Yesterday the Wall Street Journal insisted there was now an erupting broadband "price war," simply because AT&T and Verizon were offering some relatively minor promotions to battle last quarter's dismal quarterly additions. The Journal's piece led to a flurry of articles that seemed to agree: yes, we're either in the midst of, or on the cusp of, a very exciting broadband industry price war -- which would be really very interesting, were it actually true.

For some reason the press feels compelled to insist we're in the midst of a broadband price war, even at times when customers are actually paying more. In reality, incumbent ISPs do everything in their power to avoid competing directly on price, instead using promotions with oodles of fine print and restrictions whose primary purpose is to create the illusion of value.

AT&T's new price lock guarantee, the Journal's primary piece of evidence to suggest a bloody broadband Gettysburg, is hardly a particularly exciting promotion (or a new idea). Its primary draw is the elimination of an early termination fee and long term contract, both of which are relatively new phenomenon in this sector anyway. In reality, AT&T has raised the price of their DSL services twice this year for most customers.

Verizon's new offer (and the Journal's exhibit B), six months of free DSL, is a slightly more interesting proposal, though alone is hardly enough to constitute a "price war." The service requires that you bundle (not so free) landline phone service. As we've noted, Verizon's FiOS service continues to see price hikes whether we're talking stand alone products or bundles.

In other words, the Journal's entire evidence for a broadband price war comes from one phone company offering a limited time promotion on their slowest tiers. In reality, the United States is twenty first in average amount paid per broadband subscription (OECD data), while limited competition in many markets continues to allow carriers to keep prices high. Just a tip: you'll know there's an actual broadband "price war" when the cable industry participates.