33575286)

Interesting post, but the real take home here is "yarn museum", which I will be using as an example of pretty much everything from now on. Thanks!

Re:the study is bogus (1)

alen (225700) | more than 3 years ago | (#33575318)

i think the name of the movie was Michael with John Travolta. he was the arch-angel Michael who wanted to travel the US and see the sights no one else does. one was a big ball of yarn some where

Re:the study is bogus (2, Interesting)

alen (225700) | more than 3 years ago | (#33575344)

applies to NYC as well. someone wants to build a new sky scraper and they agreed to spend $100 million on improving local public transportation and subway stations. happens all the time here. most of the NYC subway escalators are paid for by private industry as a condition of getting permits to build something

Re:the study is bogus (1)

rufty_tufty (888596) | more than 3 years ago | (#33575554)

I've heard this argument many times, but in my heart I don't believe it - I must be missing something.
Granted this is oversimplifying the problem but:
An adsl modem costs me approx £100. Assuming that they telco buys in bulk and has multi line boxes (which will reduce the cost per line) but that they will buy at the leading edge of design then I'll assume their modem costs about the same as mine. In the UK at least the phone lines that constitude the bulk of investment were paid off years ago as part of the phone service so there's no incremental cost of the line there. Therefore the cost to telco of providing me with a broadband connection is £100 one off cost + electric for their modem + the cost of their bulk data line.
I don't buy that their bulk data line should be much more expensive though per byte than the connection to my house because we're always being told that it's the last copper mile that is expensive and even if that is a lie by the telcos then they would charge for connection by the byte not by the connection. With that assumption in mind I'll assume £100 of capex per line for the back haul link.
This means the cost of providing a broadband line is a one off £200 cost per line + monthly electric. I've had ADSL now for nearly a decade so at approx £24 a month then either I've used £2500 worth of electric in 10 years or my assumptions are very wrong and I've missed something in my calculations.

Maybe they had a one off cost in 2000 for installing fibre to all of their exchanges - but that shouldn't have been that expensive because they could have just pulled the fibre through their existing runs that they used to connect their exchanges together.

Ah, but what about shortly where it'll be fibre to the cabinet. Same situation surely? The exchange already has a conduit from the exchange to the cabinet for the copper lines, so just pull some fibre through that conduit. The modem they need to install in the cabinet cannot be more expensive than the one I have to install at my house, so the cost again is £100 per line, some shared fibre and an ethernet hub. And that technology they'll be able to charge me £30 a month for the next 10 years?

I just don't get it.

Re:the study is bogus (0)

Anonymous Coward | more than 3 years ago | (#33575574)

I'm from a hick town, and I would love for broadband providers to make a killing there. As it stands, the best service my parents can get (I've moved) is satellite service with 1-2 second latency and a daily download cap of 500 MB. It's that or dialup. No cable, no DSL, not even ISDN. We would just like to have the same opportunities as everyone else. Oh, and my parents pay more for their shitty satellite internet than I pay for my 2MB/s (16Mb/s) cable.

Re:the study is bogus (1)

pspahn (1175617) | more than 3 years ago | (#33575636)

today i'm paying $120 a month for cable TV, digital unlimited phone over my cable, a DVR and the lowest level of broadband from time warner which averages out to 5mbps on average.

Think about this statement.

Ten years ago, what did you expect to do with your internet connection? Web, email, maybe some downloads, possibly voice. Now look at what you can do with it today. It is an all encompassing entertainment and communication medium. Regardless of what the price as done in the last decade, you are getting WAY MORE VALUE out of that connection than before. Personally, I'm willing to pay $80/mo for my cell phone service simply because I can carry internet around with me. This is totally worth it, as I can still attend school while on vacation or whatever.

Comparing services now to services then is not accurate. They are simply not the same services.

My cost has gone down, too (1)

swb (14022) | more than 3 years ago | (#33575760)

When I first moved into my house in 1999, there was no broadband -- it was dialup or a T1.

A year later, DSL, $80/month, 768k bidirectional, 1 static IP.

Switched ISPs, the price stayed the same, but the speed went up to 1.5/1; in essence, a price decrease per kb of bandwidth. Thanks to a kludge in routing, I managed to "steal" 2 more static IPs (broadcast and network) by changing my netmask on my router one bit wider.

This spring I switched to Comcast Business Class -- 5 real static IPs, $69/month, 12 down/2 up. This is an actual price decrease, but if you look over the past 10 years, the "real" price has gone down, along with the actual dollar denominated cost, *and* the per kb cost, too.

