Broadband Broadens Its Pitch (cont’d)
By Mike Musgrove
The
average monthly cost of cable modem broadband access crept up
from $33.22 in the second quarter of 2000 to $45.31 two years
later. DSL broadband prices have been a little more stable,
rising from $50.90 to $51.36 over the same period, according to
ARS.
But just
about every broadband provider (85 percent, according to ARS)
has ongoing promotions to make the first three, six or 12 months
cheaper for new customers. So in some
ways, prices are going both up and down at the same time. "The
effective annualized monthly prices for broadband actually
declined when you work in all the promotions, though the
absolute prices are going up," said Mark Kersey, an analyst at
the firm. Providers are also jiggling their price structures to
see if slower but cheaper broadband will draw new users in.
Covad Communications Corp., a Santa Clara,
Calif., telecommunications firm that supplies the DSL circuits
used by EarthLink and other Internet providers -- and sells
service under its own name -- is one of the first companies to
offer "tiered" service. That is, customers can choose to pay
more for faster broadband access or less for slower broadband
access.
Covad
figured that it could advertise a cheaper plan as costing the
same as a dialup Internet subscription plus an extra phone line.
That plan, at $39.95 per month, still offers download speeds
about seven times as fast as you could get with a dialup
internet subscription, but half those of other forms of
broadband. The company now offers a $49.95 plan and, for
high-end users, a $69.95 option; EarthLink plans to roll out a
similar sort of price structure this year.
