Are You Pigging Out On Broadband? Time To Pay Up. But How Much?
The latest: An AT&T (T) rep tells TheStreet.com that broadband service priced by how much bandwidth you use is "inevitable." This follows Time Warner Cable (TWC), which is testing a consumption-based broadband service in Texas, and Comcast (CMCSA), which is reportedly considering a similar plan. Until now, most U.S. residential broadband subscriptions have been offered as "unlimited," with only the worst offenders getting slapped for using too much bandwidth.
The key: Finding a price structure that makes sense. For example, we think Time Warner Cable's caps -- 5 gigabytes per month on a cheap plan, or 40 gigabytes a month for a more expensive plan -- are laughably small. And their overage charge -- $1 per gigabyte -- is unreasonably high. (If an ISP does pay for bandwidth, it's probably less than a nickel per gigabyte.) Comcast's supposedly planned cap -- 250 gigabytes per month -- makes more sense.
Last we checked, U.S. Internet providers are for-profit corporations, and can't exist without subscribers, so they're not going to set prices at levels that most people won't pay. But they're also often duopolies: Besides your phone and cable company, you probably don't have many options for fast Internet access, even if prices get jacked.
So what's a fair price? Hard to say, because we're so used to paying around $40 a month for all-you-can-eat cable modem service. We could see ourselves spending another $10 or so, because we probably use more bandwidth than our neighbors. But anything more than that would send us looking for a new ISP.
What do you think is a fair price for decently fast broadband? Would you sign up for a consumption-based plan? Let us know in comments.
See Also:
Hulu Household: Why I Got Rid Of Cable
Why Time Warner Cable's Pay-Per-Use Internet Experiment Will Fail
Does Comcast Want To Put Bandwidth Hogs On A Diet? Sounds Good To Us
In other words, this "omg we're running out of internets" talk is largely just to push up prices. There's plenty of dark fiber out there.
I'm comfortable with paying my $40/month.
but the plan needs to go down also. My parents use 1/10th the bandwidth i do. Will they get a rebate? I doubt it. I use my fair share but I'm not a net glutton. I understand their wanting to reign in those who abuse it... but I'm sure your and my parents more then offset their abuse.
I would say not only is ATT getting greedy, it's also getting anti-competitive.
As for bandwidth hogs, you may want to think about phrasing your posts in the future so as to make it seem as if everything that goes wrong is the fault of the consumer. Unless you prefer being a shill for the corporations.
q. 2 Would you sign up for a consumption-based plan? I used to do that for usenet access after many ISPs stopped offering decent usenet (grrr). The thing is that you have to offer something for the money instead of just penalizing people for using your service (arrgh!).
The commercial usenet servers are a good example. The Joe Blow bargain-hunters have defined limits on speed and quantity. The servers limit these people so that the premium service is worth having. Everyone knows what they are supposed to get for their money.
This stuff about people creeping up to their limits if known is a joke! If all subscribers are alloted x then they have a perfect right to claim it. What they have now is a type of theft esp. compared to above.
In a fair market the price of a good should be equal to its marginal cost, right? So, what's the marginal cost of sending one additional bit across a wire? Well, to answer your (sort of) question about whether ISPs pay per gigabyte: they definitely don't. The big ones pay for infrastructure (fixed cost) and nothing more, the smaller ones pay to lease infrastructure from the big ones (also fixed once the lease is signed). So sending one more bit is, for all intents and purposes, free. There's some cost to powering the routers and whatnot, but on the margin that cost is so minuscule that it'd be difficult even to calculate.
I think in reality there are a few things going on here. First, the ISPs are realizing that they can make more money by charging overage fees. Second, there's some political pressure on the ISPs to limit some sorts of activity (P2P file sharing, for example). Third, there may be some degradation on certain network segments due to heavy users... although I haven't really seen or heard of that... and stopping the heavy use is a quick fix that doesn't involve additional capital investment.
All of the talk and posturing we've been seeing from the major telecoms is interesting. I think what's going on is a sort of tacit collusion. None of the major ISPs want to be the first to start charging for overage... but by saying things like "it's inevitable," and leaking stories about new price structures, they're sending signals to the competition. If AT&T says it's "inevitable" then Comcast is probably safe to start charging.
This is about not allowing video on demand companies (NetFlix, Apple TV, Micosoft Live, Cinema Now, Joost) to compete against the cable companies' television, IP phone and pay per view services. It's an anti-competitive move.
This does not mean you have to pay more. You should pay less and the heavy users pay more.
This would also solve the ISP's dilemma in trying to throttle ad hoc networks. The ISP doesn't need to inspect packets only count them and put the running tally in dollars in one corner of your browser.
Then the consumer is in control as he would budget any other resource like power or water or food. And the ISP can now afford to totally ignore what data is on the network.
Immediate legislative and legal action should be taken to wholly prevent any such limitations as this in the U.S. This roundly violates the spirit of the internet, and only harms those who are financially inept.
It Seems That Every Time There's Progress 'N' People Start Having A Bit Of Real Freedom, This Mother F------s See The Open Door To Start Riping People Off/Take Advantage/Abuse...
I'm Getting Sick 'N' Tired Of American Corporations.
If the above describes you you're about to get fuc*ed by the cable companies.
Does any one really believe that Amazon, Google, Sony and Microsoft will just stand around and let this happen. I think it's a pretty safe bet they will lobby the hell out of DC to stop the cable companies from doing this. If consumers are forced to pay by the GB it will pretty much kill Internet Commerce in my opinion.
Who will buy Halo 4 and then have spend $10 a day to play those all night sessions?
Who will spend money to download ADs for stuff nobody wants?
I currently pay Time Warner something in the $50 range for their top tier road runner service because I'm heavy internet user now if they are really so worried about bandwidth and such why offer the different levels of service. That right there proves their whole argument is bullshit.
If Time Warner is actually dumb enough or lucky enough to pull this off not only would I be dropping my Road Runner but my digital phone and cable TV as well. All told I spend over $200 to Time Warner so do they really want to offend me and lose my as a customer for everything?
If Time Warner and Comcast do get away with this it will also do one more thing. It will breed competition as someone somewhere will come up will an all you can eat plan and they would get customers in droves.
So go ahead Time Warner and Comcast pull the trigger and lets see how many customers you are willing to lose.
Brian
If Sprint takes that away I will use PDAnet and if that goes away I will look for some other inexpensive alternative.
I don't think that this will fly! I think that as this takes presedence and becomes the norm that there will be more room and a new opening for a new telecom company whose pitch will be that they provide unlimited bandwith at a lower price than the companies who currently have a strong hold on the industry.
Like someone else in this thread said "they are trying to milk more money from us"!
Quite deplorable that at a time when so many people are struggling just to get by that these people would increase their cost for something that has become a virtual necessity. Horrible people running these telecom and cable companies!
I easily use 40gb of bandwidth in a few days. I have 4 computers that are constantly connected to the internet, I watch Hulu, Listen to Sirus or Napster online, backup my photos to my online storage, Play online games. If I'm limited to 40gb a month I would have to cancel most of my online subscriptions - it wouldn't be cost effective for me to keep them.
If a smaller ISP is leasing lines from Timewarner wouldn't they be subject to the extra charges? So in hinesight we would be stuck paying for overuse no matter where we go.
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The world is no way running out of bandwidth. The data limit is a thing of the past as far I am concerned. Although I do agree people using less data should get facilities like less charges or something.
What happened to the old fashioned high downloaders share bandwidth with high downloaders? And the whole idea is not practical anyway. In a free market economy it would not work in its current form. Even if one ISP would provide unlimited downloads,most people would opt for it.