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News.com: Study: Broadband fees climbed in 2001

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    #2
    Lemming
    Registered Users Posts: 14,148 ✭✭✭✭Lemming


    Kersey believes the industry could move more quickly toward another pricing approach that would still be lucrative and make broadband more accessible to consumers.

    "It makes a lot more sense to me to make broadband affordable and sign a lot more people up," Kersey said. "You have to take the Wal-Mart approach and do it on volume."

    Retail giant Wal-Mart makes money by moving a lot of goods off the shelves at low prices. If broadband prices stay high, fewer people use the service, leaving fewer people whom providers can squeeze extra dollars from.

    Companies also can offer tiered pricing, which offers a lower price for lower speeds to get people hooked on the service, after which ISPs can charge higher prices for faster speeds and more features.

    For example, Kersey said companies could charge between $25 and $30 for a basic high-speed connection that runs six times faster than a dial-up connection as an entry point, then ask for more by piling on greater speeds.

    "It would be a way to target the tens of millions of dial-up subscribers out there who are paying $20 a month as it is" for a slower connection, he said.


    Not a bad strategy at all, even if it smacks a little of "loss-leader" tactics. Companies would want to be prepared to make little returns early on.

    Just a shame EirCon are too short-sighted to see the long-term benefit prospects if they went down this route. Even to get FRIACO out would be a major step forward in getting more and more people using the internet and made aware of faster and better technologies (ie. broadband).

    But then again .. I don't think I've said anything here that hasn't been said before elsewhere.


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