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We’ve been waiting for this to come to pass, and it looks like the days of tiered broadband pricing are finally upon us:
Here in South Texas, Time Warner Cable customers have been given the online equivalent of a scale in the bathroom, a “usage tracker” that adds up all the household’s Facebooking and YouTubing. Customers who sign up for a light plan of 5 gigabytes of broadband — that’s the equivalent of two high-definition movie downloads — are rewarded with a $5 discount each month if they don’t go over. If they do, they pay $1 for every additional gigabyte.
“We’re moving away from one-size-fits-all,” said Jon Gary Herrera, a Texas spokesman for the cable company, which now tends to call itself a broadband company instead.
Throughout the broadband era, the question has been whether the model should look like television, where you negotiate a flat rate and consumption doesn’t matter, or phone service, with its pay-as-you-go model. It looks like something closer to cell phone service, where you pay for a certain amount of coverage, and then must pay more if you go over it, will end up as the ultimate model.
A couple things on this. First, broadband service is quite terrible in the United States, especially when compared to other countries. Second, nobody particularly likes the pricing plans for wireless. And most important, this represents a direct transfer to the pockets of telecoms who control the “series of tubes” that make up the Internet, from the pockets of the content providers whose data takes up a lot of broadband space. Once you lock in usage-based billing, it’s a hop, skip and a jump to favoring native content from a Comcast over Netflix, for example. Or you don’t even have to get to that; customers who fear going over on their broadband bill will stream less Netflix and watch… well, more of their DVR offerings on Comcast Cable. New companies that offer streaming options will necessarily struggle to find critical mass in a world where customers can no longer afford unlimited servings of their products.
If broadband providers actually delivered a good product, which generated fast speeds on online media that did not buffer or struggle to play, that would be one thing. But this is a monopolized product with relatively poor service that is suddenly moving to another pricing model. And given that this product is already unaffordable for a large segment of the population, usage-based billing expands the digital divide as it favors specific content over others.
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“Throughout the broadband era, the question has been whether the model should look like television, where you negotiate a flat rate and consumption doesn’t matter, or phone service, with its pay-as-you-go model.”
I hope you realize that television and phone service are fundamentally two different systems. One is broadcast, the other is peer to peer. It doesn’t cost anything extra other than a receiver in a broadcast system. In peer to peer, you need a receiver/transmitter and more importantly, additional infrastructure underneath to allow users to interactively use the system.
Rogers Cable here in Canada has a tiered system for both speed and volume. There are at least 6 rates from 1.2Mb speed and 20 GB download to hundreds of GB download and 32 Mb speed. Starting at $25/mo. (all approx.).
Check http://www.rogers.com for precise details.
Because of online content and streaming the cable companies are losing a lot of business because of there lousy, expensive cable service. So this is the only way to 1. make up for the loss; and 2. screw people over with lousy, expensive internet service. The only way to stop them from doing this is via government regulation. I wouldn’t hold my breath.
I recently retired from the huge telco. Once the fibers are in the ground and the Optical equipment is fired up, Broadband becomes a license to print money. Modern Optical multiplexers and switchers are totally redundant and require very little upkeep. Once the initial capital expenses are recouped, it’s “KATIE BAR THE DOOR” For profits. The broadband industry, in my opinion, has undue influence at the state and local level. Their greed is keepin the United States in the digital stone age.
The Corp. elite has to get control of this medium sooner or later, it’s the one big gaping hole in their increasingly totalitarian worldview.
For mobile phones, one problem s that the bulk of the cost of the devices (hello, $650 Iphone!) is covered under the connectivity plan in the US. The providers are appearing to *give* away their phones cheap or free, but are really recouping their costs (plus more) by overcharging people for what the actual connectivity costs.
So one way to bring down costs would be to completely separate these transactions. Make the telecomms sell only connectivity, and make it connectivity to any device. Make the user’s purchase of the device to connect with a completely separate transaction.
-stewartm
Th “information highway” seems to me an apt analogy. As such broadband infrastructure should be publicly owned- at least to some reasonable level. It would be far less costly to operate without the redundant administrative costs of billing, advertising, profit taking etc.
This strikes me as so obvious I’ve been surprised I seem to be about the only one thinking this way.
Sorry Kurt, the ‘free market’ monopolists want an information toll road.
I recall telling people as far back as 1997 that the telecoms and cable ISPs would use the next recession/depression to justify installing a meter on the side of their vinyl-sided concentration camps right next to the existing electric, water, and gas meters. Of course, I was one batshit insane off-the-chart moonbat for even suggesting that the roaring economy was gonna tank let alone suggesting that the lovely, shiny, and altruistic Silicon Valley born-and-bred bean-counters at their ISP would eventually try to have it both ways — i.e. the freedom to repackage, market, and shill their once “unlimited access” services as a utility but without the responsibility of having to eat and own that big bad “subject to governmental regulation” shit sandwich.
Here we are — 15 years later — and those who’ve yet to see metered billing from their ISPs yet thank their lucky stars every single day they come home and not see a new meter bolted to their house where the wasn’t one before … and those who do have such a meter often times find themselves looking at 16 pound sledgehammers at Lowes’ in a different light, especially when they see themselves swaggering across the yard looking for the cable company’s tap, and smashing the two foot tall green fibreglass obelisk into a billion bits per second.
My mom’s cable internet provider does not mention download speed once anywhere on their site. All they talk about is quantity of data: usage.
They have already switched entirely to usage-based fees and you can not find out how fast their system is supposed to be, so you can’t hold them accountable for slower-than-dialup speeds.
Her cable company is owned by a Republican family that sucks all the money out of the company and doesn’t spend one dime on system improvements.