Report: broadband prices staying unnaturally high; lack of competition to blame

Broadband prices remain high even as network build-outs are finalized and the consumer electronics devices to them drop, according to research conducted by Northwestern University's Kellogg School of Management. The report, researched and written by Northwestern professor Shane Greenstein points out that broadband prices dropped off only between 3 percent and 10 percent between 2004 and 2009 and this is "nothing like the rates of price decrease that characterize the rest of the electronic world."

No doubt fueling sentiment for net neutrality, the report placed the blame squarely on a lack of competition and the fact that broadband is a non-regulated information service. Greenstein admitted that he believed built-out broadband infrastructure would cause prices to plummet and "I am surprised they have not."

If Greenstein thinks things are bad in the U.S., he should check out research from Ovum which says that "the cost of broadband in some emerging countries is three times as high as in mature markets ... (which) makes it an unaffordable luxury for all except a small group at the top of the socio-economic pyramid."

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