T-Mobile, Leap Move Take A Different Tack On Mobile Broadband

from the all-you-can-eat-no-more dept

Lots of broadband operators around the world have been talking about how their networks can't keep up with traffic demands, so they'll have to shift back to usage-based pricing. In particular, US mobile operators AT&T and Verizon have led the rhetoric, even as they continue to launch the unlimited plans they say are such a problem. The head of one broadband provider in the UK recently said a switch to usage-based pricing, and away from flat-rate plans, was inevitable as soon as one operator in a market made the switch. He dismissed the idea that operators would seek to differentiate by sticking with flat-rate plans, or by taking any other pricing strategy than usage-based plans, ignoring the fact that consumers have grown accustomed to flat-rate offerings, and that the lack of clarity in usage, billing and pricing that per-unit plans are a big turnoff for them. Already, we're seeing some signs that the operator landscape may not be dominated by such groupthink, as T-Mobile and Leap Wireless have made changes to their mobile broadband plans that are out of step with many other operators. The two companies have changed the way the caps on some of their plans work: for instance, on T-Mobile, when a user reaches their 5GB monthly cap, they don't get hit with overage fees, the speed of their connection gets throttled, avoiding the uncertainty inherent in usage-based pricing. Perhaps it's not a perfect situation, but it does show that some operators aren't afraid to step out from the party line and explore different pricing models. It also builds some hope that when some providers do decide to regress to usage-based schemes, there will be some choices for consumers.


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  1.  
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    barney rumble, May 5th, 2010 @ 12:09am

    WRONG

    if your smart when that operator goes to usage based billing you PILE TONS a cash into upgrades so you can WAIL on having a unlimited plan while hes stuck GOUGING people and you can offer lower pricing and unlimited , PEOPLE WOULD GO FOR IT and the rest of them would be left in the dust this short term gain crap is wrong and the higher prices leaves people on disabilities and low incomes out of the technology OR has them use the absolute minimum and thus everyone loses.

     

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  2.  
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    Josef, May 5th, 2010 @ 2:07am

    The Old Way

    There is no bandwidth shortage. It's the old mindset of the telecoms and it's just like the recording industry, the telecoms are used to usage-based pricing and they don't want to change that business model. Ever since the death of long distance billing, the telecoms have been trying to get it back.

    When long distance died, the telecoms shifted to local long distance billing, but mobile phones and VoIP killed that. Then the cable companies and telecoms realized that customers were used to usage-based plans and began to implement that on VoIP.

    In the large telcos their wireless and broadband networks communicate with each other and have plenty of bandwidth, otherwise they wouldn't be moving into video so heavily to compete with cable if they were so strapped for bandwidth.

    Just like the recording industry cannot keep up with technology, the telecoms and cable industries are having similar issues. They may be a little be better equipped to handle new technology, but they still face a number of competitors that can take advantage of their reluctance to change.

    Skype???? Google???? Clear????

    Let them keep pissing off customers and see how fast their competitors take advantage of the market.

     

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  3.  
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    Griff (profile), May 5th, 2010 @ 2:22am

    I'm all for usage based plans

    I don't wish to pay a larger fixed price because some users prefer to stream video (or even music) all day long.

    I'd be quite happy to pay no fixed charge and an entirely usage based fee PROVIDED
    - I could see at a glance online what my usage so far was including a trend throughout the month (which would help me to identify where I was wasting my bandwidth)
    - there was the possibility of cheaper bandwidth in the off peak times of the day (whenever those are) which would spur innovation in the "scheduled download"
    - everyone did it and it was genuine competitive market (thus ensuring it doesn't just put overall prices up)

    My net connection really should be no different from my connection to the electricity. (When you see how much energy data centres use, profligate use of bandwidth rapidly seems like an ecological problem anyway).

    And it would be good for the country generally if we learnt to do what didn't need to be done in real time at off peak times. It would spread the load and make way for the essential stuff.

    If you look at something like BBC iPlayer (probably the single biggest bandwidth hog on UK home connections) it would make sense for them to offer a feature whereby you flag a show you'd like to have watched but couldn't, and it gets it onto your hard disk at some point in the next 24 hrs using low bandwidth connection. Then you watch it before it expires. Watching it live 2 days later at the peak of the evening bandwidth demand (when everyone else is doing the same) makes little sense.

    The main argument AGAINST metering done properly is that rather than taking a look at something "just in case it is interesting" people will choose not to if they can see $$ ticking away on a free utility toolbar. (The same as having a real time display of electricity usage in their house teaches people to turn off unused lights).

