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Report: Low-Priced Broadband 26 Times More Costly on a Per Megabit Basis September 14, 2004 WASHINGTON, DC --- While low-speed broadband service is less expensive in absolute terms, the effective price of lower-speed, lower-priced broadband service can be 26 times that of faster, higher-priced service on a per megabit basis, according to a report released today by The Communications Media Analysis Group (The CMA Group), the new advisory services arm of business publisher Pike & Fischer “As the high-speed Internet market becomes more competitive, the era of ‘one-size fits-all’ broadband service is giving way to a new reality of complex pricing, packaging and service features,” Cynthia Brumfield, Senior Director of The CMA Group said.  “Telcos tout the low-cost of slower speed DSL services, while cable operators promote the faster download rates of their higher-priced broadband tiers.   Our analysis shows that while lower speed broadband service might save consumers money in absolute terms, higher speed service is cheaper once service capacity is taken into account.” The report, High-Speed Broadband Pricing and Packaging Strategies, examines 25 different high-speed Internet options offered by fourteen top broadband service providers.  The report concludes that on a per megabit per second (Mbps) download basis, lower-cost, lower-speed services have effective prices that can be 26 times higher than the faster services. For example, competitive communications provider RCN leads the list in terms of offering effectively low prices by offering a 7 Mbps download service priced at $28 when purchased in a bundle of services, or $75 on a stand-alone basis.  RCN’s effective minimum price per Mbps downstream is $4.00, while its effective maximum price per Mbps downstream is $10.71. In contrast, incumbent telco Qwest offers a 256 kbps download service priced at $26.99 when purchased in a bundle, or $31.99 on a stand-alone basis.  Qwest’s effective minimum price per Mbps downstream for this tier is $104.43, or over 26 times the price of RCN’s effective minimum price per Mbps.  The effective maximum price per Mbps downstream for this tier is $124.96. The 60+ pp. report is the first in a series of monthly reports prepared by The CMA Group for its members.  “We’re proud to deliver the best strategic analysis and insight into the broadband, IP and new media businesses,” Pike & Fischer CEO Meg Hargreaves said.  “Combined with access to our must-read publications, timely audioconferences, extensive data and expert advice, these in-depth reports provide our clients with an unparalleled resource for navigating cutting-edge communications businesses.” For a full table of contents and executive summary of the report, go to http://www.thecma-group.com/reports2.htm. Non-members can purchase the report at a premium charge. About The CMA Group The Communications Media Analysis Group (The CMA Group) is the advisory services arm of Pike & Fischer The CMA Group focuses on delivering knowledgeable, accurate and insightful analysis on the broadband, IP and new media businesses. Headed by industry veteran Cynthia Brumfield, The CMA Group provides members with one-stop access to publications, reports, audioconferences, data and expert advice on cutting-edge business and technology topics including high-speed data access, voice-over-IP, streaming media, on-demand media, home networking and competitive issues. For more information, go to www.thecma-group.com. About Pike & Fischer Established in 1939 and a subsidiary of The Bureau of National Affairs, Inc. since 1984, Pike & Fischer produces authoritative legal, regulatory and business information services and events. Visit the company’s web site at www.pf.com.