“Damned if you do, dial-up if you don’t.”
That was the quote at the beginning of the Gotcha Capitalism Internet chapter in 2008. Ha!
Below is an excerpt from the Internet fees chapter of the new edition of Gotcha, published this week. How does your Internet access — and your bill – compare to ten years ago? Tell me below.
Internet time moves fast. Ten years ago, your main concern was probably how long it took to download a couple of songs from iTunes. Today, you’re probably worried that when both kids are streaming Netflix movies on laptops upstairs, there’s an occasional hiccup in that NFL game you are streaming to your tablet. We’re getting much faster Net service and demanding more of it while paying not very much more than we did in 2007. Heck, not too long before 2007, I was writing books at Starbucks, *paying* $20 a month to access Wi-Fi there. Free coffee shop Wi-Fi is ubiquitous now.
That’s not to say prices aren’t up. With all the pressure cable companies are feeling on the TV side, they have to make up revenue somewhere. Broadband access is a much less risky business right now. After all, cord-cutters aren’t Net-cutters. They are likely to spend even more on broadband service after cutting off traditional pay TV. Providers have taken notice and are raising prices accordingly. As one example, Time Warner’s cable Internet service jumped 20 percent from 2013-15. Still, broadband can be had for less than $50 a month in many places. That’s more than fair. If you’re looking for an affordable and flexible broadband provider, you could check out something like clickbroadband.com.au to have a look at getting yourself a good deal.
Internet prices are hard to calculate, however, because so many consumers elect — or are forced into — double- or triple-play bundles that make it impossible to know the real price of pure Net access. Here’s just one example. The least expensive Internet-only Comcast package I looked up just now that you’d really want costs $70 a month. For $80 a month, you get that plus 140 channels. So, what’s the real cost of broadband there?
Serious shifts have occurred in the way consumers and corporations treat broadband, however. The main one: data caps. Home broadband is starting to feel a lot more like mobile phone Internet now. No more all-you-can-eat Internet at home. Bandwidth-hogging applications like Netflix have driven providers to charge devoted streamers extra each month. Comcast, Cox, & AT&T all charge per-data fees when users hit a cap, often 1 terabyte. So far, these limits impact a small percentage of consumers, but critics worry the caps will slowly come down as customers get used to them. They also provide an easy pain point for media companies to deploy if cable-cutting gets too threatening. Right now, consumers can drop TV and rely on broadband to watch a service like Sling TV. Imagine if Comcast wanted to choke off Sling TV and slow its exodus of customers? Lower data caps would be a handy tool.
That leads to the larger issue of monopoly power and Net neutrality, which was not on anyone’s mind in 2007. A broadband provider like Comcast could create a pain point simply by degrading service for content providers like Netflix or Amazon, again incentivizing customers to buy their pay TV service. Net neutrality sounds like an esoteric issue until you see how it could be abused by firms that own both the pipe that goes into your home and the content that runs on it.
Someday, increased competition will help. Wireless broadband — using your phone as a hotspot — could potentially create real competition for wired home service. But not yet. Wireless services have caps that are a fraction of traditional broadband caps. It’s still too expensive to deliver.
And for some consumers, stunningly, competition is worse today than 10 years ago. As we covered in the home phone chapter, telecom firms are trying hard to ditch their old copper wire for home phones. That means big changes for DSL, too. Bad service, or nearly useless service, is often the result. FCC tests show DSL service often doesn’t live up to speed promises. In places where Verizon has replaced DSL with FiOS, consumers often benefit. In places where FiOS hasn’t reached, some consumers still have only one or two broadband providers. Given that high-speed Internet access seems more like an essential life tool every day, this is shocking and shameful.