    People with a real time cost display might rapidly go off websites that showed video ads and needless amounts of rich content. If it was $0.01 to watch that 5 minute YouTube clip, would we feel differently about dancing hamsters ? Would using the company PC for private use become a more serious offence ? Would universities discourage dorm file sharing on financial grounds ? Would Skype go under as people saw the pennies ticking away ? Would teleconferencing collapse causing a return to cheap air travel ?

    I doubt it. Mosty people cheerfully piss away electricity and that's always been metered.

     

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  4.  
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    Anonymous Coward, May 5th, 2010 @ 2:55am

    Mean while other countries are going the other way.

    http://www.v2p.jp/video/english/index.html

    I think that that is a government initiative to create massive user content on mobile networks. It uses P2P as a backbone LoL

     

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  5.  
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    Nathaniel Brown, May 5th, 2010 @ 3:46am

    Have a look at what's happened in Australia...

    Australia is a bit different to other markets since we are a long way from the "backbone" of the internet and most of our traffic is overseas not local. This means that Internet in Australia has almost always been metered.

    Originally you bought a "CAP" and then you paid a massive amount if you went over. Example: 10GB cost $50 + $150 per GB. A number of people got hit with $1,000+ bills once their children discovered youtube or online gaming, etc.

    After a while a lot of ISPs offered metered and unmetered bandwidth. Certain FTP sites did not count against your quota. Some Australian video sites did not count, etc.

    Over time shaping became the defacto standard since so many people had been burned (or know someone that had) by excess usage fees. This meant that when you reached the cap you could still access the internet but it was reduced to 64/64kps or 256/256kps. That way surfing and email still worked and you didn't break the bank.

    Currently most ISPs have separate peak/off peak times. I personally have 30GB on peak, 60GB off peak. If I want to download something large I generally schedule it. I also have updates set to run in the off peak window, etc. Also the excess rate for most ISPs has dropped to less than $1 per GB which isn't cheap but much better than $150. A few ISPs offer unlimited but the plans are expensive.

    The final difference between our metered plans an the plans that I have heard about overseas is that the ISP normally has a website that reports your daily usage updated daily including historical usage. There are also apps that sit in your task bar that scrape this information so it is easy to know how close you are to your cap.

    Most ISPs let you upgrade to a high cap for free but charge to downgrade your cap.

    Finally the caps are slowly but constantly increasing with increase usage.
    10 years ago $50 = 5 GB + $150 per GB.
    5 years ago $50 = 10GB peak/ 10GB off peak, 64kps shaped.
    3 years ago $50 = 20GB peak/ 40GB off peak, 128kps shaped.
    1 years ago $50 = 30GB peak/ 60GB off peak, 256kps shaped.
    now $50 = 40GB peak/ 100GB off peak, 256kps shaped or $0.5 per GB.

     

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  6.  
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    Nick Coghlan (profile), May 5th, 2010 @ 4:40am

    Re: Have a look at what's happened in Australia...

    Generally agreed on everything Nathaniel posted. The "sky is falling" rhetoric from US commentators about tiered pricing being the death of the internet has never made a lot of sense to me, since download quota + over quota throttling + readily available usage information really doesn't put that much of a crimp in your internet usage. It *may* start to be an issue for HD video heavy services like Netflix, since they won't be getting subsidised by the non-Netflix users any more.

    The biggest hassle with metered usage here in Australia is the *way* it is implemented.

    If the ISP wanted to be nice, they would instruct the equipment responsible for the link to your house to drop the link and renegotiate it at a lower speed. Your router/computer would see the lower speed and everything would generally adjust fairly gracefully.

    They typically don't do that though - they just drop a percentage of your packets until you're below the limit (http://en.wikipedia.org/wiki/Leaky_bucket). When we're talking cutting a 5+ Mbps connection to 256 kbps or less, that's a lot of potential for dropped packets.

    Yes, it's better than overage charges and a lot better than no internet at all, but you still don't want to be gaming on a shaped connection.

    (Techy types with ADSL and a router with adjustable SNR margins can smooth out a shaped link by cranking the SNR margin up to ridiculous levels, but that trick is going to be far beyond most internet users)

     

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  7.  
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    Anonymous Coward, May 5th, 2010 @ 5:01am

    Re: WRONG

    you're = you are

     

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  8.  
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    abc gum, May 5th, 2010 @ 5:12am

    Re: Re: Have a look at what's happened in Australia...

