Here Come The Broadband Tiers

from the but-of-course dept

For years, US broadband ISPs have been talking about the possibility of offering tiered services, and have even experimented with different offerings. However, they’ve seemed afraid to go to a fully tiered model, because they feared a backlash from users. A new study suggests, though, that the backlash might not be all that big. It will, of course, be bigger among those who are the most likely to feel the impact of slower or capped service – but, otherwise, most people won’t complain. The article suggests that the broadband providers should not set up tiers for existing users, but just create new “intro” plans to try to convince dialup users to move to broadband, without pissing off existing customers. Of course, some would point out that many broadband providers already have a usage cap – they just don’t tell anyone what it is.

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Here Come The Broadband Tiers”

Subscribe: RSS Leave a comment
Mark says:

Tiered pricing

I’ve been waiting for years for broadband to get down around $30 per month, when I’ll sign on. Still waiting. If tiered pricing would bring the service down within that range, it will get me aboard; speed caps don’t bother me too much since I’m not much of a downloader in the first place. But my cynical expectation is that Comcast (my local cable company) will just use this idea to put into effect something they’ve had in mind all along, that cable modems *should* cost upwards of $60 a month. So I expect the lowest tiers to be priced at $35-40, with the upper “super premium” tiers consisting of nothing more than current cable modem packages, but priced much higher. And, as my personal end result, I will still not be a customer, and will continue to await more sensible price structures.

Adrian Anders (user link) says:

Multi-tiered plans? More efficient? Yes. Benefits

Being an economics major in college, I believe that this kind of price discrimination (second degree) will do nothing but raise the profits of broadband companies, and reap more from the average consumer. After all, the broadband internet market is already highly concentrated, bordering on monopolistic in certain counties (in my county, there is only one broadband internet provider, Comcast, soon to be two with Qwest). Broadband companies will use their power to provide multi-tiered plans to price each according to the maximum each internet user group is willing to spend, only providing small quantity (of bandwidth) savings to those high end consumers. Consumers that are at the middle to low end of demand will lose value, as they will pay the same or more for less of the service they once had, as their “plans” expire. Expect the low end prices for broadband to remain high (30-40 a month for half the speed of the full service), while the “full” service kept as a slightly higher rate than the low end (50-60 a month). Consumers don’t win with oligopolies having the freedom to set their own service plans. Only through regulation of the broadband internet market as a natural monopoly will we see multi-tiered service plans become beneficial to consumers.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...