Why your Internet prices are bound to go up

Many Americans have just one or two choices of Internet provider at home. Critics say this system leads to sky-high, even "ridiculous," prices for Internet. But if you were hoping things will improve, you could be waiting a long time, according to one industry analyst. In fact, conditions are only going to worsen for consumers despite new entrants into the market such as Google Fiber, said Craig Moffett, an analyst at MoffettNathanson, during a House hearing July 22.

"Market forces," said Moffett, "are unlikely to yield a competitive broadband market." In plain English, nothing may be able to stop an inevitable spike in Internet prices. Here's why. Rising pressure on cable and Internet providers to shift away from the TV bundle -- a big source of traditional income -- could force cable companies to raise the price of their other products, namely broadband. "It's a simple matter of removing a leg from the stool," said Moffett in an interview after the hearing. "If you remove a leg from the stool, you have to do something to keep it balanced. And that'll end up raising prices for broadband." As consumers, we're increasingly abandoning our traditional television packages in favor of online streaming apps, which let us customize the channels we get. This offers more flexibility, but it costs Internet providers, many of which use television programming to help shore up their broadband businesses. "The video business and the broadband business are opposite sides of the same coin," Moffett said.