Friday, October 27, 2006

Broadband rates cheaper in Europe

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US vs. EU -- Broadband Rate Comparison. AKA, More Evidence of US Market Failure.
Created 2006-09-11 11:45
More and more European cities are getting into the Municipal broadband game, and they're blowing the doors off of US pricing models. How does this compare with US multi-megabit broadband rates? As it so happens, I have been looking for multi-megabit broadband for several community organizations I work with -- here's quotes from late July from AT&T for their new, supposedly innovative, "Opt-E-Man" services:
3 Year - 20 Mb - $3,300 monthly with a $0 nonrecurring5 Year - 20 Mb - $2,950 monthly with a $0 nonrecurring
3 Year - 10 Mb - $2,600 monthly with a $0 nonrecurring5 Year - 10 Mb - $2,450 monthly with a $0 nonrecurring
In other words, for 20% to 40% of the speed of what Paris is offering, I have to pay roughly 7000% to 9400% more. Let's let that sink in for a moment -- how could we end up with a system that provides a tiny fraction of the service for mark-ups that are tens of times more? Clearly the EU is doing something right that the US is failing miserably at -- and it's now spreading rapidly throughout the EU. Meanwhile, innovative projects across the US are being choked off by exorbitantly priced broadband services. One has to wonder, how many of these examples have to crop up before we start taking telecom companies to task for their continuing failure to maintain competitive pricing with the rest of the industrialized world.
[UPDATE1] A vigilant reader pointed out that one could get the "impression that municipalities are going to be the entities that offer FTTH in the EU. That is not necessarily true. For example, in the Paris situation that you mention, I believe that the provider will be a private entity. Also, there has been a lot of recent attention focused on the sensational take rates in the FTTH project in Hillegon, Netherlands, where the provider of FTTH is also private entity. Otherwise, keep up the great work." Very good point!

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