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Are You Noticing a Broadband Price War?
Ed Kohler

The Wall Street Journal is reporting (in what sounds like a Verizon PR piece) that there is a broadband Internet price war going on in the United States.

My question to you: do you see it?

It seems like few people in the United States have enough broadband choices for there to be any local competition for prices.

Businesses could promote something nationally that makes it sound like you're fostering competition, yet at the same time do nothing to promote it in markets where you have no competition.

Is this lowering costs or increasing speeds for consumers? If so, where?




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Comments

1. Posted by: justin heideman on September 2, 2008 4:33 PM:

Uhh, no. Just like the war in Iraq, the costs keep going up.

A few years ago, I was paying $45/mo for good cable service. Now I can choose between either $65 or $67 per month for worse service.




2. Posted by: Lee on September 3, 2008 2:57 PM:

No I dont see any war other that the offensive against the customer! The ISP's are nothing more than privateers and they are selling more and charging more all against the free market model. They NEED GOVERNMENT PRICE controlls!




3. Posted by: David on September 4, 2008 1:59 PM:

Hey, i enjoy your posts. This quarter saw wireline sales go way down for service providers, and everyone is anxious for a long awaited price-war. And there is a price war going on. There are promotions in place for people that are willing to switch from their current provider to the competition. And bundling discounts for people that are willing to buy multiple services. if you live in a city and have a cable line and a phone line going to your house, then you more than likely have at least 2 providers of internet service. And there is more than likely a promotion in place at the competition that would incent you to switch. And one from your current provider that would incent you to stay. If you don't ask for it from your current provider, they're not going to send out anyone to tell you this. This is what you are hinting at with your comments...these prices only apply to areas that have competitors. These are the benefits of competition that we have been forever waiting for. our system has so few competitors that change is very slow.

you wrote,"Businesses could promote something nationally that makes it sound like you're fostering competition, yet at the same time do nothing to promote it in markets where you have no competition. " That is exactly what is happening. But the way you write it makes you sound naive. CEO's talk a mean game about how competitive the marketplace is now. What they don't say is that they would never lower the prices if they didn't have to. If you were running a business you would not do it either. You sound like you mean to say that the providers are hiding from regulation by trying to make it appear that there is a price war when there is not one. And you also are hinting that some areas still only have one choice for internet, or perhaps one wired and one satellite. anyway you slice it this is an oligopoly. there are only a few competitors that have gobbled up everyone else and they are going to drag their feet as long as they can, that's the way the system has been set up. Is it holding us back? How do you answer that? The FCC says no. The competitors say that excess regulation from the FCC is what kept them from building out capacity in the first place. I can't make any conclusion there. Can you?

The other option is something like France has, where the government owns the wires and companies compete to provide service over them. I think the FCC needs to think of a third way that will benefit us all. They are hoping for wireless broadband to enter as a solution. but the risk/reward in an environment which is already competitive is not so great. And the technology is young. My view is we need more gov't sponsored r&d in these areas. Development in this field directly affect our lives. And telecommuting can really help our country. It has more potency to save gas than any kind of electric car that you can dream up.

no business would willingly promote competition. Although it is illegal to be anti-competitive i don't think any business would willingly jump into an overly competitive market. They would not survive. The key to business is to have a competitive advantage, the ultimate advantage is to have no competition whatsoever. And government has been the institution that generates monopoly conditions. Businessmen trumpet small government but they love to benefit from government sponsored monopolistic conditions.

"Is this lowering costs or increasing speeds for consumers? If so, where?" my reaction is yes, but since this is still an oligopoly, the progress is seriously slow. hence the WSJ excitement at the recent movement.

A good name to follow on this subject is Scott Cleland of Precursor Inc. he's having some kind of seminar in Washington soon that covers the latest thinking on these subjects.

Thanks for asking about this, and keep keeping me entertained with your emails! i'm using Google Sketchup to design a treehouse with my son thanks to your coverage of it!




4. Posted by: Robyn on September 4, 2008 9:36 PM:

Hi, I so agree with you that I haven't seen much of a broadband price war. I'd love to see a lower monthly price on the wifi connectors that plug in to your USB port that you can use anywhere.




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