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Competition Breeds Lower Broadband Prices

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The more broadband providers a consumer has to choose from, the less they pay, according to the latest Pew Internet & American Life Project poll on U.S. broadband trends. Other findings: Home broadband adoption as of the end of May stood at 63 percent, up from 55 percent in May of last year; more Americans have cut back on cell phone or cable service than Internet (though that could be a result of dropping premium add-ons from those plans); and 34 percent of broadband users pay to receive a higher tier of speed from their provider.

Getting back to competition, there is a statistically significant distinction in the price for monthly broadband when more providers are available in a particular area, even when accounting for premium services like AirCards and other factors:


As for how they got their Internet service, the number of respondent that answered “fixed wireless or satellite” jumped to 17 percent from 11 percent last year. Pew notes that “the interviewer conducting the survey was permitted to prompt the respondent, for the wireless choice, about whether he had an AirCard service.” This may have generated additional “wireless” responses than the past. Fiber also made significant gains, with both coming at the expense of DSL.


7 Responses to “Competition Breeds Lower Broadband Prices”

  1. kgpl2009

    The Obama Administration and Congress have displayed their commitment to assisting with the deployment of broadband connectivity and job stimulation across the U.S. with the American Recovery and Reinvestment Act of 2009 (ARRA). Although delayed, a $7.2 billion Broadband Stimulus bubble is coming.

    This is a huge bubble compared to the amount of capital spent since the days. So, once RUS and NTIA approve specific applications for Broadband Stimulus Loans/Grants, projects will need to be started quickly and completed within 24 months. How will carriers make sure they have timely access to all of the products you will need to keep your project on schedule?

  2. Brett Glass

    Prices are affected far more by “middle mile” pricing and competition than they are by “last mile” competition. If bandwidth is expensive, ISPs must charge more. This is where action on “special access,” by Congress and the FCC, could do quite a lot for consumers.

  3. Does AT&T U-verse count as Fiber or DSL?

    Technically, it is DSL as the architecture is FTTN, but AT&T obviously advertises it as Fiber based.

    It would be interesting to know if the customers responded with the name of their broadband provider and the pollster interpreted the category or if the customer himself/herself provided the broadband category.

  4. Your graph flunks the Tufte chartjunk test and is misleading (the failt is with iWork’s Numbers’ defaults, of course, but they can be overriden). The origin of the graph should be at zero, not $30. It makes it look as if having more broadband options can slash your budget by close to 100% when the real savings is a more modest 30% or so.