Commentary

ISPs Still Likely To Push For Metered Pricing

Time Warner might have backed away from its unpopular plan to start charging Web users based on bandwidth consumed, but many people believe the delay is only temporary.

The company's own statements make clear it still wants to move towards a metered pricing system. "While we continue to believe that consumption based billing may be the best pricing plan for consumers, we want to do everything we can to inform our customers of our plans and have the benefit of their views as part of our testing process," Time Warner Chairman Glenn Britt said in a statement last week.

The company also said that it's going to arrange to give subscribers measurement tools so they'll be able to see how much bandwidth they're actually using each month.

Such statements continue to rile people who oppose the move towards metered billing -- which could potentially triple the cost of broadband access. Currently, many Time Warner customers pay between $40 and $50 a month for unlimited Web access. Under the new plan, unlimited access would cost $150 a month.

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Time Warner was going to test the effort in four cities -- Austin and San Antonio (Texas), Greensboro, N.C. and Rochester, N.Y. Some residents of those cities are continuing to keep the issue alive, because they suspect Time Warner intends to bring back the plan in the near future.

This Saturday, a rally at Time Warner's Rochester offices drew around 30 people, according to Stopthecap.com. And that protest occurred after Time Warner backed off the proposal.

Consumers and digital rights groups have accused Time Warner of price gouging and also of taking advantage of a lack of competition from Verizon FiOS -- which doesn't have a presence in any of the four cities where Time Warner was going to test the pricing, or in Beaumont, Texas, where it is already deploying metered pricing on a trial basis.

Time Warner isn't the only Internet service provider to test pay-per-download pricing. AT&T also is doing so, in Reno, Nev. and Beaumont, Texas. AT&T's caps start at 20 GB -- which is slightly higher than the 5GB low end that Time Warner was offering in Beaumont, but a far cry from unlimited bandwidth, which allows people to stream music, download movies and the like. Downloading one high-def movie consumes around 5GB.

Unlike Time Warner, AT&T didn't even inform subscribers of the tiered pricing in advance, according to GigaOm.

Internet service providers argue that they are facing rising bandwidth demand and that metered pricing is fairer to consumers than the current unlimited use pricing. Perhaps more people would agree if the proposed fees were lower. But so far people have a hard time swallowing $150 a month for unlimited bandwidth -- especially when, according to The New York Times, the costs of upgrading equipment is "shrinking steadily." The paper also reports that Comcast told investors it costs less than $7 a home to double the Internet capacity of a neighborhood.

1 comment about "ISPs Still Likely To Push For Metered Pricing".
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  1. Dean Collins from Cognation Inc, April 20, 2009 at 8:04 p.m.

    This all sounds fine and reasonable.

    As soon as cable companies offer to give up their exclusive cable franchise rights then they can implement 'metered broadband'.

    Until then..... the cable companies, their paid lobbiest shrills, and anyone trying to throw FUD into the mix can go back to their desks in hell and work out a new business model.

    Cable companies have gotten fat and lazy on these exclusives.

    If they want to throw competition into the mix...then they are welcome to. Until then - hands off.
    (doesn't look so attractive now does it Time Warner)

    Cheers,
    Dean Collins
    www.Cognation.net

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