So let me guess, the study was funded by the cable industry.

"Silly you - did you think you were overpaying for broadband access?"

No.

If I did, I never would have signed up for it.

ProTip: If you think you're overpaying for something, stop paying for it.

MY concern is that this will be used as justification for price increases at a time when people are trying to save money wherever possible.

If your broadband bill doubled overnight, would you keep it?

But... but I thought that Americans were overpaying for broadband by $23 billion and should switch to dial-up!

Yeah, I think I overpay for broadband. I guess cable companies in other countries that get speeds 3x faster for 1/2 the cost are super chumps.

@TheUncleBob: Flash of Logic: There are things you cannot easily do without, overpriced or not.

I have DSL, switched from broadband cable, so that I now pay the same for phone/Internet as I was for broadband cable. Haven't noticed any speed differences (speedtest.net shows me the difference, but for all practical purposes I don't notice it while surfing). $60 total (including all the taxes/fees) is reasonable IMO.

@TheUncleBob: Yeah, that medicine I need to live is overpriced, so I'm going to stop paying for it. Same for my car insurance and mortgage payment.

they are still making money . the value is the value . these asshole marketing folks can put there study right up there rear .

@TheUncleBob: I do think its overpriced compared to what other localities that share my geographical similarity are getting.

But then, there's no competition here.

@henrygates: I'm on slow DSL that I believe was some legally required offer, hidden way back in the website. $10 a month. Don't know what I'll do when it expires.

@TheUncleBob: Hahaha. You should publish a ProTip book for life. And then overcharge for it.

Broadband has become a need much like electricity or water. Of course it will be highly valued. I imagine people value breathable air much higher than $60 billion, and we get that for free.

They base "consumers perceived value" of broadband at least partially on the fact that people use the internet for all sorts of things, from employment to healthcare.

Well yeah, and I can do all sorts of things with a tin can, but it doesn't mean I want to pay more than about $.10 for it.

What they don't talk about is how much it actually costs the ISPs to provide the service. That would be silly though, because that would make sense.

Lies, damned lies, and statistics.

I wouldn't say our broadband is overpriced if we could count on it to WORK CONSISTENTLY and to get ACCEPTABLE SERVICE when, for some unavoidable reason, it does not.

Instead, we pay for getting the runaround from our local monopoly.

@esc27: no, but we can and should pay for clean air. that ain't free.

How about some fiber-to-the-curb like you assholes promised 10 years ago!

We gave them BILLIONS, and they gave us nothing.

That broadband is good is I think without question, but only a perfectly greedy monopolist can charge the entire value the customer gets minus one cent. Marginal cost vs demand should set the price in a competitive market, not value produced.

@esc27: I'd compare it more to gas. A lot of people have it and a lot of people find a different way to get their fuel, depending on where they are. It's the internet rather than the broadband connection thereto that's the real need.

And they got the first figure exactly how?

Yet another informative and profitable study by the Rectally Generated Numbers Thinktank!

RectalGen: We make up the statistics that lobbyists need.

@geargutz: I'd just steal wifi.

This is a supply side survey. They appear to be testing the waters for rate hikes and trying to determine at what point demand will fall off. Providers are more likely to just add additional fees so they can keep their advertised rates down but at the same time increase their revenue.

Great. Now we're going to have to pay way more and I won't be able to afford it. :P

I pretty much live online, but if the price goes up 2x I won't have a problem settling for dial up at home. Just more reason to go outside.

So that computer I bought in 1986 with a 45 meg hard drive and 4 megs of ram for over $3000 should now cost me $3,000,000 because it's a thousand times faster and better?

I have some reservations about that methodology…

How much more bargain do other countries get, I wonder?

@geargutz: Most people probably would. Just look at the gas prices of +$4/gallon a year ago. Most people still kept driving. They may have altered their plans a bit, but there were still many cars on the road and traffic jams every morning and evening.

Broadband service (Just like an automobile in the U.S.) has now become almost a necessity. Many people have adopted VoIP as their primary phone line, and have canceled their newspaper because they read their news online. E-mail has replaced the USPS for most correspondence, and many people have opted to have their bills delivered and paid online.

While people could dump their broadband, it would require a major re-organization of their life. People won't drop broadband, but they may opt to save some money by downgrading to a lower speed...afterall, for normal web surfing/e-mail/online banking/VoIP, there really is little difference between 3.0M/756K and 10M/5M service, so why pay an extra $25-100/month for only a marginal increase in performance.

Right, this is "consumer surplus" from econ 101. Because the demand slope is decreasing as price increases, it means some people would have paid more for the same service, but since the price is lower (to maximize profit for the firm) these people 'saved' money. If you tally all that up it's the 'consumers surplus'.

Just because I value a product at a level and am paying beneath that level doesn't mean I'm overpaying--it means that I have a surplus, without which I wouldn't buy the product unless it was a necessity. All the study says is that they have valued the market consumer surplus to be $32B, not that we are underpaying.

Statistics, indeed.

REAL Broadband speeds like they have in Japan would be priceless.

Crappy, lagging, hanging Comcast... not so much.

