What does a GB of Internet service really cost? The worst case scenario (2011)
There&#x27;s more than a few problems with this particular assessment as it relates to &quot;what we pay&quot; and what kind of service we can expect for that price.<p>On the cost side, I suspect the cost of support, service and customer acquisition significantly affects the cost&#x2F;GB.  I used to switch between UVerse and Comcast every 6-12 months (the point at which the promotional prices ended) because it was very easy to do so and they didn&#x27;t have a requirement that I remain for a contractual period of time.<p>However, even given all of this, &quot;what we pay&quot; <i>is barely related</i> to &quot;what it costs&quot;, at least in most of the US.  In the majority of markets there is often only <i>one</i> service provider that provides service at speeds in excess of 25Mbps.  Sometimes, there is two, but in the state that I live in, the choice is often &quot;Cable Provider&quot; vs &quot;Phone Provider&quot;.  If you&#x27;re lucky, your phone provider is AT&amp;T  on the newer network (with those giant boxes in each of our subdivisions -- no FIOS here) and they can deliver more than 25Mbps (inbound) and the other is Comcast at up to 100Mbps.  Both have caps (unless you are a business subscriber) with AT&amp;Ts at 150GB or 250GB depending on the service and Comcast at 250GB.  A small number of areas have an additional cable provider (usually Wide Open West) that offer reasonable speeds and I <i>think</i> WoW doesn&#x27;t do caps but I&#x27;m not sure.<p>The price you pay from each of these providers will be different depending on how many competing providers exist in the area.  AT&amp;T U-Verse at much higher speeds costs less in my house than AT&amp;T U-Verse in my family&#x27;s cottage up north (it tops out at 12Mbps with 150GB caps).<p>Until there is competition offering uncapped service (and customer demand for it), it doesn&#x27;t really matter what the cost is.  The folks at these companies charge what they can get away with given the market they&#x27;re operating in, which in many markets is either an absolute monopoly (me, up north with AT&amp;T) or them sharing the market with a single competitor who is able to deliver faster or slower service than them with identical data caps.  The cost for entering a residential market is high, riddled with regulation and practical concerns, and the companies have lobbied hard for restrictive state laws that prohibit municipalities from providing a competing service.<p>Prior to them setting up this whole &quot;pay for unlimited service&quot; arrangement, I ran afoul of the 250GB cap and immediately switched to Comcast Business.  The difference is <i>stark</i>.  I had some service done with AT&amp;T that resulted in one of the AT&amp;T guys putting a shovel through the Comcast Business wire at 4:30 in the afternoon.  I called them up and they sent someone to my house at 6:30 PM.  I also get a special phone number, not open 24-hours, but I rarely talk to more than one person about the problem I&#x27;m experiencing and the hold times are minimal.  He fixed the service (at no charge -- despite it being a competitor that <i>caused</i> the problem).  That was one experience, but I&#x27;ve called support a few times and I&#x27;ve always had my issues addressed <i>quickly</i>.  When I was a residential customer, waiting several days for a service call was normal.<p>I pay more than <i>twice</i> as much as the residential service at $130&#x2F;mo for the same speeds, but I have no data cap and routinely use 2-3 TB&#x2F;mo according to my router.  I&#x27;m on the same wires, using the same company, paying a lot more, and getting no caps, and what I&#x27;d characterize as exceptional customer service.  This almost irritates me <i>more</i>.  It&#x27;s not an issue of being unable to provide this kind of service to everyone, or an issue of network capacity, it&#x27;s an issue of being unwilling to provide this kind of service to everyone because the market dictates that they don&#x27;t need to in order to be (very) profitable.<p>Now, I suspect that the small businesses that they target this service at probably don&#x27;t use the kind of bandwidth or have the performance requirements that I do (I&#x27;m in the 2-3TB&#x2F;mo range).  My dad&#x27;s 9-person company was happy with IDSL at 1Mbps bidirectional until two years ago and would probably still be on it if Comcast hadn&#x27;t wired up the park and undercut the other providers by half, so they&#x27;re competing for a different kind of customer in small business.  And this may bean that the small business market actually has <i>more</i> competition since many are willing to accept slower service offerings as identical products (or maybe the manufacturing non-tech heavy small businesses in my area are just that way).