Study On Flexible Pricing Assumes Broadband's Price Only Going Up

[Commentary] A recently released study's central thesis is that by spreading the costs of network upgrades equally among all users we risk suppressing broadband adoption by raising prices for everyone, whereas if providers can charge more of those who use more we can keep broadband prices for others lower, which should help to bridge the digital divide since cost is the primary reason those who aren't online today don't subscribe to broadband. But the researchers assumed that flexible broadband pricing would only result in more expensive tiers of service being introduced but not any less expensive tiers. It implies that market dynamics alone aren't sufficient to keep prices down. In a truly competitive market a provider would not necessarily be able to raise their rates as it would have to take into consideration what their competitors are doing. Another dangerous assumption of this report is that all operators are investing heavily in their networks and therefore need to be able to charge their customers more to recoup that money. While some operators are investing heavily, many others are not, either because they can't, aren't willing to, or their investments don't cost all that much to make.