Fiber for Breakfast Week 8: When Fiber Shows Up, Prices Come Down 

Fiber for Breakfast Week 8: When Fiber Shows Up, Prices Come Down 

Competition in broadband is often talked about in theory – more providers should mean lower prices. But this week’s Fiber for Breakfast put real numbers behind what many in the industry have long suspected: not all competition is created equal.  

Ernesto Falcon, Program Manager of the Communications and Broadband Policy Branch at the Public Advocates Office within the California Public Utilities Commission, joined Gary Bolton to walk through new research from the agency and the University of California, Santa Barbara examining pricing behavior across California’s urban broadband markets. By focusing on dense cities – where deployment cost isn’t the primary barrier – the study isolated one central question: what forces incumbents to lower prices? 

The answer was clear. It wasn’t fixed wireless. It wasn’t satellite. It was fiber.  

Using address-level promotional pricing data collected across thousands of locations, researchers found that cable providers rarely changed pricing when facing slower, sub-gigabit competitors. Even when customers churned to alternative services, incumbent pricing structures held steady.  

That changed the moment a second gigabit-capable provider entered the market – most often a fiber overbuilder. 

On average, prices dropped from $15 to $40 per month in markets with true gigabit competition, with even larger reductions when three providers were present. In highly competitive regions like the Bay Area, where multiple high-capacity networks overlap, consumers benefited the most. 

For policymakers, the implications are significant. The study estimated that expanding fiber-driven competition into areas currently served by a single gigabit provider could generate more than $1 billion in consumer savings statewide.  

But the conversation went beyond pricing.  

Falcon emphasized that consumer demand itself is shifting upward faster than many regulatory frameworks recognize. Roughly three-quarters of California subscribers already purchase speeds of 300 Mbps or higher, with half at 500 Mbps or above – a signal that the market’s center of gravity is rapidly moving toward gigabit-class services.  

“If companies are offering gigabit, it’s because customers want it,” he noted, pushing back on arguments that legacy speed benchmarks are sufficient measures of competition.  

The demand trajectory is also shaping policy conversations inside California. Falcon described ongoing efforts to modernize regulations and accelerate the transition from legacy copper networks to fiber infrastructure, including a proposed framework that could enable more than one million additional fiber passings over the next decade. 

Underlying those discussions is a familiar principle: infrastructure investment should create shared benefits – for consumers through lower prices and better service, and for providers through sustainable business models.  

For the fiber industry, the takeaway wasn’t subtle.  

Facilities-based fiber competition doesn’t just improve performance. It changes market behavior. It forces incumbents to respond. And it delivers measurable economic value to consumers – even those who never switch providers.  

In other words, fiber doesn’t just win customers. It resets markets.  

With bandwidth demand accelerating and AI-driven applications pushing networks harder each year, that dynamic is likely to become even more pronounced.  

Click here to watch the full interview. 

Click here to view the slides.