Nothing is Going to Prevent Internet Access Prices From Falling

It is helpful to remember some historical facts whenever a regulatory policy is changed in a way that critics argue “will lead to higher prices.”

And that lesson is that internet access prices decline over time. That seems to be the case for fixed or mobile internet access, and certainly has been true for transport prices. Sometimes observers focus only on retail prices, not consumption. That is important, as users tend to consume more data over time, buying tiers of service that are faster, and often have higher retail prices.  

In other words, in addition to retail price declines, quality of service keeps improving (looking only at speed) while volumes consumed keep climbing as well. So cost per megabyte or cost per gigabyte matter. Now is it crazy to argue that prices are going to fall further, as much more supply, and more-efficient platforms are introduced.

Such price changes are clear in both consumer and business realms, as well. Consider T1 prices, DS3 prices or Ethernet prices.

For some observers, maybe nothing matters but the absolute level of prices. That is nuts. Businesses used to pay a coupe of thousand dollars to many hundreds dollars for a T1 line. Now Ethernet connections running a couple of orders of magnitude faster than that sell for scores of dollars.

As with our computing devices, quality has to be accounted for. A given amount of money buys substantially more than it used to.

Trend in Access Networks <ul><li>Wireline Access Technologies </li></ul><ul><ul><li>Speeds: +50% per year </li></ul></ul><...

source: Deloitte University Press
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