Thursday, November 29, 2007

Report: AT&T hikes dial up prices

The story here isn't so much about Ma Bell raising dial up prices. Rather, it's that AT&T is leaving lots of money on the table by pricing DSL too low relative to dial up prices.

AT&T's costs to deploy DSL are obviously going to be higher in areas where cable loops are long and remote terminals must be installed in order to distribute the service. Its one-size-fits-all pricing scheme for DSL would be fine if there were enough total revenues to subsidize these higher costs. Clearly there are not. Consequently, AT&T and other telcos leave more than 20 percent of their U.S. service areas with no DSL service whatsoever.

The obvious solution would be to charge higher rates for DSL -- including for reseller ISPs -- in higher cost areas where 20 bucks a month for service doesn't allow for a reasonable profit. That would gain a lot more wire line broadband and potential bundled service customers who'd gladly pay two to three times that amount rather than be stuck with dial up or the high up front costs and sluggish connections afforded by satellite "broadband."

1 comment:

Anonymous said...

AT&T seems to be promising way more than they can deliver...Overpriced accounts and the Non existent $50 visa cards??

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