And from what I can tell (1)

Sycraft-fu (314770) | more than 3 years ago | (#33575920)

Internet HAS gotten cheaper int terms of kbps/dollar. Minimum prices haven't dropped because there is a given cost in providing someone access. However the cost over all has dropped a whole lot. When I first got broadband it was about $60-70/month (I can't remember precisely) for 256k symmetrical consumer level access. That is more like $75-90 in today's dollars. That was also the very cheapest broadband plan. In my case, it was the only, the phone line couldn't support any more, and there was no other broadband out there.

Well checking with Cox, $90/month today gets you 50mb/5mb. They have cheaper plans, of course. You also have other options the phone company offers DSL, and so does Covad (and their ISPs) and Newedge. Not as high speed as cable, but you can still get 20mbit DSL in many areas.

I'd call that an improvement. A 200x speed increase for about the same price.

Same deal on the professional front. I switched to business/professional class Internet a long time ago since you get static IPs, no transfer limits, can run servers, etc. Well when I first got that it was 640k symmetrical DSL with 5 static IPs for about $230/month. Cox just called me last week and told me that they now have 50/5mb service for home business accounts. Comes out to about $150/month for that with 4 static IPs.

Near as I can tell Internet has gotten much cheaper for what you get, and continues to do so.

Apples and Organges (2, Insightful)

coolsnowmen (695297) | more than 3 years ago | (#33575218)

Laptops experienced precipitous price drops during the past decade. Digital cameras, personal computers, and computer chips all followed similar steep declines in price.

These things aren't really comparable. These are all gadgets, the internet is a service.

The range of quality and prices has increased in the gadget market because the cost benefit ratio of getting into that market is extremely different, AND because if you don't like the the most recent laptop you have choices you don't have with ISPs. You have a half dozen other laptops that you can choose instead, in addition to the added choice of, keeping your old one a little longer. That is, you can still have your old camera a little longer and wait for a digital camera you want to come down in price because that decision changed the supply and demand (reduced demand). Choosing NOT to have internet isn't really a choice most people are prepared to make. I guess I could live at my local library, but they don't let me bring my XBOX.

Missing something (5, Insightful)

Aceticon (140883) | more than 3 years ago | (#33575252)

The title should say "Why Broadband Prices Haven't Decreased in the US"

For which the answer is:
- Most of the US has a de facto oligopoly in the provision of broadband services so the suppiers feel no market pressure to improve services and/or lower prices

The reasons for the oligopoly are:
- High barriers to entry due the cost of laying new cables/fibre, especially for the last mile. The difficulty in getting rights of way raises these even further.
- Entrenched suppliers with fully paid-up infrastrutures. To add insult to injury, most of that infrastruture has been paid for with taxpayer's money.
- Bought up and paid for politician which not only do not take any measures to open the market up for competition (like those that were taken in Europe) but activelly stop new competition from coming to the market (by blocking municipal projects, not assigning rights-of-way for laying new cables/fiber and in general maintain a climate of regulatory uncertainty).

The rest of the world has been hapilly getting better speeds for less money thank you very much.

Re:Missing something (1)

darjen (879890) | more than 3 years ago | (#33575640)

The high barrier of entry can be overcome by competition, and has in the past. For example, there were private railroad men who competed successfully with federally subsidized lines. But it seems more difficult to overcome government deals to restrict competition. At least not without a massive populist effort. That's the primary reason there is an entrenched oligarchy. Our greasy politicians have given it to them.

Absolutely right (5, Insightful)

Infonaut (96956) | more than 3 years ago | (#33575778)

Think the telecom industry is a bastion of good ol' American competition? Think again. These guys have been running circles around the FCC for years. They've taken massive tax breaks and incentives to build out broadband, and by any reasonable standard they have failed to make good on that promise. In the early 2000s, they succeeded in getting the Supreme Court to buy into the idea that they could box out newcomers like Covad, while anticompetitive tactics ran rampant. At the very same time, they were dragging their heels rolling out DSL. The irony is that the Baby Bells only exist in the first place because the government created them by breaking up the original AT&T.

Taxpayers have been getting reamed by US telecom companies for decades, the FCC is far too close to the industry it regulates, and the courts have done a very poor job of safeguarding a level playing field. The entire industry needs an enema.

