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Think your broadband is slow and expensive, then read this
Tuesday 21 January 2014 18:29:57 by Andrew Ferguson

How does a 3 Mbps broadband connection for £16.50 per month with a 5GB usage allowance sound? Not very enticing we suspect and yes this is for an ADSL product not 3G. The price increases significantly if you were the average UK consumer as you would probably need a plan costing around £60 per month.

Well those prices are the reality for one small part of the United States where the local provider, is charging well above the rate for similar towns in the state of Iowa. Arstechnica has more on the story, including comments from the telco themselves. It seems the high prices are in part due to their small size (just 1,000 customers) and the geographic spread over 160 square miles. The big shocker for UK readers is that the teleco receives government funding of $169,196 per year, a decrease from $454,200 in 2009, and with falling revenue from the access charges adding to the financial problems means that the provider is unable to provide a cheaper service.

Winthrop, Iowa on Google Maps looks just like so many other rural towns in the United States, i.e. the majority of people live in the few streets around the main road junction and the story of slow and expensive Internet access will be a story well known to anyone who has travelled the US outside the standard tourist areas. It would no surprise us that for every Gigabit FTTH/FTTP network there is a corresponding town with a situation not unlike that of Winthrop.

For those who are chasing the money with regards to the BDUK programme in the UK, also take a lot at a local US operator who offers Gigabit fibre and LTE to its 18,000 customers, which is only possible through a $81m grant from the federal government and a loan of $35 million. The retail service from Vtel is a reasonable $48 to $70 for the Gigabit service and the bundled telephone line, though as with all US services you need to add sales tax and other FCC fees.


Posted by csimon over 3 years ago
Well! I have a 0.4Mbps ADSL connection and I don't get any price reduction because of it, I pay what everyone else pays for ADSL. The market provides better service at lower prices remember.
Posted by YaZiN over 3 years ago
No mention of the Wireless product that they supply then. Wireless provision is broadband as well (though it must be the unloved black sheep of the family).
Posted by Br0kenTeleph0n3 over 3 years ago
Vtel's funding of $116m comes to about $6,630 per subscriber (17,500 subs). Amortised over the expected 40 year life of the fibre, that's $166 a year or $14/month (rounded up) for capital costs.
How much would we pay BT to connect 17,500 premises at 1Gbps in what sounds like a fairly rural area?
Posted by brandscill over 3 years ago
In the arstechnica article they talk about their wireless product a lot but their actual website lacks all the details. When I went to the wireless section I thought they were only going on about mobile signal.

I think given the lack of competition in the US this isn't a surprise, luckily for us the reason our BB is relatively cheap is the low access costs for providers and the competition it brings. Unless you live in Hull of course.
Posted by gerarda over 3 years ago
I would love to get a 3mb service for £16.50 a month. That is 5 times more value than I get now
Posted by gah789 over 3 years ago
Welcome to the world of maintaining rural telephone systems. The underlying issue is the loss of telephone revenues from access charges and USF payments. Since the copper is increasingly used for ADSL service it is reasonable to recover more of the local loop cost via ADSL charges. The alternative is to abandon the copper and focus on wireless broadband. How much would anyone like that?
Posted by andrew (Favicon staff member) over 3 years ago
Gerada A choice of wireless or adsl both with up to due to range limits. The US does not have magic adsl physics still apply
Posted by andrew (Favicon staff member) over 3 years ago
@valueformoney The same as they are getting now for areas they deploy FTTP in bduk projects

Gpon Fttp is the same cost to install whether its run at 1Gig or 330Meg its usage and isp costs ie runnung costs that will vary.
Posted by 21again over 3 years ago
Not that many years ago I was paying 18.99/month for a 2Meg 5GB usage connection.
Would it be fair to say that once the big ISPs appeared on the scene to provide BB via LLU to some of the population that the prices for packages started to drop as more of the masses started to want to get online, not just the web geeks :P
I'm still on the same exchange and can't get faster download speeds but pay six pounds/month for unlimited usage but it is part of a bundle of phone+BB
Posted by gerarda over 3 years ago
Interesting to note that the US equivalent of Ofcom does not count anything less than 4mb down and 1mb up as broadband. I wonder what that definition would do to the coverage stats in this country?
Posted by richardhsmith329 over 3 years ago
Try this for expensive -
Posted by csimon over 3 years ago
@21again: "Would it be fair to say that once the big ISPs appeared on the scene to provide BB via LLU...that the prices for packages started to drop". Probably, but it's just stats & there may or may not be a correlation. Line rental has increased dramatically since big providers with their LLU came. Even though the cost of my ADSL has dropped since 2004, the total pacakage (and the technology & poor speed) has stayed roughly the same, therefore competition hasn't done much for this. You can get reductions but it's down to bundling and lock-in deals, which is anti-competitive.
Posted by andygegg over 3 years ago
@gerarda - if they couldn't call it broadband below 4Mb/s the ISPs here simply wouldn't accept an order from anyone outside a conurbation. Even 0.5Mb/s is better than dial-up (just about...)
Posted by brandscill over 3 years ago

Indeed! Like the poor folks on St Helena £97.20 for their gold package and 9p for every mb over! The speeds aren't even attainable as the 40mbps satellite connection is shared with every business and resident.
Posted by clivegm4fzh over 3 years ago
It would be nice to get 3Mbs, I am lucky to get 0.7Mbs yet I pay BT the same amount as those with faster speeds. Sadly inmany rural areas there is no competition at the exchanges.
Posted by WWWombat over 3 years ago
The FCC redefined broadband from 200Kbps to 4 Mbps in 2010, taking it from a definition based on technology into one based on usage. The number chosen seemed to be one to allow video to be watched, so is similar to demands here that iPlayer needs to be watchable everywhere.

It looked more like a political move that allowed it to shake up the regulation market in the US without any new demands actually being placed by government, and IMO a cynical back door way.

It really reflects what we already know here - that a USC should be in place, and that it needs to rise over time.
Posted by New_Londoner over 3 years ago
IIRC the highest broadband prices in the UK may well be those charged by one of the Isle of Wight wireless operators. Can't remember the name off hand but the prices were verging on the ridiculous, AND come with tight usage caps, rolling 2 year term etc.

Posted by brandscill over 3 years ago
@ new_londerner

The Isle of wight is fairly well catered for with Wight Fibre and the usual offerings from BT Talk Talk Etc.

Admittedly their wireless offerings are as poor as many of the others around the UK but at least they're not the only option.
Posted by New_Londoner over 3 years ago
Found the company in question, it's called Click4Internet. Take a look at the prices, I'll be surprised if any other UK ISP is more expensive.
Posted by kelper over 3 years ago
Check out the Falkland Islands broadband charges!
5150MB for £75 a month
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