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Web Usage-Based Billing On Its Way

Posted by Soulskill on from the enjoy-feeding-that-meter dept.

tripleevenfall writes with this excerpt from SFGate: "The days of watching movies on the cheap via the Web may soon be over. Time Warner Cable and U.S. pay-TV companies are on the verge of instituting new fees on Web-access customers who use the most data. ... U.S. providers have weighed usage-based plans for years as a way to squeeze more profit from Web access, and to counter slowing growth and rising program costs in the TV business. While customer complaints hampered earlier attempts, pay-TV companies are testing usage caps and price structures that point to the advent of permanent fees. ... Cable's best option is to find ways to profit from the online shift, said [analyst Craig Moffett]. If the companies were to lose all of their video customers, the revenue decline would be more than offset by lower programming fees and set-top box spending. 'In the end, it will be the best thing that ever happened to the cable industry,' Moffett said."

14 of 397 comments (clear)

  1. Municipal broadband is on its way, then by mykos · · Score: 5, Insightful

    We can make your entire industry irrelevant with a single referendum. Tread lightly, telecoms.

    1. Re:Municipal broadband is on its way, then by SuricouRaven · · Score: 5, Insightful

      If you can beat the army of lobbyists, and then the army of lawyers behind them, and then the army of pressure groups who will demand that the network be censored because the government should not spend tax money to distribute smut.

    2. Re:Municipal broadband is on its way, then by ackthpt · · Score: 5, Insightful

      If you can beat the army of lobbyists, and then the army of lawyers behind them, and then the army of pressure groups who will demand that the network be censored because the government should not spend tax money to distribute smut.

      People will just put up with it. I mean, who really complained about the absurdly expensive data plans and two year contracts to have smart phones? Anyone raise a stink over cable/satellite fees? How's that A La Cart bill coming along?

      --

      A feeling of having made the same mistake before: Deja Foobar
    3. Re:Municipal broadband is on its way, then by stanlyb · · Score: 5, Insightful

      Me, They lost ME. I already stopped watching TV, and now do you think that i would go back the stupid TV shows? Noooo, just forget it. At the end they will loose both revenues, from the web and from the TiVo boxes. Which is actually good, they will go broke, and then we will have new players.

    4. Re:Municipal broadband is on its way, then by tom17 · · Score: 5, Insightful

      The thing is, that stanleyb is not alone. In my team at work, 1 person never had cable, the other just cancelled his. I am thinking of cancelling mine when this contract runs out, that leaves only 1 person in that small group. I was in the train station and randomly heard employees there talking about cancelling. I have other friends and acquaintances that talk about cancelling.

      The stanleyb's may not make a difference on their own, but the group of them is growing, faster and faster.

      It will hurt the telcos soon.

      (I'm in Canada so my telcos are my TV too)

    5. Re:Municipal broadband is on its way, then by gweilo8888 · · Score: 5, Insightful

      Likewise, you're not alone. Other than one Formula One race weekend every couple of weeks for half the year, I no longer watch TV at all, and I stay on promotional rates for the lowest tier that will give me the Speed channel to watch F1. If a la carte existed, I'd probably choose a couple of dozen channels I cared about, but I'm not going to buy all the junk I don't want in a bunch of different tiers to get them. If the cable industry wasn't so greedy, they'd get more of my money than they do now.

      I don't own a smartphone, because I refuse to be ripped off on the insane data rates charged in this country, nor do I have a contract because I am disgusted by the fact I'm forced to buy from a list of phones selected by (and with the software feature set crippled by) the provider, rather than choosing my own at retail or from the manufacturer. Instead I stick with a pay-as-you-go dumbphone. If the telecoms industry wasn't so greedy, they'd get more of my money than they do now.

      I likewise have stopped consuming music altogether, with the exception of advertiser-supported, free radio and advertiser-supported, free Spotify. I don't torrent music, but I also no longer buy it either on CD or as downloads, because I object to the removal of my fair-use rights, and the unnecessary DRM schemes on both CDs and downloadable music that put artificial limitations on what devices I can use them with. It's been a decade or more since I last paid a cent to anybody other than private artists selling their own music. If the music industry wasn't so greedy, they'd get more of my money than they do now.

      ...and most recently, I'm dialing back my movie consumption, due to the huge rate hikes the movie industry has forced on Netflix. My Netflix bill is the lowest it's been in years, because I dropped Watch Instantly altogether once I was forced to pay essentially double my bill just a year earlier. Yet another industry is starting to get so greedy that it actually ends up losing money from me.

      But I digress. My point is, you're not alone, and some consumers do respond by spending less when big business gets greedy. The question is, will that ever be a significant-enough section of the populace to cause a rethink.

    6. Re:Municipal broadband is on its way, then by akeeneye · · Score: 5, Insightful

      I have not had a TV in something like eight years now, and by coincidence just canceled my Comcast broadband account to move to the local DSL provider. In theory (and I DO mean theory) I'll be getting 2x the bandwidth at 1/2 the cost. I've only ever had one cable data provider, and that is Comcast, and while the service was always OK, they've long left something of a bad taste in my mouth. Two reasons, first, all the times I've called to cancel only to have them fill my ear with abject FUD about the allegedly poor quality of service with DSL and the alleged poor support I'lll get from the provider - claims that the average consumer would not understand are FUD. Second, their willingness in the end to cut my rate by 40-50% in order to retain me as a customer, which shows the obscene profit they're making off me in the first place. From TFA - "Cable's broadband gross margins are about 95 percent". I realize that Comcast is not one of the companies mentioned that are considering the new pricing structure, but you've got to figure it's coming.

