Rim Semiconductor Company (fka RSMI)

[theforce3]

intesting article on pricing and boadband and economy slowdown
what would they pay for 50 meg?
[Article ID: 459-2301]
http://www.broadband-daily.com/subscribers/index.htm?article_id=2301

Broadband Pricing All over the Map

As broadband penetration hurtles toward the 20% mark and with the prospect of a recession looming, one big question is: Will consumers cut back on what many consider to be the luxury of high-speed Internet access, slowing down broadband’s take-rate?

The largest factor driving the consumption of any product is, of course, price, and lately two (SBC and EarthLink) top broadband retailers have felt confident enough to implement price hikes. SBC and EarthLink both raised the monthly rate of their DSL offerings from $39.95 to $49.95, although in the case of SBC, the price change simply brought its DSL service charge back up to where it was last summer.

Whether consumers react to the economy’s weakness by cutting out faster and always-on Internet connections remains to be seen – the whole Internet market, much less the high-speed segment of that market, is too new to yield any insight into how price-sensitive customers are.

But, a review of the range of broadband rates offered by selected telco, cable, satellite and wireless providers does show one thing: Prices are all over the map, with downstream and upstream rates varying widely (see table below).

At one end of the price spectrum, the lowest cost option for broadband service, satellite provider DirecPC, which extends a $19.95 option for quicker access. The problem, however, is that this rate applies to only 25 hours per month and only 400 kbps service, not to mention the problem of telco return technology (although DirecPC is now gearing up to deliver two-way satellite broadband connections).

At the other end are $100+ options that provide for multiple PC connections and even routers, although these are primarily aimed at small office-home office users. Further complicating the picture is the advent of the long-dreamed-for bundling of telecommunications services. Long distance and telco giant Sprint is rolling out packages that include multiple voice lines, enhanced features and other goodies combined with high-speed service starting at $119.99.

Cable still offers the lowest price on a bit-by-bit basis, delivering three Mbps up to 10 Mbps for around $40/month. With this kind of variability, not to mention consumer confusion, the impact of an economic slowdown on broadband could be very hard to measure indeed.

HIGH SPEED INTERNET ACCESS SERVICE MONTHLY RATES FOR SELECTED ,
CABLE, TELCO, WIRELESS AND SATELLITE SUPPLIERS

Provider Monthly Fees Speed- Down Speed-Up
INCUMBENT TELCOS
SBC
Basic DSL 49.95*** 394 kbps - 1.5 Mbps 128 kbps
Enhanced DSL* $79 384 kbps - 1.5 Mbps 128 kbps
Enhanced DSL* $199 1.5 Mbps - 6 Mbps 384 kbps
Verizon
Personal Infospeed $39.95 640 kbps 90 kbps
Professional $99.95 1.6 Mbps 90 kbps
Power $189.95 7.1 Mbps 680 kbps
Bell South $49.95** na na
Qwest
MegaBit 256 Deluxe $30 256 kbps na
MegaBit Office $65 512 kbps na
Mega Business $80 768 kbps na
OTHER TELCOS
Sprint ION (DSL)
xt4SM (see below) $149.99 8 Mbps 1 Mbps
xt2SM (see below) $119.99 8 Mbps 1 Mbps
Direct $44.00 1.5Mbps na
DLECs
Covad (sold via multiple ISPs)
TeleSurfer $49 - $69 608 kbps 128 kbps
TeleSpeed (incl. multiple users,
service guarantees, routing -- all for
residential customers) $89 - $500 144 kbps - 1.5 Mbps 144 kbps - 1.5 Mbps
INTERNET SERVICE PROVIDERS
Juno DSL $49.95 608 kbps 128 kbps
EarthLink DSL 49.95*** 1.5 Mbps 256 kbps
Telocity DSL $49.95 640 kbps 90 kbps
SATELLITE
StarBand $69.99 500 kbps 150 kbps
DirecPC $19.99 - $49.99**** 400 kbps - 768 kbps telco return/64 kbps
CABLE
At Home $39.95 - $44.95 3 - 10 Mbps na
Road Runner $39.95 average 3 - 10 Mbps na
High Speed Access Corp. $39.95 average na na
RESIDENTIAL FIXED WIRELESS
Sprint Broadband Direct $44.95 - $49.95***** 512 kbps - 1.5 Mbps up to 256 kbps

* dedicated services
** $40 per month when bundled with other Bell South products.
***Applies to new customers
after 03/01/01.
****Rates reflect 25-100 hrs./mo. Additional hrs=$1.99/hr.
*****$39.95 bundled with long distance.

Sprint packages include (1) xt4SM, which includes four voice/fax lines with enhanced features such as
Voice Mail and Caller ID, unlimited local calling, 750 minutes of domestic long distance, plus
use of the Sprint ION Control Center web interface for controlloing telephone services.
(2) xt2SM which includes two voice/fax lines with enhanced features, unlimited local calling, 400
minutes of domestic long distance and use of the Sprint ION Control Center web interface.