    Rationalizing industry deceptive advertising practices does nothing to help solve the problem. If they advertise an unlimited plan, then it ought to be unlimited. Their definition of unlimited is childish at best.

    If they want to sell metered plans, then they ought to advertise the plan as being such and provide a useful tool to measure said usage.

    In the end, they just want to charge more and are looking for excuses to do so.

     

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  9.  
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    Richard (profile), May 5th, 2010 @ 5:16am

    Re: I'm all for usage based plans

    BUT Billing costs monsy.

    I've seen predictions from the BT long term research group that the cost of billing will dwarf the cost of bandwidth in the future.

    Bandwidth is nothing like electricity. Electricity generally has a significant marginal cost to generate . Bandwidth has no per usage cost to the provider.

     

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  10.  
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    Richard (profile), May 5th, 2010 @ 5:21am

    Re: Re: I'm all for usage based plans

    Sorry - by billing I meant metering

     

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  11.  
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    hxa, May 5th, 2010 @ 6:58am

    Re: Have a look at what's happened in Australia...

    This is very much like Britain.

     

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  12.  
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    Hephaestus (profile), May 5th, 2010 @ 7:30am

    Re: Re: WRONG

    spelling nazi!!

     

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  13.  
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    Hephaestus (profile), May 5th, 2010 @ 7:35am

    "US mobile operators AT&T and Verizon "

    Yeah ... and sprint is sitting on the sidelines with a big ole grin and the potential for a ton of new customers.

     

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  14.  
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    Dan (profile), May 5th, 2010 @ 8:53am

    They want people to go over their caps.

    The bandwith providers want metered plans, but they don't want you to be able to measure and control your use. Comcast finally announced their 250GB/month cap in the U.S. some time ago. There still is no way to monitor your usage. It would be great if AT&T offered a way for parents to cap their child's phone's minutes as part of a family plan. They don't. My bandwith providers don't want to offer anything that is going to make me aware of going over that cap.

    If it was about wanting you to curtail your use for the sake of limited network capacity, they could easily give the customer more controls.

    The point is, they WANT you to go over your cap. They want metered plans, so customers have something to violate and be "fined" for.

     

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  15.  
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    Anonymous Coward, May 5th, 2010 @ 9:57am

    Re: They want people to go over their caps.

    Comcast's website shows your usage in any way you like. They have it for a few months now.

     

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  16.  
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    Derek Kerton (profile), May 5th, 2010 @ 3:42pm

    Re: Re: Re: Have a look at what's happened in Australia...

    But their points were that in Oz, the ISPs DO advertise and deliver Metered Plans, and it has NOT been the death of the Internet.

    Here in the US, the carriers persist in wanting to call their plans Unlimited, but also wanting to limit them. That is wrong.

    But would you be against such plans if the US ISPs made the marketing honest, and billed it as Limited?

     

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  17.  
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    Derek Kerton (profile), May 5th, 2010 @ 3:47pm

    Re: They want people to go over their caps.

    "It would be great if AT&T offered a way for parents to cap their child's phone's minutes as part of a family plan. They don't."

    Well, you're wrong about that. The offer "AT&T Smart Limits for Wireless Parental Controls"

    http://www.wireless.att.com/learn/articles-resources/parental-controls/smart-limits.jsp

    Although they do "get ya" by charging $5 a month for the favor.

     

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  18.  
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    Nick Coghlan (profile), May 6th, 2010 @ 11:45pm

    Re: Re: Re: Re: Have a look at what's happened in Australia...

    They actually do sometimes call them "unlimited", since even if you go over your quota, your connection remains active and you don't pay any extra (so they're technically telling the truth).

    However, most of them don't do that, and even the ones that do still clearly spell out what the quotas are as well as the shaped and unshaped maximum speeds.

    Any given ISP is only going to have so much bandwidth connecting it to the backbone. I'd prefer them to have some honest accounting method (such as download quotas) to rate limit their users rather than making unrealistic promises of being able to offer full speed connections to every user, all the time.

    As I said, the *only* service I can think of that this system may cause substantial difficulties for is a high resolution Netflix type video-on-demand service. With a 100 GB quota (typical size for a current "heavy user" account down here), that's only about 44 hours of 5 Mbps video (and full HDTV signals can require significantly more bandwidth than that).

    However, the bandwidth demands of high resolution video so thoroughly dwarf the demands for anything else that it probably makes sense to target plans specifically at a TV replacement role rather than assuming a one-size-fits-all model. In particular, I don't want my comparatively low bandwidth network gaming subscription fees subsidising somebody else's HDTV viewing.

     

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