@I Love New Jersey: Ding, we have a winner! Why did Consumerist post this story without commentary? As others have noted, people in other countries pay less for broadband and get faster speeds. Unfortunately, most of the US has 1 or 2 choices (cable & telco) - without competition, the consumer gets a raw deal. At least we're not as bad off as they are in Canada, eh.

@Rachacha: I can see a difference between 8 meg comcast and 20 meg FIOS. It doesn't feal as substantial as dial up to DSL but it's still a nice change.

@floraposte: Exactly! I am amazed at people who can't go a single day anymore without going online. I've done it twice in the past week, just because I ended up doing other things with my time.

The world didn't burn before the WWW came online. Internet is important, but I'm not sure it should be considered an essential utility.

@Rachacha: And why do you think $4 gas failed? It was because demand went way the hell down and the spectators realized the price point just wasn't viable long term.

@LostTurntable: If you're still paying for medicine, your car insurance, and your mortgage, then clearly you're getting enough value to justify your cost.

There's a difference between paying more than the value you're getting (which is what TheUncleBob meant) and paying more than you'd like to.

@geargutz: No.

I actually do still have a landline, and I imagine that modems are dirt cheap these days. If anyone else under my roof disagrees with this, they can pony up.

As for my employer and the occasional remote log-in, they have supplied me with a laptop computer and cellular modem, so, no problem.

If they want to keep me as a customer, they'd better keep the price below or close to where it is, else give me something I actually want in exchange for a higher price. (Hint: more bandwidth won't do it, nor will privileged content, and I honestly have no idea what would do it.) Don't get me wrong; I will miss it, but I will make do.

Numbers generated from the Federal Bureau of Made-Up-Numbers-I-Just-Pulled-Out-Of-My-Ass. Home of such factually sound statistics as fthe RIAA's "We loose 12 Billion" a year because of downloaders.

i can totally see the survey that was taken by users to come up with that 60 billion dollar figure:

"How much would you pay per month for a 50 megabit down, 10 megabit up, 99.99% reliable, unlimited bandwidth, with absolutely no retrictions? "

and i'm sure the typical answer would average out to be $75 a month, and they extrapolated data from that.

and of course most every broadband user is paying $15 - $50 a month month for 500kbit - 10 megabit dsl, cable, and satellite connections because that's all they can get where they live.

so yes, you do have a potential user base that's now paying 28 billion where they WOULD spend 60 billion, but the part that's totally left out of the figures is that the entire broadband network coast to coast would need to basically be rebuilt from scratch.

I love Consumerist. Your silly stories make me laugh time and time again, and raises my awareness of all the bad (and good) things that can happen to people in our crazy consumer based world.

But please for the love of god quit posting these "economists" ridiculous claims. I commented on the EA story yesterday to about the same effect.
It is ridiculous that this people get paid to make such claims. I would like to know how much they make, and if it is a sufficient amount, how I can get it on the racket.

@starrion: And the Intertubes Innovation Alliance is actually (co-)headed by SuperLobbyist Bruce Mehlman, whose firm works for anyone and everyone: [www.opensecrets.org]

@cecilpl: No, you're not "getting enough value to justify your cost," you're paying what someone else has decided they want from you, and if that person or organization happens to have a monopoly on the good or service, you are stuck.

If you need a certain medicine to stay alive or, at the very least, to maintain a decent quality of life, you'll pay whatever it takes to get it. That does not mean it's a good value relative to the cost incurred to produce it.

@veg-o-matic: A better way to put it is that they're confusing content with access to content.

The ISPs don't provide content (for the most part, let's hope it stays that way). Therefore, the study is using data that does not answer the question they've posed for themselves.

The consumers value the content of the interwebnets at $60B, but we do not value our access points at nearly that much.

@MFfan310: Invalid parameters!

Hmm. Let's see.

@dragonfire81: I could live without it. It might suck for a bit, but I'd survive. What about folks who do business online? What would they do?

@veg-o-matic: Well said. Comment of the day. :)

Just to give one a sense of how the US relates to places with the most advanced broadband service: If you were in Japan you could take what I pay for cable internet, about $55/month, and get at least 100mbps fiber optic service. My download speeds with cable are in the 6-8mbps range. So yeah, don't try and tell me I'm underpaying for broadband. It's the highest-margin product the cable companies sell and most of them face very limited competition and price their service accordingly.

Compared to other utilities, American broadband providers don't provide a very reliable service either. I have to reset my modem and router 3 to 5 times a week when the cable cuts out. I sure as hell don't lose power or phone 3 times a week.

The big difference between the US and Japan is that in Japan broadband at home is treated as a public utility where everyone is entitled to access. Whereas in the US it's treated as a premium service. Likewise, Japan has made substantial public investments in broadband infrastructure, while in the US it's left primarily to private enterprise. As long as expanding and improving broadband is treated as a purely business case the US is going to lag the rest of the world.

@henrygates: $60 for DSL? Man I wish we were neighbors, I'd split 1/10 off of my $30 cable internet and charge you only $44.99.

@Blueskylaw: I don't understand your question.

If they sent you a survey and asked you how much you valued the '86 computer, you probably wouldn't say $3,000.