Over on GigaOM is a post titled “Bandwidth, Its Getting Cheaper,” which is really just a recap of a post by Phill Harvey summarizing the trend in what he’s been paying Charter Cable for bandwidth.
The way Phill looks at things, bandwidth is getting cheaper, because he used to pay $62/month for a 1.5 Mbit connection ($41.94 per Mbps per month), while soon he’ll be paying $80/month for a 10Mbit connection ($8.63 per Mbps per month).
It’s quite true that Phill is paying less per Mbps per month, but his actual bandwidth bill has gone up by $20 (or even more if you compare to when he was paying $32/month for 3Mbps service).
If you look at the averages, I’d guess that the average cost paid per month for high speed internet has been rising in this country over the last few years. The low cost option has long been something like $20/month for an intermittant 256kbps DSL connection, which is pretty crummy, so people avoid it. Meanwhile, the high end of what people can and do pay keeps going up which simple math tells us is going to shift the average up.
The other thing to consider is a 7Mbps jump from 3 to 10 Mbps isn’t going to improve people’s internet experience as much as a bump from 256kbps to 3Mbps. First off, moving from 3Mbps to 10Mbps is only a 3.3x boost, while the move from 256kbps to 3Mbps is an 12x improvement. Second, and perhaps more importantly, most of what most people use the web for is either constrained by latency, rather than bandwidth, or is constrained by bandwidth somewhere other than the last mile to the customer.
Either way, Phill’s $82/month 10Mbps connection is over 2.5x more expensive than his old $32/month 3Mbps connection. The question is, does it feel 2.5x better? I can’t speak for Phill, but for most people, myself included, I’m sure the answer is “NO.”
(The boost from 256kbps to 1Mbps upstream has got to be nice though)