As displeased as internet users are (as in those who actually use the internet) about bandwidth caps, it seems that cable companies on the whole want consumption-based billing policies.
Cable executives who met for the American Cable Association's (ACA) annual summit expressed feelings that metered internet billing would be a part of the business future.
According to Broadcasting & Cable, ACA President Matt Polka said that metered pricing will be a necessity going forward for cable companies as they become broadband companies.
Polka gave that example of his heating bill in Pittsburgh, where he would love to pay the same flat rate all year-round for heating, but instead must pay more during the winter months. With all the network expansion and new internet services such as Netflix streaming, Polka said that cable companies won’t be able to provide service for just $40 per month.
Patrick Knorr, general manager of Sunflower Broadband, which has had bandwidth-based billing for four years now, said that a grandmother who just wants to read e-mail should not have to subsidize the college kid who downloads HD movies to watch later.
Knorr added that metered billing is the only way to manage infrastructure and that charging a flat rate "is not a sustainable business model." Sunflower Broadband currently offers an entry-level 3 GB service tier for $27.95 per month (without video bundle discount). Those who crave the top-level service can get 50 GB for $59.95 (without video bundle discount) per month. Those who go over their quota will be billed at $2.00 per GB, though customers can buy more bandwidth in advance in 15 GB blocks for $10 each.
Sunflower Broadband tries to put its bandwidth caps into perspective using data from more than two years ago. As quoted from its service site: In April 2007, 98.9% of users had less than 40 GBs of bandwidth usage, 86.98% of used less than 10 GBs, 49.46% of used less than 1 GBs of bandwidth usage per month.
Knorr went on to say that, unlike satellite, broadcast, and cable, the internet is not a particularly efficient way to deliver high-res video.
We’re personally of the opinion that the internet is a very efficient way of delivering all sorts of data, video or not. What do you think? Do ISPs have to charge for bandwidth to sustain a business model, or are cable companies just trying to throttle back customers to keep them paying for traditional TV services?
Effiecent.. Maybe not for cable.. Guess what cable is not the only high speed internet solution.. So sucks to be them.
Meanwhile competition will do it's thing. If it's possible to deliver more for less then someone will jump in. I left Comcast cable and went to ATT DSL because of quality issues. Bandwidth was fine but too many packet drops were killing my Vonage phone and VPN to work. Now I have less bandwidth but latency is lower and reliability is better.
People that don't have a choice are screwed but that's nothing new. ISPs can already adjust their pricing based on perceived lack of competition.
I don't believe those figures, and if they're real, they're on the verge of becoming outdated as online video content increases in popularity. The internet has become a necessary service for most of our generation. Abusing the rate of its growth would be holding everyone back.