eli5 Why do internet providers and telecommunication companies have similar or identical prices for their packages? Wouldn’t slightly lowering the cost give the illusion of ‘same speed lower prices’ and improve their business?

Question

I understand that at some point operational costs come into play but wouldn’t they automatically quote a price much more or decently greater than it?

In: Other

Answer 1

Some would call it price-fixing (That is, companies getting together and agreeing to charge the same price so nobody loses out – everyone gets a bigger slice of the pie).

ISPs would deny it and say that with something like internet access, costs are mostly fixed – they all use the same infrastructure (Within most areas – ductwork, cables etc), there’s a limited amount of civils companies that can dig trenches etc, so they supply their services at a roughly similar cost to each company, and the back-end equipment is much the same (Cisco, Juniper etc, etc).