“As Costs Fall, Companies Push to Raise Internet Price” reports the New York Times, yesterday. In an excellent story, Saul Hensell debunks the ISPs which claim that they to increase the flow of your money in order to increase your Internet speed. But the actual facts may not matter, as the industry seems to be bending to trickery in order to get its way.
Why are the costs falling? Because that’s what naturally happens in technology pricing. The TV that you bought two years ago costs half as much today. $300 will buy you terabytes of hard-disk storage, where a short while ago it would buy about half that much. Another way of saying that costs are falling is to say that technology, at a particular price point, is improving. This means that the Roadrunner doesn’t need much of a financial rate increase in order to provide you a data rate increase!
Saul goes into greater depth in his Bits blog, analyzing the costs both at the access router (where the ISP connects to the greater Internet) and the last mile (where you live). It’s both informative (in a technical sense) yet accessible (in an easy-to-understand sense).
Tip: Both the article and the blog have some great quotes from Comcast’s Tony Werner who, a couple of years ago, explained to worried (angry) stockholders that data upgrades were inexpensive.
Inescapable Conclusion: The cost to upgrade the cable system is minimal.
Yet the cable providers have a problem – the faster the Internet gets, the less consumers may need its core product: television. So to convince you that everyone wants to pay heavy usage fees, they’ve turned to a fake consumer-advocacy group called the American Consumer Institute (ACI) to get the word out. As pointed out by Karl Bode at BroadbandReports.com, the group’s domain registration record shows that Stephen Pociask, “a telecom consultant and former chief economist for Bell Atlantic.”
Created On:16-Jun-2005 22:26:15 UTC
Last Updated On:20-Aug-2008 20:10:41 UTC
Expiration Date:16-Jun-2016 22:26:15 UTC
Sponsoring Registrar:Tucows Inc. (R11-LROR)
Registrant Name:Stephen Pociask
Registrant Organization:The American Consumer Institute
Registrant Street1:P.O. Box 2161
Registrant Postal Code:20195
It’s all a little bit spooky, but it seems that cable seems willing to win through trickery what consumers rejected outright. Regardless of whether or not you support pay-for-what-you-use models (I can, provided they’re fair), the wrong way to have a debate about it is to stoop to these kinds of shenanigans.