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An Iowa ISP's Metered Pricing: What Will the Market Bear?

Posted by timothy on from the prices-as-pressure-gradient dept.

An anonymous reader writes "The East Buchanan Telephone Cooperative started charging cellular prices for home DSL internet service starting on January 1st, 2014. A 5GB plan costs $24.95 a month while a 25 GB plan will run $99.95 per month. 100 GB is the most data you can get in a package for $299.95 per month. Each additional GB is $5. They argue that the price increase is justified because their costs have increased by 900% since 2009. About half of their customers use less than 5 GB a month while their largest users use around 100 GB a month. They argue that the switch to measured internet will appropriately place the cost on their heaviest users. With the landmark Net Neutrality ruling this week will larger providers try to move to similar price models?"

4 of 479 comments (clear)

  1. meters don't work right by Joe_Dragon · · Score: 5, Informative

    http://www.dslreports.com/shownews/Canadians-May-Sue-NorthwestTel-Over-Broken-Usage-Meter-127342

  2. Telephone COOPERATIVE by Anonymous Coward · · Score: 5, Informative

    One thing that's getting missed here is what cooperative means. My parents are part of another tele coop in another part of Iowa. Tele coops are relatively common in very rural areas and are owned by the subscribers and, at least in the case of my parent's coop and this coop, the subscribers receive dividends. (see http://www.eastbuchanan.com/about/dividends.htm )

    If the subscribers don't like it, they should show up to the coop meetings and have their say in the company that they themselves own.

  3. Re:Welcome to Australia by Cimexus · · Score: 5, Informative

    No, this is nothing like Australia. Those rates are obscene. Australia may have metered internet but the prices are far, far lower.

    25 USD for 5 GB? (Australian ISPs would typically give you ~50 GB for $30 AUD, which is roughly equal in value)

    99.95 USD for a paltry 25 GB? WTF? 100 bucks in Australia gets you unlimited plans the ISPs that offer unlimited (e.g. TPG) or very-high-quota plans with others (Internode, one of the more expensive ISPs, gives you 1.2 TERAbytes per month for $109 AUD).

    This is only "Welcome to Australia" if the Australia you're talking about is the Australia of the year 2000.

  4. EBTC had a healthy profit before this change by lokidjm · · Score: 5, Informative

    EBTC's profit margins on internet service were above 40% in 2012. See the document below. They have also built out line of sight wireless internet service, so they will not need to maintain those rural DSL cabinets in the future. https://docs.google.com/file/d/0B1MxEnYSkSD_V2ZjdEdfeFNTMnM They could easily serve all of their existing customers using wireless if they chose too. Prairie iNet is a company that uses similar wireless technology. They can serve 250 customers per tower. EBTC currently has 3 wireless line of sight towers. Prairie iNet offers speeds of up to 20 Mbps with unlimited usage for $70 per month. They offer service in a smaller town 8 miles south of EBTC. http://www.prairieinet.net/residential/pricing-plans/