AT&T Broadband Goes For Tiered Pricing

from the wrong-way... dept

A few months ago all the cable broadband providers started discussing tiered pricing for their service. One of the things they said was that the plan wasn’t to penalize higher bandwidth users, but to offer lower introductory fees to try to get more people to sign up. I actually thought this was a much smarter way to offer tiered pricing, and would help these companies get many more subscribers. Apparently, AT&T Broadband wasn’t a part of those discussions, or changed its mind. Instead of offering a lower priced introductory offer for slower broadband that might convince more people to sign up, they’re launching a more expensive options for people who want slightly more bandwidth. I doubt many people will sign up for it. It’s nearly twice as expensive, and the bandwidth difference isn’t worth it. Makes you wonder who’s making decisions over there.

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Comments on “AT&T Broadband Goes For Tiered Pricing”

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steve snyder says:

Tiered Pricing

Pretty much all of the stuff I’ve seen on tiered pricing is to bump up for the higher bandwidth rather than drop down for the lower–I agree this is a bad way to do it. I would guess for 80% of the people who don’t have broadband the high cost is the reason (20% due to availabilty for them). Lower the price for an “entry level” broadband and watch how many more subscribers they’d have, not to mention that a certain percentage might pony up to the higher speed once they get a taste.

But I still don’t know about the tiered pricing in general–my problem with it is that it doesn’t reflect the costs so they’re charging more for something that doesn’t cost them more. Once the line is there and everything is installed, does a 500k cable connection cost less than a 3 mb? I would think support is perhaps the biggest cost, that the truth is lower bandwidth users are the ones who are more expensive to support–high bandwidth users tend to be more computer savy and fix their own problems.

I do see one exception–I can understand truly excessive users paying more–say people doing major filesharing or what have you–at some point their “hogging” bandwidth has a negative impact on the rest of network.


Ed says:

They will offer a lower-priced tier

The news I read today says that AT&T will eventualy be offering a slower, lower-priced tier to attract more people away from dialup.

I have their current service (claimed 1.5M/256K) and I’m in one of the areas to offer the faster service, but it doesn’t seem like my connection ever achieves the rated speed. I’m certainly not going to pay more unless there’s some guarantee of throughput. I think that may be the hidden danger in offering tiered pricing for cable modem service. I can put up with practically anything because it’s better than dialup, but if I pay for the expensive plan and the resulting speed is little or no better than a cheap plan, then customer service will be hearing from me.

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