For my last Rose event of the year, I listened to Jeff Prince, Professor of Business Economics and Public Policy at Indiana University, talk about his research on cutting the cord. An increasing number of people are cutting cable out of their monthly bill, and using internet to satisfy their entertainment needs. A major criteria for choosing internet providers and packages is internet speed with relation to price. This is where Professor Prince’s latest research is focused. It is very difficult for internet providers to quantify the value of varying degrees of internet speed to the average consumer. Professor Prince is attempting to do so by presenting different packages to consumers and asking them which package they would prefer, and then using that information to determine an accurate value on internet speed. In addition, Professor Prince explained the different components of internet speed, which consists of bandwidth and latency. Basically, bandwidth consists of how much information can be transported at the same time, while latency concerns how fast the information gets from one place to another. For example, the number of lanes on a highway would be the bandwidth, while the speed at which a car is moving on said highway is the latency. With these components of internet speed in mind, high bandwidth or high latency may be more valuable to a particular consumer based on their specific internet habits. Personally, I was aware of bandwidth, but was not familiar with the concept of latency before this talk. In addition, now that I understand what makes up internet speed, and the ideas of the pricing behind it, I feel more comfortable choosing a plan that best suits me in the future.
Rose Scholars Spring 2017
Endless possibilities
I interned at a local startup fiber internet provider and one of the problems that we faced was that the average consumer doesn’t know what their internet plan entails. Our internet plan was objectively better than the competition (faster, more reliable, and cheaper) but not everyone was clamoring for service at once because lots of customers simply didn’t know how to compare plans. They purchased a plan one day and never gave it another thought, so they didn’t know how fast it was supposed to be or anything like that. Hopefully in the future people will understand more about internet to be able to compare plans better and hold their ISPs to a higher standard.
It’s important to do your research when choosing an ISP and their internet plan (if you have a choice). It used to be a bigger issue in the past, but some ISPs have engaged in “Bandwidth throttling”, which is a reduction in the upload/download speed. Sometimes they do it when you reach a cap or some high number, but it’s certainly quite a headache to deal with!
It sounds like this was a really relevant and interesting Rose Cafe, and it’s too bad I didn’t get the chance to go. I find staying educated about the details of packages that ISP’s offer to be extremely important, and it’s nice to hear that you left the talk with more awareness. I would be curious to know what Prince thinks of the monopolization of the ISP industry, and the fact that many service providers charge the same amount of money for slower connections in certain areas of the United States.
Another issue that Professor Prince hinted at was the potential of limits to high-speed internet in holding back a community. In some areas, single companies monopolize the market due to high start-up cost, but I question their incentive to provide premium speeds with the lack of competition. For college-dominated areas like Ithaca I doubt this will ever be a concern.