<<UPDATED 4-23-03!!!>> Broadband pricing scams?

[Soybomb]

I work for a small-ish ISP that sells DSL so we're cable's competitors. I don't see anything wrong with the way cable companies are operating. If I ran a business I'd certainly charge more if there were no competition in the area. Even places like staples will run different price sheets if they have local competition. If the prices are too high or the service too bad, don't buy it. Get satellite, a fractional T1 if its a business class service you need, or hell even start a wireless ISP and make some money by providing a service to the others in your area.

I also don't see why you shouldn't expect your cable internet service to be cheaper if you have cabletv. There is a maintance cost for bringing the signal to your home (equipment, repairs, upgrades, troubleshooting). If you're not paying for it in for television, then it will be added to your internet service package.

edit: directpc.com is 2 way satellite, and also don't forget about ISDN, and IDSL

 

[wyvrn]

I don't think it's illegal for company to price gouge unless they are the only provider in a large market. Since there is competition in broadband in most areas, it would be hard to prosecute with a class-action lawsuit since much of the market doesn't understand what is going on. You have lots of people, as in this thread, that have choice and would downplay anyone complaining. Even if those companies have certain markets where monopoly conditions exist, it is going to be hard to wage any action.

However, I do think customers have the right to complain. They should vote with their dollars and not buy the service. But it still sucks that they are getting screwed where others obviously have the luxury of choice.

As far as the argument about equipment costs go, I don't buy them. DSL is run off of the ATM network the phone companies developed to for businesses in metropolitan areas. The connection to the customer's house goes over existing phone lines. Broadband prices now don't pay for laying the infrastructure because it was already paid for long long ago. Only the costs of conversion at the CO's are applicable. In the case of cable modem, the cable had been laid and paid for by cable tv subscribers. Much of that infrastructure was already there. So again, it's not that expensive for these companies to provide fast Internet connections to consumers. Satellite IS expensive because Internet consumers are paying directly for equipment that is not financed by other activities. The first television satellites were not capable of also providing Internet access. That's why satellite Internet is so much more expensive than other broadband options, and will only become cheaper through time. And that is why satellite is not a good choice for many people, prices are simply way too high right now. See below:

edit: directpc.com is 2 way satellite, and also don't forget about ISDN, and IDSL

Looking at their pricesheets for residential customers, costs look prohibitive. You have to sign a one-year contract for $70/month and an upfront cost of $800. This is NOT a substitute for consumer broadband. While it has the same speeds as consumer broadband (with the upload cap), it costs many times more.

IDSL is not available in every area, so again you have areas where people can't use it. ISDN is more available, but costs and offers about the same speed as dialup so it's not a substitute.

 

[Soybomb]

I pay verizon $75 a month for the lowest level home dsl service offered in my area. One year contract and was $200 in equipment costs. Thats not counting the isp(where is free because I work there), but just the dsl circuit itself. Now of course I'm factoring in the cost of my home phone line too. I wouldn't have it except you have to for dsl service. Perhaps cable companies should just require you to have TV service to get internet service, then they'd be like the telcos.........

Broadband prices now don't pay for laying the infrastructure because it was already paid for long long ago. Only the costs of conversion at the CO's are applicable. In the case of cable modem, the cable had been laid and paid for by cable tv subscribers. Much of that infrastructure was already there. So again, it's not that expensive for these companies to provide fast Internet connections to consumers.

Not really, around here verizon has had to lay new copper all over for dsl service where it was poor quality/small guage wire. Then you have the costs of taking out load coils and the like from the lines. Don't forget about the nifty little things verizon uses here to put 2 phone lines on one pair of copper. Its a digital converter and has to be removed and another pair pulled in since it uses the higher frequencies that dsl does. And of course dslams aren't cheap for the CO.

Cable companies don't have it much better. All the surrounding towns that have gotten cable internet service have had to have their hfc plant rebuilt, with lots of fiber pulled, etc.

The infrastructure for both is expensive.

 

[wyvrn]

Not really, around here verizon has had to lay new copper all over for dsl service where it was poor quality/small guage wire. Then you have the costs of taking out load coils and the like from the lines. Don't forget about the nifty little things verizon uses here to put 2 phone lines on one pair of copper. Its a digital converter and has to be removed and another pair pulled in since it uses the higher frequencies that dsl does. And of course dslams aren't cheap for the CO.

In some cases yes, in others no. At my house, our lines are looped and the telco refuses to lay new copper. Each of my next door neighbors can get DSL. But others on my block who have looped lines, cannot unless they opt to pay for the new copper themselves. We have all been quoted numbers in the double digit thousands. Is paying $10k+ for broadband really smart when I could install a T1 line for much less?

 

[arod]

Its bad here, COX modem service is 55 bucks a month and you HAVE to have cable service or the modem supposedly doenst work. Thats an extra 20 bucks so 75 for both. And thats only basic cable as well (like 10 channels)

Im done with cabel and now have verizon dsl (its been good to me so far) and Dish for 50 total per month and I get better programming...

 

[Soybomb]

Originally posted by: wyvrn

Not really, around here verizon has had to lay new copper all over for dsl service where it was poor quality/small guage wire. Then you have the costs of taking out load coils and the like from the lines. Don't forget about the nifty little things verizon uses here to put 2 phone lines on one pair of copper. Its a digital converter and has to be removed and another pair pulled in since it uses the higher frequencies that dsl does. And of course dslams aren't cheap for the CO.

In some cases yes, in others no. At my house, our lines are looped and the telco refuses to lay new copper. Each of my next door neighbors can get DSL. But others on my block who have looped lines, cannot unless they opt to pay for the new copper themselves. We have all been quoted numbers in the double digit thousands. Is paying $10k+ for broadband really smart when I could install a T1 line for much less?

Do you think more is wired and ready or more parts of the country really do have really high buildout costs? We're the lucky ones that its even offered. The Rural Utility Service should be getting ready to distribute some loan money soon to help organizations build high speed infrastructure, including independant wireless isps and the like, in areas where there is no option. I encourage everyone to let it be known if they want more of this done, and maybe even consider giving it a go yourself if you've got what it takes! In short I want to see affordable broadband available for every home. I don't think government regulation of existing providers will do anything but stifle the industry.

Anyway I have a 103F fever so I hope that made sense

 

[DurocShark]

UPDATE: Added the actual text of the letter to the Chairman of the FCC.