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Broadband Price Wars Begin
As the telecom companies continue switching customers from copper wires to fiber lines, cable begins cutting rates. And this is just the start.
It's good to be a new customer seeking broadband service. In some areas of the country, providers like SBC and Verizon have offered introductory rates for DSL connections at $15 to $20 per month.
That's a decrease in a market where monthly fees of $30 to $45 had been the norm. Cable companies like Comcast and Time Warner have been forced to drop introductory prices to $20 or $30 per month.
Existing customers can only fume at these deals, however. None of them are being extended to people who already have broadband service.
All the companies likely see inertia as their ally. If they can get customers to sign up for a service, they're less likely to leave. The more services a customer has with a single provider, the more likely they will stick around, not particularly out of loyalty but out of a desire to not have to deal with all the issues a change would involve.
Banks and other service companies have found this to be true, and attempts to sign customers up to as many single provider services as possible have become widely practiced.
As good as some of these introductory prices look, cable and the telecoms have yet to see the true pricing terror on the horizon come into being. Broadband over powerline (BPL) services have went into service as part of a partnership between Midwestern utility Cinergy and Germantown, MD-based Current.
Google and two investment firms have bulked up Current with a reported financing round of $100 million USD. In Houston, CenterPoint Energy will trial BPL services with global tech powerhouse IBM helping it along.
BPL networks can provide broadband access as well as Voice over IP, video on demand, and other services. Plugging an adapter into an electric outlet turns it into a broadband connection when BPL services are offered.
If you think there's a price war now, stay tuned, and keep an eye on your electric bill. To quote Jack Nicholson's Joker from the first Batman movie, "Wait til they get a load of me." Cable and telcos won't be laughing though.
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David Utter is a staff writer for WebProNews covering technology and business. Email him here.
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David Utter
