Broadband Prices and Digital Discrimination

Infrastructure discrimination is where lower-income neighborhoods tend not to have the same quality of technology as more affluent neighborhoods. Price discrimination is where cable companies have started to price broadband differently by neighborhood based on demographics. But a more basic element of price discrimination also needs to be recognized. The big cable companies have raised the price of broadband at a much faster rate than inflation, which is putting the cost of a broadband subscription out of reach of a lot of households. If you do a web search on older broadband prices, the first couple pages of Google search are full of fraudulent articles from USTelecom and big internet service provider (ISP) lapdogs like BroadbandNow that tell you that the cost of broadband has dropped over time. But the out-of-pocket cost of broadband has increased significantly faster than general inflation as measured by the Consumer Price Index. Comcast and the other big cable companies have raised rates between 2.5 and 3 times faster than inflation since the end of 2005.  These super-high rate increases are perhaps the ultimate price discrimination – the big cable companies are pricing millions of homes out of the market.  Raising prices when the company’s sales stagnate might be the ultimate proof that Comcast is a monopoly that can raise prices with impunity in most neighborhoods.