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Comcast May Raise Prices On "Internet Hogs"
lunartik writes: "According to the Philadelphia Inquirer, Comcast may raise rates on users of their @home service who download a significant amount of audio or video files. Comcast claims that 1 percent of users use 30 percent of capacity. With the flat fee possibly flying out the window for users who utilize the service's speed, one wonders if US broadband is heading the same way as the Aussies." Time Warner has said much the same, and the spiral has probably just begun.
I've used cable modem services for at least 3 years including mediaone, at&t, time warner and hopefully pretty soon charter. I've always recommended it to friends and family over DSL because you get a much higher download rate (200-300KB/s) compared to the normal consumer dsl (75-100KB/s).
In general you paid the same for DSL vs Cable but got more with the cable service. Well, that's changing now. Cable companies have noticed that they are basically giving away a T1 worth of bandwidth for $50/month. They see how the phone company can offer high-end business DSL for $250/month and want to cash in... so they are copying the DSL's price scheme.
Charter Communications is my current cable provider. Their plans are something like this:
256Kb Down / 64Kb Up - $30
768Kb Down / 128Kb Up - $40
1Mb Down / 256Kb Up - $60
1.5Mb Down / 384Kb up - $100
These are very similar to verizon/at&t/etc DSL packages. I figure most of the other cable providers will switch to a similar plan soon. They save bandwidth, make more money and the only people to really complain are the 1% who are causing all the bandwidth problems in the first place. That 1% doesn't have any alternative except for DSL, which has the same pricing plans... and we know they won't go back to dial-up.
Equally so, if I only drive 100 miles per month, I should pay a pro-rated insurance fee
Our insurance company asks how far we live from work for exactly that reason. Our rates would be slightly higher if we lived 20 miles from work instead of 2.
As far as the internet usage goes, the same thing. The isp that I use for my email account has a 5 dollar a month e-mail only account, which I've used for years. You get something like 5 hours of dialup service a month with that. Or I could pay 10 for 40 hours and some web space or 20 for unlimited. I believe AOL has a similar 5 hour a month plan as well as a bring-your-own-connnection plan for people with cable modems. Most ISP's have low end, low hour accounts.
Ting!! Your wish has been granted.
Crappy analogy. First make sure you oversell your service, then make sure you advertise the crap out of the the beauty of always on, fast internet with applications in video and faster gameplay. Now keep overselling until the accountants send a very mean memo.
This is when you do a 180 and screw your customers because you never had a viable business plan to begin with. Sorry, but the warez kiddie bought your service because of how you offered it to him. May your customers leave for a company with a working business plan and you can have the T1 all to yourself.
There is one flat rate ISP in Ireland. They charged a fairly expensive flat-rate for users, and signed up alot of users, becoming the largest in the country.
Then they just kicked off the people that were using it the most. They were allowed to get away with it, but the backlash from the disconnected customers (myself included) was high.
Here is the coverage on Wired from the incident:
Wired coverage of Ireland's flat-rate ISP kicking off its frequent users
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Cast a Cold Eye
On Life, on Death
Horseman, pass by
--W.B. Yeats' gravestone
It's obvious that 99% of the people here have no idea how ISPs work.
At any given point during the day, the ISP has a certain number of customers using bandwidth. Not every customer is using bandwidth at the exact same time. The ratio is roughly 20 to 1. That means at any given second, 1 out of 20 customers is using bandwidth (I work for a DSL provider, that number is accurate for us.. but it'll vary per provider).
Bandwidth hogs throw off that ratio. They abuse the system. If the ISP had to treat all of it's customers as "potential bandwidth hogs", they would need to account for a ratio of 1:1, instead of 20:1. They would literally have to raise the cost of your service by 2000 percent.
Capping is the other option, but again, the cable company would have to cut your bandwidth by 95%... because you want to change the ratio from 20:1 to 1:1.
So which is it? Would you like to pay $1000/mo instead of $50/mo? Or would you like to be capped at 15 kbit/s instead of 300?
If you don't like it.. tough shit.. go start your own ISP, and see how much you'd have to charge in order to give your users the ability to max out their pipe 24/7.