Communications of the ACM
Why Isn't the Price of Broadband Obeying Moore's Law?
A new index from researchers at Northwestern University shows that the explosive pace in adopting broadband Internet access since 2004 has not led to a decline in prices, while the quality of broadband Internet access has been stagnant. Upload speeds, which have more than doubled during this period, is the one area that has changed.
However, price per megabit/second of broadband has not obeyed Moore's Law. Study co-author Shane Greenstein says allowing the broadband industry to regulate itself is a key factor, and he believes companies should have paid off almost all of the costs for building out their infrastructure. "We are approaching the end of the first buildout, so competitive pressures should have led to price drops by now, if there are any," Greenstein says. Maintenance should account for a smaller fraction of subscriber revenues, and broadband operation should be almost pure profit.
The lack of new entrants in the market means providers have no incentive to reduce prices, Greenstein says.
From Technology Review
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