Broadband Providers Pretending Metered Billing Is About Helping The Poor

from the yeah,-right dept

Broadband Reports has a trio of posts pointing out the latest in ridiculousness coming out of the cable broadband industry. It kicks off by pointing out that, despite the claims of the industry, moving to metered and capped broadband is certainly not inevitable. Flat rate broadband has been amazingly profitable for these companies, but they're looking to squeeze even more money out of people. Yet, those on Wall Street who take an incredibly short-term view on how broadband companies make their money are pushing hard to get them to start offering metered billing and broadband caps. And, to top it all off, the cable industry's top lobbyist is trotting out the old ridiculous line that metered billing is really about helping out the poor by offering them more reasonable broadband deals.

Except almost none of that is true. While various attempts at putting in place metered broadband usually will include some "low end" offering so that the companies can make these kinds of claims, if you look more closely at those offerings, they are almost universally terrible. They're not designed to "spur adoption by price-sensitive consumers at the lower end of the socioeconomic ladder," as the industry claims, but to aggressively upsell people to higher rate plans by making the low end plans as crappy and unusable as possible.

Filed Under: billing, broadband, business models, metered

Mobile Operators Go Unlimited... Just As ISPs Insist They Need To Charge Per Byte?

from the please-explain... dept

There was a ton of press coverage yesterday over the fact that one-by-one, Verizon Wireless, AT&T and T-Mobile all announced $99 "unlimited" calling plans, ahead of Sprint who had actually been rumored to be gearing up to launch just such a plan. There were a few different storylines that could make this interesting. For example, it's not clear why it's such a huge deal when regional operator MetroPCS has been offering unlimited calling for ages (at a cheaper price). Hell, AT&T Wireless (when it was run by current Sprint CEO Dan Hesse) launched a $99 unlimited calling plan almost exactly a decade ago.

However, what really struck me as interesting is seeing all of these companies rush towards "flat-rate, all-you-can-eat" pricing, just as broadband providers are insisting they need to switch from flat-rate, all-you-can eat pricing to metered pricing, which some pundits are insisting is a better system. So why is it that one group of companies is moving in one direction, while the other is going in exactly the opposite direction? There are a few factors, but the biggest is the competition issue. Mobile operators are doing so because they feel forced to by competitive pressures (which is evidence in those three companies all announcing plans on the same day, in part out of worries that the fourth would beat them to it). As has been pointed out over and over again, the same simply does not exist in the broadband world in the US to the extent that it does in the mobile space. Some might also point out that capacity questions are different for both sets of providers. Mobile phone operators likely have fewer capacity issues to deal with as a result of unlimited calling than broadband providers do with unlimited internet access plans. However, mobile operators certainly are no strangers to capacity issues -- and they mostly dealt with it by (gasp!) investing in infrastructure so they could support unlimited plans.

Filed Under: all you can eat, broadband providers, flat rate, metered, mobile operators
Companies: at&t, sprint, t-mobile, verizon wireless