Tiered Broadband Pricing To Stop File Trading?
from the not-so-smart dept
For years, people have been talking about how we need a "broadband killer app". Something that really uses all the power broadband brings to offer something that simply can't work over dialup. For a while, it seemed that the closest such app was file sharing. People were signing up for broadband so they could use file sharing programs. So, what are the cable broadband providers about to do? They want to kill that off, by introducing tiered pricing. The plan is to limit the amount of bandwidth customers can use. Business Week points out this is likely to put a dent in people using file trading programs. I'd also point out that it puts a dent in the reason people use broadband. It seems like an odd move to try to slowly suffocate one of the main reasons people sign up for your service. Once again, business models that involve pissing off your customers, generally speaking, are a mistake. Furthermore, it also takes away all the incentive for anyone to create a real killer app for broadband. The point of the killer app, in this case, would be to make people use more broadband - but if they're getting charged extra for it, that will never happen.
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Bandwidth isn't infinite
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Re: Bandwidth isn't infinite
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I think that's not quite right
For instance, whenever my DSL goes out, it's not the slower speeds of dial-up that bug me so much it's that I have to dial-in and disconnect.
It's been a pretty basic truth that the two biggest killer-apps have been email and IM. Neither of which has high bandwidth requirements but both benefit from an always on connection.
I don't want to see tiered pricing become a way to control download habits but obviously, no company can provide unlimited bandwidth for $49.95 a month. I would much rather pay $19.95 a month for an always on 128kbs connection than paying $49.95 a month for a 1.5Mbs connection that I'm not using (since I mostly email, do casual web surfing and IM) or worse yet, to subsidize the online porn habits of my neighbor who's downloading 5MB MPEG's 8 hours a day.
I think tiered pricing gives the consumer more choices while placing the burden of cost on those who take the biggest benefit. I don't think they should cut you off completely if you exceed your limit but you should be able to buy additional credits (like pre-paid phone cards) or have your connection speed slowed like one of your other posters suggested.
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Not me
My having to dial up, or manually connect is a very minor inconvenience compared to having to wait on a dog slow modem. And I don't download porn, play games or file share.
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This treand really is an app killer
This already occurs here in Australia. You may check for yourself by looking at Broadband Choice. You will notice a number of offerings characterized by a monthly fee of A$80.00 to A$100.00, a 3Gb per month limit, and an excess charge of A$0.15 per Mb. FYI A$1.00 = US$0.57.
If the proposed scheme is anything like the above then I can confirm that this will be a real app killer. The app killed is the Internet.
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In the end...
Rather than speculating what will happen, let's try an make an educated guess.
Looking at reality, everything is headed towards a subscription base model. Why should broadband be any different. Can we think of any technology that isn't headed there?
The most recent "killer" tech that is in use today would be cellular phone service. Originally bloody expensive, now dirt cheap. I remember paying nearly $1 for every 2 minutes in my early days of cellular use. Now I pay $75 for 1000p and 3000op plus wireless web access out my minute allotment for $5 extra.
As history shows us, companies will try to be greedy, but over time (a long time) they will lose out.
When it comes to broadband, they will realize that very few will sign up for the high-profit margin high- bandwidth package. Instead of 200k customers at $50/mo, they will have 400k customers at $20/mo. You do the math. Competition kicks in, and prices fall.
Then again, I could be wrong.
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