Re:Missing something (1)

Rolgar (556636) | more than 3 years ago | (#33575886)

I definitely think we should have coop utilities, including broadband in the US. The property owners or renters own the coop equally, and it runs the lines for water, sewage, electricity, and data. Electricity and data providers can sell their services to anybody in the coop, separating the right to control access to the customer from the incentive to prevent access to the customer to force higher prices. Once the coop has paid for the (new fiber optic) lines, the primary expenses are the salaries of the people who maintain the lines, electricity to run everything, and negotiated fees for transferring data from city to city.

This would also negate the need for net neutrality, because if the coop decided against it, it would presumably be done with the consent of the customers, who would be the same owners who would vote at the coop meeting.

more bang for the buck (1, Interesting)

Anonymous Coward | more than 3 years ago | (#33575260)

You're looking at it wrong. Compare bandwidth/cost. A decade ago my isp offered 256K, 512K, and 768Kbps plans. Now we have 3 5 or 10Mbps and up, but pay about the same. IOW we pay a LOT less per bit than a decade ago.

It has gone down big time (1, Interesting)

Anonymous Coward | more than 3 years ago | (#33575262)

I remember looking into getting a T1 (or speed equivalent connection) 15 years ago for my house. It would have cost around $10k in initial costs (getting the wire from the street to my house) + $300/month. Now I pay $60/month. So it all depends on how far in time you consider prices.

Re:It has gone down big time (2, Insightful)

Voyager529 (1363959) | more than 3 years ago | (#33575536)

That's not really a fair comparison though. Yes, you're getting a higher speed for less money, but speed is only a piece of what you're paying for. The other $240/month went to the fact that you were paying for internet access that was government regulated to hell so you were guaranteed a full 1.544Mbps 24/7 with 99.999% guaranteed uptime and low latency, and the ISP had to credit your account if you got anything less.

Your DSL line shares a CO with a few dozen/hundred of your neighbors. Even if it's not a single node for your block, at some point you're going to feel the load if everyone is trying to stream the Victoria's Secret Fashion Show simultaneously, and you've got no guarantee other than "best effort" that you're going to get the advertised bandwidth, or what uptime you're going to have. Also, odds are very good that incoming connections to ports 80 and 25 are blocked at the ISP leve. For home users paying $30-$60/month, that's alright. For businesses running their web servers and Exchange servers on a line, DSL simply won't cut it.

Re:It has gone down big time (0)

Anonymous Coward | more than 3 years ago | (#33575806)

You also probably have an SLA that any Cable/DSL customer doesn't have. Also you probably have a block of IPs. Maybe even a full class C. Getting a non-DHCP address usually going to cost you close to $80 month. Most cable/ISP require you to have a "business" account in order to get a static IP. Most cable/DSL providers max you out at around 2 - 4 IP even then. Maybe 8 IPs if your lucky. At least that is how it is here in the US.

Well that's strange (1)

sunking2 (521698) | more than 3 years ago | (#33575264)

The last few years I've been calling about once a year just to see if they've installed a closer office and every time I've gotten a reduced price instead.

Simple! (1)

atomicxblue (1077017) | more than 3 years ago | (#33575322)

Lowering prices would cut into the profit margin.

Europe is different! (1, Interesting)

Anonymous Coward | more than 3 years ago | (#33575330)

7 Mpbs ADSL is about EUR 15 / month.

Obvious reason = NO COMPETITION (1)

e065c8515d206cb0e190 (1785896) | more than 3 years ago | (#33575358)

Seriously. How can the US lag behind Europe, Japan, Korea, etc.

We're all victims... (2, Insightful)

Eggplant62 (120514) | more than 3 years ago | (#33575406)

Broadband prices won't decrease because it would cut down on the profitability of the carriers. I just called my cable provider today and told them to stick the TV service, but we're keeping the Internet feed until they price that out of an affordable budget. I can get everything I ever did via the 'net now, so no worries.

In short, here's why: (0)

Anonymous Coward | more than 3 years ago | (#33575418)

They want to deliver vast amounts of information over the Internet. And again, the Internet is not something that you just dump something on. It's not a big truck. It's a series of tubes. And if you don't understand, those tubes can be filled and if they are filled, when you put your message in, it gets in line and it's going to be delayed by anyone that puts into that tube enormous amounts of material...

- Theodore Stevens (1923-1910)

Re:In short, here's why: (2, Informative)

digitalsushi (137809) | more than 3 years ago | (#33575448)

y2k bug detected in (#33575418)

More data, same price (2, Insightful)

Kumiorava (95318) | more than 3 years ago | (#33575428)

Even the article states that "They found that, even though prices stayed relatively constant, the quality of service rose through the years—for example, in 2004 the median cable modem contract price was about $45 with an upload bandwidth of 3000 bits per second, while in 2009 the median contract cost $53 but had an upload bandwidth of 8000 bps." Doubled the bandwidth per dollar over 5 years. I wouldn't call that insignificant.

