[orblivion]

I thought about this as well. I guess I'd say you're basically right if this ISP is really a monopoly, and everybody has an Internet connection. But I don't know if that's quite right. "The market will bear" whatever price they're selling at now because the consumer would opt to not buy it at a higher price. I imagine the ISP's optimal situation is a price that leads to fewer than 100% of people paying for the connection, even as a monopoly. "People are willing to buy at X price" isn't really meaningful. The question is always how many people.

I certainly don't think they will pass all of the cost onto the customers; that's never how it works. But, since the costs per connection are still the same, and the revenue per connection is now lower, they probably won't be at their optimum anymore. They'll probably find a new optimum by raising their prices, making a bit more revenue per customer and losing some customers. Basic supply/demand curve stuff. Again, those curves are not quite the same in a monopoly market, but iirc it still applies to an extent. If the monopoly really had total control, they would take the customers for everything they have, and it's not quite that bad.

:shrug: maybe the actual effect will be marginal. I'm not an economist either.