ISPs Finally Realize That People Understand The Word Unlimited

from the we've-got-dictionaries! dept

Over the past few years there have been plenty of stories about ISPs who offered “unlimited” service that was actually quite limited. Every time this happened, the company would point out that it wasn’t fair for bandwidth hogs to take up all the bandwidth. That may be true, but if you’re going to stop them, you shouldn’t be calling your service unlimited. It’s false marketing. Apparently, ISPs have finally wised up to this and are no longer offering “unlimited” service. Instead, they offer service with “contention ratio-based broadband platform management,” otherwise known as a usage cap to keep the bandwidth hogs away.

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Comments on “ISPs Finally Realize That People Understand The Word Unlimited”

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loki74 (user link) says:

A utility like electricity or water

The answer is simple: charge customers based on how much they download/upload on a monthly basis. This model works for the electric companies. You pay for what you use.

It really doesn’t matter how fast someone’s line is, what matters is how much bandwidth they slurp up on a regular basis.

It isn’t too difficult to set up bandwidth monitoring and to send the data to the billing department! Someone with a 1.5 meg line who just browses web pages should not pay the same amount for someone with a 1.5 meg line running a iso mirror.

The days of the free lunch is over. People should be willing to pay extra for the extra bandwidth utilization, just like the power companies charge you based on how much power you use.

Mike (profile) says:

Re: A utility like electricity or water

Per usage “utility” pricing is a terrible idea for a variety of reasons. First, it *discourages* use. The internet took off when flat rate pricing became normal. Mobile phone use took off when flat rate (or, at least HUGE buckets fo minutes) became normal.

Charging on a utility usage model discourages usage, and adds a “mental transaction” cost as people are overly concerned about what they’re doing. That lowers the value of the service and harms the overall economic model for the service providers.

Offering mostly unfettered usage with some clear cap at the very, very, very high end to stop abusers seems reasonable — if it’s clearly stated.

loki74 says:

Re: Re: A utility like electricity or water

Then why is it that a utility pricing model works so successfully for energy providers? Sure, it discourages use, but that doesn’t seem to hurt the business model.

The utility model has served the energy providers quite well, and it has stood up to the test of time, despite any “mental transaction” costs inherant in such a system.

A utility model saves some low usage end users money. They’re no longer subsidizing the bandwidth slurpers in a flat fee pricing scheme.

Mike (profile) says:

Re: Re: Re: A utility like electricity or water

You don’t need to encourage usage or push people to find new ways to make electricity useful. However, it’s quite different with broadband.

Besides, if there were real competition in the energy market, you could pretty much bet that flat rate pricing would come along at some point.

loki74 says:

Re: Re: Re:2 A utility like electricity or water

I think you’re argument is valid, but be careful not to overgeneralize.

Bandwidth metering only discourages people from engaging in certain types of activity. It doesn’t have a negative impact on the users who are on the internet to visit web pages to find browse the internet looking for cooking recipes, checking their credit card invoices, downloading their email, etc. It does discourage people from file sharing, making large iso downloads/uploads, and any kind of extensive amount of file transfer. So, I think to say that metering will discourage only some kinds of activity, not internet usage in general.

As a matter of fact, bandwidth metering would actually encourage general usage activity. People who simply visit web pages or check email use very little bandwidth! Those savings can be passed on to them in their monthly bill.

On the other hand, those users who do a lot of file sharing and who make extensive use of the internet for those kinds of services will pay more.

So yes, that model would discourage a *type* of internet use, but really, the people who do use an extensive amount are a minority, not the majority. So, I think it would positively impact most users through cost savings, and discourage services such as file sharing.

I know if I was a consumer who was only interested in email service and web browsing, I would LOVE to find a provider who could save me some money through metering! Who wouldn’t?

Mike (profile) says:

Re: Re: Re:3 A utility like electricity or water

There are ISPs in places like the UK and Australia that do metered broadband… but they tend not to catch on. Even for those who don’t do much surfing, it’s a pain to always have to be thinking about usage — especially when it’s tough to tell what usage will be. People don’t think in terms of kilobytes and megabytes… and they don’t want to know what happens when someone sends them a huge file or they click on a page with a ton of pictures.

