Getting the broadband price right

Dave Burstein:

"DSL subscriber growth is largely determined by price." … The direct cost to a telco providing service in volume is $12-20 per month, including a return on the DSLAM and other capital cost. The profitable competitive price for DSL and cable is between $25 & $35. $40 may be the monopolist optimum, which is how Comcast and SBC are calculating it. My best guess is that $30-35 is better, even for a monopolist, because demand will grow, but that’s a very hard one to prove. Gary Betty of Earthlink tells me his market research says half the U.S. dialup users would switch within the year if the price were $30.