Internet Bandwidth Prices - Free Fall - About Time

Om Malik just posted a piece on the prices of wholesale Internet bandwidth specifically Om writes.. the wholesale Internet bandwidth that is sold to Internet services providers (ISPs) and content companies like Yahoo and Google. This is called IP Transit and it is sold at a rate of “per megabit per second per month” and often requires a monthly bandwidth commitment. Cogent Communications, Level 3 Communications, Tata Communications, Global Crossing and AT&T are some of the more well-known IP Transit providers.

GigE port prices in major U.S. cities fell 30-40 percent between Q2 2007 and Q2 2008. Median monthly IP transit prices for 1,000 Mbps Gigabit Ethernet (GigE) ports in major U.S. and European cities ranged from $10-$14 per Mbps in Q2 2008.

The Entrepreneurial Economic Incentive

Bandwidth is a leading indicator of innovation.  As the price of bandwidth falls new innovations will emerge.  We’ve seen this in the past few business cycles.  The question is what will it enable now?  Will the ‘caps’ stunt innovation or will ‘caps’ provide an opportunity?