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Democracy & Technology Blog Price elasticity of broadband

Hance Haney
May 11, 2007
Net Neutrality

Stephen B. Pociask of the American Consumer Institute finds that broadband services are very price sensitive.

just a $5 increase in price could lead to a 15% drop in total broadband subscribership and a 60% decline in demand for lower-income, price sensitive consumers.

The study can be found here.
Price increases are likely to occur as a result of network neutrality regulation, according to Pociask. It which would preclude network providers from experimenting with different pricing or service models, forcing consumers to bear the entire cost of network upgrades.

Hance Haney

Director and Senior Fellow of the Technology & Democracy Project
Hance Haney served as Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute, in Washington, D.C. Haney spent ten years as an aide to former Senator Bob Packwood (OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee during the deliberations leading to the Telecommunications Act of 1996. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a B.A. in history from Willamette University and a J.D. from Lewis and Clark Law School in Portland, Oregon.