# Why is broadband so expensive? **URL:** \ **Category:** Factual Questions\ **Created:** [April 7, 2003, 11:51pm UTC](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186 "2003-04-07T23:51:14Z")\ **Posts on this page:** 11\ **Page:** 2
**Author:** ![mister\_me](https://avatars.discourse-cdn.com/v4/letter/m/cdc98d/32.png) [@mister\_me](https://boards.straightdope.com/u/mister_me)\ **Post date:** [April 8, 2003, 8:41pm UTC](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186/21 "2003-04-08T20:41:32Z")
Operational costs for broadband internet service (within my company, at least) are around $19.00 per month ---
**Author:** ![gypsymoth3](https://avatars.discourse-cdn.com/v4/letter/g/85e7bf/32.png) [@gypsymoth3](https://boards.straightdope.com/u/gypsymoth3)\ **Post date:** [April 8, 2003, 8:45pm UTC](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186/22 "2003-04-08T20:45:42Z")
why is it that a year or so ago you could get basic cable for $9/mo. i doubt it’s that low now, but why not? could you get cable internet over a “basic” cable that only gets about 15 tv stations? ---
**Author:** ![UncleBeer](https://avatars.discourse-cdn.com/v4/letter/u/977dab/32.png) [@UncleBeer](https://boards.straightdope.com/u/UncleBeer)\ **Post date:** [April 8, 2003, 9:21pm UTC](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186/23 "2003-04-08T21:21:41Z")
> [@](#): > > The buzzwords I remember are “dark fiber”, refering to the unused bandwith; and the “last mile” problem, which I believe is the issue of connecting the fiber from the main trunks in the street to individual homes and businesses. Dark fiber is just that; fiber that’s been installed in anticipation of future requirements. However, as **jweb** has said (kinda), while it’s there, it’s of very limited use for expanding to _new_ discrete systems. There’s quite a bit of dark long-haul fiber out there, too, but that’s not going to serve local distribution networks. You’re looking at probably 5 to 7 more years before a truly built-out condition is reached. And this, of course, depends on the economy. Fiber builds slowed dramatically in parallel with the slumping economy and it’s not uncommon for a mile of underground to approach $100,000 in materials, permitting, engineering and construction costs, especially in an urban setting. Note that these costs do not involve any of the electronics, or lasers, (not to mention programming) used to generate signal; they are for infrastructure only. And you are correct about the so-called “last mile.” In the most common current architecture, HFC (hybrid fiber-coax), fiber runs from the central office (headend) to a “node.” The node then converts the digital light data to typically two signals suitable for transmission over the familiar coaxial cable: one analog for the carrier frequencies between 54MHz and about 330 MHz and the other digital for frequencies from 330MHz to whatever the upper limit of the system may be (I’ve seen a couple that run all the way up to 1 GHz, but most are currently topping out at about 750Mhz). Frequencies below 42 MHz are used for your cable modem’s “return path.” The “last mile” refers to the coax from the “node” to the set-top convertor. I should note the coaxial cable can be rather expensive, too, as are the amplifers that are required to get from the node to your home. Coaxial cable, depending on the size and type used can cost anywhere from about 25 cents to 70 cents per foot. The “last mile” is kind of a misnomer though, at least in HFC architecture; it’s generally closer to three miles in a rural setting, or two miles in an urban one. There are some new systems being designed right now in which fiber goes directly to a convertor on the side of your house. These are called FTTH, or Fiber To The Home. As yet, the standards of build and transmission are in flux. Even the equipment is what could be called experimental. The latest numbers I hear claim less that 50,000 homes (in the U.S.) are currently served by this type of architecture with only a couple hundred thousand more due this calendar year. My company has two of these FTTH systems currently under contract for design. I guess all this is said to try and help you understand the costs involved in constructing a broadband network. There’s quite of bit of capital investment to recoup (and new installations planned) before prices will drop. ---
