Economic standpoint why WiFi providers are cheap

In the United States, having an internet connection is becoming a necessity for modern families. Just a few decades ago, no one would have thought that this would, in fact, be the case and that having an internet connection would be as important for families as having a local telephone line. Now, WiFi providers are cheap and accessible enough that almost anyone can now afford them. Even low-income families now have access to them thanks to different programs implemented by the government. Similar to other services, such as water and electricity, some cities do provide internet access subsidy for low-income families. This just goes to show how important having an internet connection really is for families today.

In the past, having an internet connection was considered a luxury which was only reserved for the most privileged of families. Having access to the internet was also only available to big institutions, universities, and tech companies. This was of course during the time when a single computer would take up an entire room. The internet was predominantly used to send and receive data such as simple text. It was primarily used for communication between people living in different areas of the world. However, the global system of interconnected computer networks quickly grew into an entirely different form of communication systems that totally transformed the way we live and do business. The early internet was comprised of linked devices from academic, business, and government networks. A few years later, the public was then able to join in, contributing their collective data to the ever-growing Worldwide Web. Soon, everyone around the world was able to access all the data that was available online, including hypertext documents, websites, electronic mail, and other files.

As technology continued to evolve and improve by leaps and bounds, so did the accessibility and affordability of the internet (See how affordable and accessible internet can get at  Internet speeds continued to improve by leaps and bounds as well. In the past, users would have to wait for minutes or hours just to load up a large image or video file. However, with today’s internet speeds, that same file or video could be loaded up or streamed in seconds. An entire website just a few decades ago would have taken a lot of time to load up, but now these types of sites are loaded almost instantly.

For the public, their first experience of the internet was likely through the use of a dial-up modem.  These modems were able to access the internet at speeds of up to 56 kilobits per second, or 56,000 bytes per second. This was considered to be very fast during that time and was adequate to load up simple websites with minimal graphics and only text content. These speeds were also adequate to send text emails without any attachments. Video streaming during this time was basically non-existent. Video files took hours to download and some larger files even took days to transmit and download. During the peak of dial-up technology, WiFi providers were cheap enough for most middle-class households to afford them.

However, having one wasn’t really still a necessity for most households with the exception of those who really needed the connection for work-related activities. With the advent of DSL, or Digital Subscriber Line technology, internet speeds were bumped by a significant amount. Households could now be connected to the internet at speeds of more than 1 megabit per second, which is a significant jump from 56 kilobits per second. Similar to dial-up internet access, DSL utilizes the existing network of telephone lines to connected users to the internet.

This means that WiFi providers didn’t have any problems reaching customers as most of the major cities and town within the country already had vast networks of telephone lines. DSL technology and network cards on computers continually improved, and eventually internet speeds reached peaks of 25 megabits per second in the next few years.

Cable internet was then introduced into the market, and it promised even faster speeds. Instead of using telephone lines to bring users internet access, cable internet providers use existing coaxial cable television lines. These lines were far more advanced than standard telephone lines and were able to handle much more data at faster speeds. Higher tier plans from some providers even allowed its customers to access the internet at speeds of more than 100 megabits per second. At these speeds, watching an entire movie online was becoming a common practice. Graphics-intensive real-time online games also became commonplace as people continued to spend more of their time online.

Aside from recreational activities, businesses and corporations started to digitize all of their data. Industries such as newspapers, print media, and other forms of businesses transitioned their activities online. More and more people stopped using the post office to send their emails, and people started to go online to get their daily news instead of buying a newspaper. Slowly but surely, traditional communications media such as telephony, radio, television, paper mail, and newspapers were transformed and reshaped. Some of these types of mediums were even completely replaced by the internet which transformed them into new mediums like online music, emails, internet telephony, internet television, digital newspaper, and online video streaming services.

Most of these traditional forms of media have adapting to the new technology by essentially transforming themselves into new mediums such as blogs, web feeds, and online news aggregation. Aside from transforming traditional media, the internet itself has also transformed the retail business in very significant ways. Brick and mortar businesses are now constantly facing stiff competition from online shops and online distributors. Because these types of businesses do not have to deal with the expenses involved with actually opening up a physical shop, they are able to sell their products at significantly lower prices. This is mainly the reason why so many physical shops have closed up and transitioned online while others have opened up their online stores to complement their brick and mortar establishments.

The main reason why WiFi providers are cheap and reliable in most areas nowadays is due to the increased supply of the service now being offered by numerous companies. In most cities in the United States, there are normally more than five service providers that are available. Residential internet providers who are offering either DSL or cable connections usually have to fight over a certain area or neighbourhood. These companies also have to contend with the entry of new fiber optic internet providers who are constantly stealing away business from them. Fiber optic internet plans usually costs just a little bit more than cable internet, but the advantages make the price different well worth it for most people. Most customers who are currently on either DSL or cable are easily persuaded to switch to fiber optic internet when it becomes available to them. Due to this fact, WiFi providers cheap out on some of monthly plans by offering insanely huge discounts and promotions just to attract new subscribers. Despite losing money on the initial monthly payments, the company have the advantage of having the customer for a fixed amount of months due to its mandatory lock-in periods. In most cases, these companies also make up some of their money through additional monthly charges such as data cap add-ons and speed upgrades.

Wired internet service providers, either cable or DSL, usually have a fixed monthly data caps that are strictly implemented. If a customer exceeds his or her monthly allocated data, the account’s speed is immediately throttled down to as slow as 1 or 3 megabits per second. This basically makes the connection useless in most cases. Some providers then offer their customers additional data, which they would have to pay extra to get. For some contracts, customers are called up by representatives who then try to persuade them to upgrade their accounts to get additional speeds. Basically, by offering a low monthly payment, wired internet service providers can attract new accounts, which they can then try to convert into additional money through upgrades and upsell techniques. For fiber optic providers, the competition is also relatively very fierce. Most cable internet providers are already upgrading their systems to hybrid fiber-coaxial systems, which will rival the speeds of some fiber optic companies.

These types of systems can offer near-gigabit levels of speeds at relatively affordable monthly rates. Furthermore, cable companies can attract customers with fully packed plans that contain additional services such as basic cable television and residential telephone line connections. These packages are also usually very customizable and customers can choose which of the features they can upgrade or downgrade depending on their personal preferences. These companies also offer their customers with free limited subscriptions to different services such as Spotify, Netflix, and other media streaming services. With almost every aspect of our lives now becoming dependent on having an internet access, being connected has become a life necessity. With so many providers, prices are constantly dropping, which is of course a big advantage to everyone.

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11 Nov 2018

By XYZies