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Internet pricing 101: Why costs are all over the map

“(ISPs) want to keep pace with others in the market. It’s a tough balance. If you lower your price just because the competition’s prices are lower, then everyone is racing to get to the lowest price,” said Brett Sappington, the senior director of research at Parks Associates. “The companies are anxious about doing that.”

So instead of always reasonable, fixed rates for high-speed service — as those fortunate enough to have access to Google-owned Webpass can expect — we get something else entirely. The promotional rate. Or, in other words, a means for ISPs to preserve the price of service while still offering new customers an enticing discount.

From the article "Internet pricing 101: Why costs are all over the map" by Jennifer Van Grove.

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