The U.S. government doesn’t keep an index of broadband internet prices by which to evaluate the success of its broadband promotion
policies – the statistics they do have are mushed together with prices
for dial-up access – so a couple of researchers at Northwestern
University decided to build their own.
What they discovered is that broadband internet prices have remained nearly stagnant since 2004, despite the explosive pace of adoption since
then – from approximately 20 percent of U.S. households in 2004 to more
than 65 percent today.
In that time, the only thing that has really changed is the quality – just looking at upload speeds, they’ve more than doubled in that time.
But that’s nowhere near what you would expect if the price / megabit/s
of broadband were obeying Moore’s Law.
I can’t seem to figure it out myself…and I was trained as an economist.
There’s definitely something going on here that we aren’t accounting for.
Possibly, it’s the same thing as with Cable-TV rates: those deregulators promised us prices would go down if we just let them
colludeum, er, compete.
Perhaps it is because while broadband and cable TV have been somewhat deregulated at the federal level, they still need county by county licenses to string cable or fiber. There currently are very few counties in the U.S. that license more than one cable provider. Verizon managed to get around this by taking advantage of some interstate commerce laws but cable providers have been less successful. Opponents of deregulation may want to remeber life before MCI’s lawsuit broke the ATT monopoly.