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.
then continue:
Usage-based billing is seen by some as a fairer alternative to broadband
caps, a term most closely associated with Comcast, which had been
enforcing a limit of 250 gigabytes per Internet customer per month.
Although only a small minority of customers ever exceeded the cap, it
became a lightning rod for competitors like Netflix, which accused
Comcast of unfairly favoring its own services.
Now a bit of bona fides. I was COO of NYNEX Mobile, now Verizon, and SVP at Warner Cable, then Warner AMEX. I thus have some modicum of knowledge. Also as the CEO and founder of central and eastern Europe's first full fiber network I understand Internet backbone. Unlike many of the younger generation I went thru these wars before.
My observations:
1. Billing is a total nightmare. Really. It costs more than anything you hope to recover. Really. Been there done that! Why? Because customers complain and seek remedies for calls not made, bytes not used. You have to be a complete moron, I will tell you how I really feel later, to think you will win this one. Average work here. Yes, some people use nothing, lots frankly, you win, a few are hogs, you lose. So figure out what works and you will never get a complaint, or a law suit!
2. What is the cost? Zero now, almost. It does not cost much anymore, even if you are not a Tier 1 Internet backbone carrier, which all of these guys are any how. Are you just greedy?
3. The real and only reason is to establish a barrier to entry to competitors. Yes, the cable guys want to control content, that is where the money is. This is their way to do that. It is a pre-emptive strike. Perhaps there are still anti-trust laws, like bundling and the like.
The Times missed the point. The FCC is clueless on this as is Justice. It must become a total mess before anyone acts. Just watch.
But wait, the bandwidth on wireless is exploding....
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