**Author:** ![Balthisar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/balthisar/32/2825_2.png) [@Balthisar](https://boards.straightdope.com/u/Balthisar)\ **Post date:** [April 9, 2003, 3:41pm UTC](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186/24 "2003-04-09T15:41:53Z")
> [@](#): > > \*Originally posted by gypsymoth3 \* > \*\*why is it that a year or so ago you could get basic cable for $9/mo. i doubt it’s that low now, but why not? could you get cable internet over a “basic” cable that only gets about 15 tv stations? \*\* I used to have Americast before DirecTV had local channels. It was $6.95/mo. for the bare-basic local channels. This was until June 1999 or so, so I guess it could have gone up a bit since then. More interesting, though, is when I got @Home service, serviced by Comcast. I’d already cancelled the Americast since DirecTV started offering local channels. Along with the @Home data pipe, the same cable also had the entire basic cable lineup from Comcast. Of course, @Home went broke, so Comcast (here) took over officially. Of course, prices went up after about a year – only a couple of bucks. Suddenly in January my bill started showing a $0.26 franchise fee! The FCC had ruled that franchise fees needn’t be paid for pure data connections (I never actually subscribed to the programming service). When I called to complain, they said I _did_ have programming service, and they automatically converted their data-only customers to their package. This kept the price identical except for the $0.26 tax, whereas not having the package would have bumped it up another $5 bucks. So in effect, if my local service offered SAP and a couple of super-basic Spanish channels, this would be quite a grand favor to me. But at least now I can watch one channel live while TiVo records on another, since I’m not just tied to the sat. receiver. So, **gypsymoth3** , the short version is, “you can.” ---
**Author:** ![handy](https://avatars.discourse-cdn.com/v4/letter/h/b5a626/32.png) [@handy](https://boards.straightdope.com/u/handy)\ **Post date:** [April 9, 2003, 9:55pm UTC](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186/25 "2003-04-09T21:55:33Z")
“why is it that a year or so ago you could get basic cable for $9/mo.” Our cable prices are set by the city council, who make a deal with the cable company on what we get. ---
**Author:** ![The\_Calculus\_of\_Logic](https://avatars.discourse-cdn.com/v4/letter/t/aeb1de/32.png) [@The\_Calculus\_of\_Logic](https://boards.straightdope.com/u/The_Calculus_of_Logic)\ **Post date:** [April 9, 2003, 11:03pm UTC](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186/26 "2003-04-09T23:03:41Z")
$30 CAD is $20 US. I’m paying $44.95 for my broadband cable. ---
**Author:** ![\_M\_Jonny\_B](https://avatars.discourse-cdn.com/v4/letter/_/c57346/32.png) [@\_M\_Jonny\_B](https://boards.straightdope.com/u/_M_Jonny_B)\ **Post date:** [April 9, 2003, 11:10pm UTC](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186/27 "2003-04-09T23:10:09Z")
So it seems that setting up the infrastructure is very expensive and it’ll be a long while before those initial costs can be made back. However, there’s still the issue of why some (stress on some) Canadian cities can get broadband at a much better price. Anyone here work in telecom in Canada or know that answer to that one? ---
**Author:** ![Beer\_Penguin](https://avatars.discourse-cdn.com/v4/letter/b/ad7895/32.png) [@Beer\_Penguin](https://boards.straightdope.com/u/Beer_Penguin)\ **Post date:** [April 10, 2003, 12:12am UTC](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186/28 "2003-04-10T00:12:58Z")
Nobody thinks it has anyting to do with the fact that broadband is run by either the phone companies or the cable companies, the two most corrupt, monopolistic, evil types of companies that exist?\* \*Opinion may not be valid outside of Texas. ---
**Author:** ![Gorsnak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gorsnak/32/7587_2.png) [@Gorsnak](https://boards.straightdope.com/u/Gorsnak)\ **Post date:** [April 10, 2003, 12:17am UTC](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186/29 "2003-04-10T00:17:32Z")
Well, I can’t speak with certainty, but I can offer an informative observation as someone paying Cdn$32/month for broadband. Around here there has been vicious competition between Shaw (cable) and Sasktel (phone - DSL). For the longest time, both were offering free install and first 3 months free for high speed access. It got so that people were just switching back and forth between them and never paying anything. Those offers are gone, replaced with ones designed to hold onto customers longer, but the competition is still there. If either starts charging more, they’ll lose customers in droves to the other. ---
**Author:** ![Ms2001](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ms2001/32/18463_2.png) [@Ms2001](https://boards.straightdope.com/u/Ms2001)\ **Post date:** [April 10, 2003, 1:48am UTC](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186/30 "2003-04-10T01:48:03Z")
A T1 line gives you about 1.5 Mbps for $500 to $1000/month. A cable modem gives you the same bandwidth (or more) for $50/month, and you’re complaining about the price? The cable/DSL companies have to pay for _their_ bandwidth too. A big reason that all those DSL companies went under recently is that you can’t make money buying bandwidth for $500 and reselling it for $50. ---
**Author:** ![handy](https://avatars.discourse-cdn.com/v4/letter/h/b5a626/32.png) [@handy](https://boards.straightdope.com/u/handy)\ **Post date:** [April 10, 2003, 4:53pm UTC](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186/31 "2003-04-10T16:53:41Z")
You can also get a two way satellite modem & dish. I don’t know what happened to them, they used to be sold at Office Depot. [Previous page](https://boards.straightdope.com/t/why-is-broadband-so-expensive/167186.md?page=1)