Internet speed and monopoly power

My mom used to have a 16 MBPS (mega bytes per second) internet connection a few years ago in India. However, in the past 3-4 years, there’s been a slew of new competitors in the broadband market and her internet speed right now is 75 MBPS. Thanks to the competition, the costs have also gone down every year.

We had a 150 MBPS connection via Comcast at home last year. Comcast recently notified me that the 150 MBPS was actually a “special offer.” And, if I still wanted it, I’d have to pay $15 per month extra. I could keep my current rate – but they’d lower our speed to 60 MBPS.

I called up our apartment’s front office to check what my options were if I didn’t choose Comcast. She explained to me that there were none.

So, I called Comcast back and said I’d take the downgrade.

Now, 60 MBPS is more than sufficient for normal internet use. In addition, this is definitely a first world problem. However, it illustrates the cost of a regulation driven monopoly. When your users have nowhere else to go to, you can do the bare minimum and get away with it.

It doesn’t mean you should. But, the incentives to drive profits and “shareholder value” at the expense of customers with no alternatives is very powerful indeed.