Second reason is that there are price points that people are willing to pay. If ordinary household would prefer to have $10 per month broadband or none at all then there would be $10 broadband providers out there and average price would skew towards that. The bandwidth and service wouldn't be as high as it is now or the broadband would be more limited in other ways. The price points are formed over time and they can be wildly different from country to country based on available income and culture.

We need an iTunes of broadband (4, Insightful)

Monsieur Canard (766354) | more than 3 years ago | (#33575466)

I'm sure prices will drop soon.

It's like after music CDs were introduced that cost a whole 12-13 dollars each. But that was only because manufacturing plants were scarce and demand was low. Once production ramped up and demand increased then prices naturally went ....

Oh bother.

In the land of milk and honey... (0)

Anonymous Coward | more than 3 years ago | (#33575482)

Greed

Slashdotted (1)

torrija (993870) | more than 3 years ago | (#33575494)

The link seems slashdoted. This is a google cache link to it:

http://webcache.googleusercontent.com/search?q=cache:fDtM1ZPbO5kJ:insight.kellogg.northwestern.edu/index.php/Kellogg/article/why_broadband_prices_havent_decreased+Shane+Greenstein+broadband+prices+decreased&hl=en&gl=es&strip=1 [googleusercontent.com]

Summary: the broadband industry regulates itself, thus prices remain high.

Re:Slashdotted (1)

kokoko1 (833247) | more than 3 years ago | (#33575786)

thanks for the google cache link

Service vs Product (1)

rainmayun (842754) | more than 3 years ago | (#33575504)

All the examples cited in the summary are products. Broadband internet is a service. The hardware required for broadband internet access has certainly gotten cheaper. But why does he think the service would get cheaper? I can't think of other examples of services that get cheaper over time unless there is punctuated technological advancement. Broadband gets more or less continuously faster, but no punctuation. Other services like power, water, telephone service, cable television, these have all gotten more expensive. Why would broadband service be any different?

Bandwidth, In the Day (1)

FurtiveGlancer (1274746) | more than 3 years ago | (#33575528)

A full box of punched cards was high bandwidth, back in the day. It certainly beat a 300 baud terminal that was largely ignored by the mainframe.

Two Words: ( +10, Helpful ) (0)

Anonymous Coward | more than 3 years ago | (#33575556)

To summarize through all the hot air: Price FIXING.

I help this helps the DOJ prosecuting attorneys.

Yours In Ashgabat,
K. Trout

Look at the big picture. (0)

Anonymous Coward | more than 3 years ago | (#33575612)

13 years ago, I paid ~$125 per month for ISDN, $19.99 per month for DSL is an enormous price decrease.

Nope. (1)

ihatejobs (1765190) | more than 3 years ago | (#33575618)

No, prices have not dropped. Speed has increased, but prices have not dropped. When I first purchased my first internet connection (28.8k mofos!) it was costing me $60 a month. I pay $60 a month now for my cable connection. Its faster, but I'm still paying the same thing I was paying 10+ years ago.

They have decreased - A LOT (1)

petes_PoV (912422) | more than 3 years ago | (#33575698)

When I first got BB I was paying £45 / month for an unlimited 256kbit/s connection. Now I pay £7.50 a month and get 14,400 KBit/s.

So I'm paying one sixth the price and getting over 50 times the speed. That sounds like a pretty good deal to me and makes me think that whoever is bleating on that their broadband price hasn't decreased either has no idea what they're talking about, or should really look around for a better deal, or is living in a country with next to no competition.

But for the vast majority of places, broadband prices have dropped markedly since it's inception - but I don't expect the same degree of reduction in the future, it's a mature market now.

Because (1)

rpunit (966295) | more than 3 years ago | (#33575772)

It's like asking why the electricity prices haven't decreased. Its a utility like any other. The cost is for infrastructure and people to support that. The falling cost of technology only marginally affects the cost of providing this service.

640k is enough for everyone (0)

Anonymous Coward | more than 3 years ago | (#33575834)

640k is enough for everyone

Coral Cache (1)

Qubit (100461) | more than 3 years ago | (#33575852)

is here [nyud.net]

that site is taking one heck of a beating...

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