The carnage among the startups is blamed on shrinking capital markets and intense competition from the more established telecommunications companies such as SBC Communications and Qwest. Now with their competition properly vanquished, the big guns are raising prices, said David Burstein, who publishes DSL Prime, an industry newsletter. In his estimation, the price of DSL should be going down because the price of the technology is dropping and companies are streamlining their operations by pushing such practices as self-installation. Brokowski of Pacific Bell said while the DSL market is in a state of consolidation, competition still exists and prices will stay in check accordingly. There is competition in the marketplace.
Consumers do have choices.
But unlike computers or other technology gadgets, Schoolar said, Internet access will mirror the telecommunications industry's practice of raising prices in tandem. When one long-distance carrier ups its rates, Schoolar said, the others quickly follow. Then again, it's not certain that prices can be pushed much higher before consumers balk, said Roland Van der Meer, a partner at ComVentures, a venture capital firm that invests exclusively in the communications industry. For the industry and these consumers, there may be no going back.