      --
      The man who dies rich dies disgraced. -- Andrew Carnegie
  2. Needs to stop by Anrego · · Score: 5, Insightful

    This has been on the horizon for some time here in Canada. We came damn close recently (but massive public outrage managed to stop it), but they are talking about it yet again.

    I wish we could just skip through this long painful phase where the established dinosaurs hold back natural progress for as long as possible. We all know this is the future.. and it annoys me that I may not actually see in my lifetime things we could be doing from a technological standpoint right now because some huge established companies refuse to adapt or get out of the way and have the piles of money and armies of lawyers/lobbyists to keep it up for decades.

    Honestly, while I don’t have much faith in governments doing things properly nor illusions that it wouldn’t be influenced.. I think at this point I’d love to see Internet access become a government run utility.

    1. Re:Needs to stop by Nerdfest · · Score: 5, Insightful

      If they go to usage based billing and I need to make a financial choice between internet and cable, the decision for me is an easy one. I would guess that it's just as easy for a very large percentage of people. They would be wise to keep that in mind.

  3. Maybe... by SJHillman · · Score: 5, Insightful

    I could get behind this if it's done reasonably. Figure out what the top 10% of users use, draw a line there and say it's an extra $5 each month you surpass it. Likewise, figure out what the bottom 20% use, draw a line there and knock off $10 for each month they don't surpass it.

    Of course, asking these guys to be reasonable is like asking Apple fanboys to use Windows...

    1. Re:Maybe... by tbannist · · Score: 5, Insightful

      I think it should be accepted as a fundamental issue that you should either be charged for speed or usage but not both. It's double-dipping to force people to pay for speed and then charge them for volume as well. Without volume, speed is meaningless. Without speed, volume is meaningless.

      Paying for one should automatically include the other and as Hatta wrote, it's actually better if we pay for speed rather than volume.

      --
      Fanatically anti-fanatical
  4. Lets look at it for what it is by Anonymous Coward · · Score: 5, Insightful

    We are trying to kill off Netflix because they had the foresight to get rights to stream our tv shows before we thought it was a good idea. Now we are losing millions of people to hulu and netflix and others so we are gonna charge you for using thier service and make you use our service since you won't choose us.

    Sincerely,
    The Cable Dinosaurs

  5. Re:Asking people to pay for what they use?!? OMG! by chill · · Score: 5, Insightful

    And before someone says, "I'm paying for X megabits/second, I should get that!", please understand that your feed connects you to the next upstream concentration point (switch, router, whatever). Beyond that, it's all shared bandwidth, and oversubscribed. That's one of the chief benefits of a packet-switched network -- you don't need to dedicate a circuit to each subscriber. Asking for dedicated connectivity the whole way[1] is asking for a return to the days of leased lines, where you paid thousands of dollars a month for 1.54 Mbit/sec.

    Then stop telling me that is what you're providing. If somewhere upstream can't handle the rate and limits it, that is one thing. But I don't give a rat's ass about your oversubscription issues. If Comcast tells me "20 Mbps", then under no circumstances but the rarest should COMCAST ever throttle me. The upstream provider can rate limit as they need to.

    Honestly, I don't mind paying for what I use. What I mind is getting LIED TO about it under the guise of "advertising".

    --
    Learning HOW to think is more important than learning WHAT to think.
  6. Re:Asking people to pay for what they use?!? OMG! by JustinOpinion · · Score: 5, Insightful
    It's not so much a moral panic, but usage-based billing is seen as bad because:

    1. It's not inline with the operating costs. For gas or electricity, the more you use the more of the resource is used up. Hence, it just makes sense to pay for usage. With bandwidth, it's not exactly the same. There is a large base cost to having a given infrastructure; the additional cost to actually use the infrastructure is comparatively small (routers and switches transferring packets do consume a bit more electricity than routers and switches idling... but this is small compared to the base cost of installing and maintaining the routers and switches at all). In general, people find it unfair for consumer costs to be highly unrelated to actual production costs (it feels arbitrary and like price gouging).

    2. Related to #1, it's just generally inefficient not to use data-transmission infrastructure at near 100% capacity. Once the infrastructure is in place, it's cheap to just use it. Thus, it's overall more efficient (in terms of productivity per amount of resource used) to encourage people to use the Internet to capacity. Usage-based billing has the opposite incentive: it encourages people to ration what is in not a traditional resource. (Unused bandwidth is wasted, not banked for a rainy day.)

    3. In an overall technological/economic trend sense, usage-based billing has the effect of keeping society locked into a fixed data-transmission infrastructure. The incentive to expand and improve the network, add bandwidth and capacity, is eliminated. Thus progress in telecommunications is stalled. Most people would agree that the deployment of telephones and the rapid expansion of the Internet have been overall beneficial to our economy and technological progress. Thus, it seems like continuing to expand our communications infrastructure would be a good thing. Usage-based billing maintains the status quo instead of encouraging expansion of our networks.

    4. As others have pointed out, to the consumer, data bandwidth is more like cable TV or landline telephones: both of which have traditionally been a "pay per month; unlimited usage" model (with many exceptions, of course: long-distance calling, pay-per-view, premium content, ...). So there is at least precedent for similar consumer services being metered on an "access time-period" basis and not a usage basis.

    Why is Internet use seen differently?

    I think the short answer is: "Because it's different." Bandwidth is not a tangible resource like gas or food. Treating it as one is not efficient.