Prices in the U.S. have about doubled since 2010, when the Stanford economist's paper predicted people want broadband so much doubling was possible.
Morgan Stanley found average prices of $66 in 2017, up 12%. Hidden fees often raise that. When Rosston wrote in 2010, most prices were $30-$45. An economist reading Greg's paper could predict prices likely would double if the companies could just signal each other to raise prices. The paper was written for the Broadband Plan where the staff could see large increases coming. Since costs of delivering broadband are down, regular price increases imply we only have weak competition.
Rosston found people were willing to pay ~$45 more for better broadband, which would increase if broadband became even more essential. (It has.) The only way to stop that was strong competition or regulation. Plan leader Blair Levin could see that, but he told me action for either was blocked at a higher level. I guessed that was Larry Summers in the White House, but never could confirm that.
The disease of monopoly-like price increases is spreading to Germany and Britain. Mike Fries and Liberty Global are doing regular price increases and Deutsche Telekom is following. In Britain, BT has just raised prices and I'm watching the others to see if they match. The strategy is like the Americans. Increases that aren't so high the regulator would step in but enough to lead to much higher prices in a few years.
Half the U.S. has only one choice at 25 megabits or better. Few of the rest have more than two.Add a comment