Posted on 01/17/2008 3:58:27 PM PST by ShadowDancer
Time Warner Cable Tests Data-Usage Rate Structure
Thursday, January 17, 2008
NEW YORK — Time Warner Cable will experiment with a new pricing structure for high-speed Internet access later this year, charging customers based on how much data they download, a company spokesman said Wednesday.
The company, the second-largest cable provider in the United States, will start a trial in Beaumont, Texas, in which it will sell new Internet customers tiered levels of service based on how much data they download per month, rather than the usual fixed-price packages with unlimited downloads.
Company spokesman Alex Dudley said the trial was aimed at improving the network performance by making it more costly for heavy users of large downloads.
Dudley said that a small group of super-heavy users of downloads, around 5 percent of the customer base, can account for up to 50 percent of network capacity.
(Excerpt) Read more at foxnews.com ...
That depends on how the price structure works. If they cut the base price, and don't start metering below a certain threshold, then it does hep the little guy; and if they don't artificially cap the throughput rates, the big users pay more but get better service. And maybe, if time isn't critical, they think about Fed-Exing DVDs of family videos instead of posting them somewhere or sending them as e-mail attachments.
Various pricing tiers, with different numbers amounts of unmetered transfers and varying prices per unit thereafter. Incentives to queue up big transfers during non-peak hours. Kind of like cell phone pricing, which seems to work pretty well to balance the needs of light and heavy users and keep the network from getting jammed, but metering MBs instead of minutes.
Basically, when you choose a call phone plan, you're choosing how much to buy up front a a lower per-unit cost, and how much you're willing to pay, and comparing options on price and performance. No reason ISPs couldn't run on the same model.
True, the per-kilowatt cost tends to rise with usage, not shrink, but at least they don't go out of their way to punish you (unlike the Cell Phone company did, when my teen age son discovered text messaging, for example.)
Every cell phone company I know of offers tiered options for text messages -- no up-front money and a lot per message, a little more up-front money for a certain number of messages and a little less after that, or a little more money for unlimited (i.e. unmetered) messages.
If you got stung with unexpected charges, it was because you didn't know your needs up front (you didn't know your son was gonna get into text messaging and didn't pick a plan accordingly or tell your son to lay of SMS); or the cell phone company did not give you the option to simply not have SMS on your phones.
I'm not slinging blame. I have a good friend who lives in Thailand (THAILAND? Yes, Thailand). We communicate mostly by IM and e-mail, but one month we spent a lot of time on the phone. I got socked with $300 in long distance charges. The phone company noted the company and alerted me; I had not signed on for a long distance plan, so I got hit with the max. The phone company offered me the option to pick a plan retroactively, because they wanted to keep me as a customer.
Most forms of communication worked on a tiered model. If you send bulk mail, you spend less per letter.
If you subscribe to a magazine or newspaper, you spend less per copy, but at the risk of paying for a paper or magazine you won't get around to reading; if you buy at the newsstand,, you pay more per, but only when you know you're going to read it.
If you join the Book-of-the-Month Club, you pay less per book, but if you don't keep on top of things, you get books you don't want and won't read.
If you subscribe to premium cable channels, you pay less per movie than if you went to Netflix, iTunes or Blockbuster, but you're paying for more movies than you could possibly watch.
If you use long distance or cellular service, you weigh the amount you're going to use, and weigh the risk of paying for service you won't use vs. paying more the service that you do.
I think a tiered approach would address your concerns about keeping big-time customers happy while saving occasional users money. It's not a novelty.
Some behaviours are blame worthy, however.
The American cell phone, cable, movie, and recording industries have been worthy of some blame of late, in my view.
Your analysis is nice and analytical. Too nice.
Which part of that was supposed to make sense?
Take more, pay more. Take less, pay less. Last I heard, that was capitalism.
There is still a correlation between what you pay and what you get, but the correlation weakens. There comes to be a stronger correlation between the pay of the major investors and executives of such industries, and their prowess in the halls of Congress.
I talked to a cousin who lives in Beaumont, he said RR is pretty much the only game in town, that in large parts of the area, RR is the only broadband option. He thinks that was probably why Beaumont was chosen, since in other markets, people would flee for another carrier as soon as they got wind of it.
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