Gigabit network competition drives down Internet prices

Building gigabit networks in metro areas drives down the price of broadband plans of all speeds, according to a study from the Analysis Group,

The study found that the entry of gigabit service into a market is “associated with a $27 per month decrease in the average monthly price of broadband plans with speeds greater than 100 Mbps and less than 1 Gbps. This is equal to a reduction of approximately 25 percent of the monthly standard price.”

Other key findings from the study:

• Competition between gigabit providers drives down price. When a second gigabit provider enters a market, the standard monthly price for gigabit internet declines by $57 to $62, a reduction in price of 34 to 37 percent.
   

• Even when considering plans with lower speeds, the presence of gigabit Internet is associated with a $13 to $18 decline in the monthly standard broadband price for plans with download speeds that range from 25 Mbps to less than 1 Gbps. This equates to a reduction in price of 14 to 19 percent.
   

• The availability of high-speed plans in a metro area increases the likelihood that other providers will introduce high-speed plans to match the speeds being offered by their competitors by as much as 17 percent.
   

Links:

When a city has gigabit Internet, prices for slower speed tiers drop (Ars Technica, Nov. 18, 2016)

Broadband Competition Helps to Drive Lower Prices and Fast Download Speeds for U.S. Residential Consumers (Analysis Group, Nov. 2016)