As of last week, Cable has become the choice among broadband users, even if the prices for DSL have become even more attractive. Currently, there are about 35MM+ Cable to 29MM+ DSL subscribers.
As reported by the AP, Reversing trend, cable modems win over DSL, telephone companies are essentially forced to continually lower prices (or) innovate. Ironically, Cable hasn’t lowered their, but instead turned up their bandwidth commitments they deliver to subscribers.
Now, I decided to take it upon myself to see which provider provides the best value per kilobit. In a head-to-head shootout between Cox and Qwest, Arizona’s incumbent cable and phone companies, respectively.
Cox vs. Qwest in Arizona. Cox Rocks!
Lowest total-cost-of-ownership: Qwest DSL 256Kb ($374 annually)
Best value-to-speed ratio: Cox Cable 15Mb ($0.0040 per Kilobit)
Overall best value: Qwest 7Mb ($0.0053 per Kilobit)
Source: Cox Communications, Qwest Communications; Arizona; 5/27/2008 (Internet);
Assuming new Qwest subscribers, agreeing to one or two-year agreements.
I think people are getting tired of being held in a contractual agreement with their telco. I never liked it — and for example; Qwest’s Spirit of Service™ is to lock customers into two-year contracts and then silently unleash their deregulated power and increase prices 60% above their contracted prices. I find this extremely poor consumer advocacy.
However, consumers must choose between two evils — Cable companies have been notorious for raising rates (though I haven’t experienced this, I don’t dispute it) on unsuspecting customers while supporting the lack of contracts. It appears that people are more comfortable more loyal to companies that respect their needs, no matter the price or quality of service.
As the speeds come down, Cable providers just turn their bandwidth caps up. All it takes is one setting for them to change and instantly, overnight, their users are upgraded. This definitely has paid off for a number of years. However, they may be up for a proverbial arms race against telephone companies’ Fiber-Optic service when broadband speeds reach 100+ Megabits. According to the current DOCSIS speed ratings, they have some time to think about it. We’re currently at about 20Mb max for consumer Cable Internet, but potentially handle over 343Mb/sec!
Verizon is one ISP that is doing their earnest to increase retention and profit margins. They’re working on rolling out Fiber across their metropolitan markets instead of copper-based telephone lines, they use fiber-optics. It’s no lie in their marketing that you can surf the Web at the “speed of light,” but it should be noted that all fiber networks terminate at a copper networks. But, if we know anything about traffic jams, you can only go as fast as the slowest person in front of you. The Internet is not any different. I applaud Verizon for offering their broadband services at an affordable rate as they expand their network. (Bragging rights: I paid $19 monthly for my 3Mb DSL, in Virginia, taxes excluded.)
As Fiber-Optics makes its way into mainstream among telephone companies, I anticipate a massive switch over once people discover it’s potential for one fee, one wire and one company. Cable Co’s will mirror what’s happening today by the telco’s, by continually lowering prices and profit margins. Perhaps they will regain their dominant spot on the top in the broadband game.
What do you think about Cable vs. DSL? Paying too much, getting too little?
Sound off in the comments!