Bandwidth By The Numbers

Who's Really Got the Best Deal In Internet Acess

I read with great interest this article that discusses the rise of broadband access, and how American households are increasing their usage of DSL services. This is when the phone company sends the internet signal over the phone lines at a higher frequency. As a suscriber to this service, it got me wondering if it really was the best deal.

When in the supermarket, when one product comes in a six ounce size, and the competition comes in an eight ounce size, smart consumers turn to the unit pricing. This converts the pricing into dollars per pound, and it becomes obvious which is the better deal. I decided to apply this to current internet access offerings. Read on to see the bandwidth per dollar calculations. (I will only be calculating on download speeds, and for simplicity 1 MB=1000 KB).

First up is the venerable dial up, also known as narrowband. While AOL is clearly overpriced, I decided to include NetZero's inexpensive $9.95 monthly access. That gets you 56k, the maximum speed of a dial up modem. Sure, that's really downhill...with a tailwind...being pushed by a Corvette to achieve that, but I'm giving them the benefit of the doubt here (it's really more like 50 to 53 Kbps). NetZero works out to 5.6 Kbps/dollar which is our starting point for access.

Next up is the digital suscriber line, better known as DSL. Verizon has the cheapest DSL in my area, at $14.95 a month for 768 Kbps. This is one of the most inexpensive options for broadband, and is still faster than a wireless connection using a g router. It's also much more economical than dial up as we're getting 51 Kbps/dollar. In other words, we're getting almost ten times the bandwidth for each dollar than dial up. Interestingly, a faster DSL connection of 1.5 Mbps for $29.95 monthly from AT&T is about as economical at 50 Kbps/dollar.

The fastest residential access by me is from the local cable company. Optimum Online can provide 10,000 Kbps of broadband access for $49.95. While at first the higher price tag appears to be overpriced, by unit pricing, we see that 200 Kbps/dollar is really the most economical of the deals offered!

Clearly there is more going on here than just data for dollars. Special promotions such as "double plays," and even "triple plays" (telephone, cable and internet bundled together in one package) entice consumers with savings for bundled packages. Included modems, and wireless routers serve to muddy the waters a step further. Let's not forget about activation charges, early termination fees, ease of setup, and other required services like needing to be a Verizon phone customer to get their DSL. Also, not all services are available in all areas limiting choice in some cases. Finally, don't forget about upload speeds, and the actual download speeds, which are often less than advertised.

In summary, it's clear that the more bandwidth you buy, the cheaper it becomes. Dial up access really is the worst deal in internet access by the objective measure of bandwidth per dollar. I would really like to see the cable companies come up with a fractional bandwidth deal to entice more middle class consumers. Anyone for a 2 Mbps plan for $19.99? That's what they'll need to go head to head with the lower DSL price points. I'm not sure there is an all out price war coming in broadband, but at least the prices should stay in this range for a while.

--Jonas