Sunday, June 08, 2008

Internet Pricing is all over the map

You have TWC trying metered bandwidth for consumers. Meanwhile, wholesale Internet backbone is down to $7 per MB at the 1GB port size in the major 8 cities (Dallas, VA, LA, San Jose, NYC, ATL, MIA, CHI). Speakeasy just announced $1297 for Business Ethernet DIA including router and free install. T1's are still at the $400 - $550 rate for 1.5 MB. Remember that much of these rates goes towards the last mile loop.

At the same time that Ma Bell is thinking about metering, it is offering free wi-fi at Starbucks and other locations. That's kind of schizo.

Businesses have always paid more for telecom - phone lines and Internet - because businesses have higher usage. It is more like a dedicated connection. But when you sell UNLIMITED and say it again and again, then don't be surprised when your users decide to use it Unlimited. In the days of dial-up, it was easy to see who was eating up a port all day and converting them to a dedicated line. It could be done with broadband as well. Cable and telco are trying to figure out how. But businesses still pay more. Home Offices, SOHO, and entrepreneurs working at home get to take advantage of the cheaper residential rates now, but if it went metered, a business account might make more sense.

P2P and video downloads affect the consumer ISP POP, but it also affects the wholesale ISP side just as much, because even with a bottleneck somewhere in the neighborhood, as bandwidth usage increases, all ISP's have to buy more backbone (wholesale).

The truth is that the Duopoly spends far too much time "protecting" its revenue streams and not enough thinking on Customers. ILECs have DSL, FTTx, 3G and LTE. All sold as Unlimited - but not really. Where's the FCC and FTC on this stuff? Taxpayers and ratepayers have paid over $2000 a head for a T3 to our house. Where is it?

Do you think the Duopoly will meter business broadband users? Probably not. The whole thing is about protecting the TV revenue stream. Period. We need real competition.

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