What is right price for high-end broadband?

[Commentary] What are we to make of Verizon's new 150 Mb/s broadband tier? Certainly any Internet user would love to gain access to that raw bandwidth. But how many households will be willing to spend the $200 per month or so it will cost to buy the service? That, of course, is the billion-dollar question.

And Verizon is aware the answer to it will in large part determine the future of its FiOS service offerings. In an interview with John Schommer, who is responsible for building the broadband product mix for Verizon, it became clear the company is at a crossroads in its pricing strategies. For now, it is offering the 150 Mb/s service largely as a stand-alone service (or combined with voice); it won't be available as part of any triple- and quad-play bundles. That's likely to help the carrier figure out the true demand for the service in and of itself (not to mention help it control the roll-out and costs of delivering the new service, which requires updated GPON electronics). Verizon is also proceeding cautiously to understand the potential substitution impact of this new service. Will 150 Mb/s broadband service -- enabling easy downloading of over-the-top HD content -- eat into FiOS TV revenue streams? The answer is likely yes, but it's important for the operator to understand exactly how that substitution will work among early adopters before it puts at risk the bulk of its video programming revenue.