I actually blogged about that specific argument a little while ago here: http://felixcrux.com/posts/mind-gap/

I am curious about some of the statements you made, because I am not aware of the data supporting them, and yet they could change my analysis completely. Specifically, why do you say that "the cost to lay cable in the US is higher by several orders of magnitude?" Is there a valid reason for why US prices are so much higher, and are they really?

In terms of areas with higher population density having different prices -- I'm not sure that it's entirely true that they can't do that, since here in Canada it's fairly standard practice to vary prices for Internet service by postal code.