Econ 101: Competition lowers broadband costs — Tech News and …

Sending traffic over long-haul pipes is much cheaper in most places than connecting back to a local point of presence. TeleGeography looked at the price differences and discovered that the service offering and the competitiveness of the market determine how much more you pay.

The cost of local access to the Internet is disproportionately higher than the cost of sending the same bits over long haul networks, but the price difference is far from random. A study of access prices on long haul and local transit found that the technology used and local competition were likely to determine how much higher the cost would be.

The study1, by analyst firm TeleGeography isn’t really a surprise, but it’s a nice, thorough look at the difference in transmission costs for bits under the ocean as compared to transmission into

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