The mental cost is just too high.

loki74 says:

Re: Re: Re:4 A utility like electricity or water

I think that if users can save on their monthly internet bill they would be willing to put up with some mental cost.

If large files sent in emails of funny movies of monkeys scratching their butts or whatever wouldn’t be sent as frequently under such a system, then so be it. I think most people would be willing to give that up if they could save some money.

I’m curious as to why the metered ISP’s did not catch on.

Anonymous Coward says:

Re: Re: Re:5 A utility like electricity or water

Think about the people that already pay extra for services like Rhapsody and iTunes or that buy software and download over the net… Metered service would severly cut into these companies customer base because people would have to tack on whatever the additional cost of the bandwidth would be… Also an ISP offers a certain speed (currently) meaning that you are paying for the ability to use the full capacity that is paid for… I can eventually see see a capping system coming out but I don’t think they will go back to the days of pay per minute or per MB…

someone247356 says:

Re: Re: Re: A utility like electricity or water

A metered (utility would mean government regulated monopoly, something the FCC apparently disagrees with) model won’t work for internet usage. Internet usage is a luxury not a necessity. Plenty of people don’t use the internet, either because they can’t afford it, or more often, because they don’t see a use for it.

It’s more like cable or satellite television than electricity or water. Living without the former may be inconvenient, but it is nearly impossible to live without the latter, especially in urban settings.

Ever think of a reason why your cable television bill isn’t metered? They’ll charge you x cents per minute of television time you used, per television. People would switch back to the fewer channels, but *free* over the air signal, and cable would have been regulated to a small market of well off people who liked to watch television. Who knows, they might even exercise or read a book.

One doesn’t even have to suppose, just look at the historical record. When internet access was metered, per minute, hour, kilobyte, people would connect, read email, perhaps read some netnews and log off. Off line email software was all the rage. You would connect, download your waiting email, upload any email you had written, and disconnect. You would be off line composing your email, where it wasn’t costing you to relax and compose your thoughts. BBS’s that you connected through you *unmetered* POTS (Plain Old Telephone System) line were much more popular. FidoNet (now I’m surely dating myself) that transfered email and news though a series of POTS connections ruled. The internet was used by students and professors (well there was also some corporate and gov/military use) that didn’t have metered access. When ISP’s started offering unmetered access through unmetered POTS did the internet start to become wildly popular. The uptake in the UK where they have metered POTS was far below that of the US where unmetered POTS is the norm.

At the time 300 baud, or even 14K baud rates were slow enough that an ISP was more likely to be limited by the number of modems in his pool than by the bandwidth his users were consuming. Unfortunately, with multi megabit DSL and Cable connections it’s all to easy for a small number of users to consume most of the limited bandwidth that many ISP’s have provisioned for. Movie trailers, Linux distros, VoIP, or simply the latest Microsoft Windows patches mean that people expect much more bandwidth these days. The answer isn’t CAPS (imagine, “sorry, due to the large number of people watching the NBA play offs, we are capping your cable service at 2 hours per night during the playoff season to maintain the quality television experience of the rest of our customers”) or metered connections. Either increase the amount of bandwidth available at a reasonable price, or regulate use of the internet to the wealthy and affluent (hint: that wouldn’t be most, nor even a majority, of the population).

Just my $0.02 (Canadian, before taxes)

loki74 says:

Re: Re: A utility like electricity or water

That is a legitimate point, but I don’t think it’s worth abandoning the concept for. I think that the model could be modified to charge extra for those who are downloading hundreds of megs worth of data, not to charge extra for the small 50k pop up ads and flash advertisements.

Simon says:

No Subject Given

Those ISP’s that really insist that they must cap should identify their quiet times and not include usage during these times in their metering.

For example, if my ISP gives me a 50GB monthly cap, but says any activity between 1am to 5am isn’t counted, then I would take the time to schedule my Linux Distro downloads during these hours.

Mattb says:

Flat plus metered

Why not have a flat rate for a certain badwidth a month and anything over that is metered? The “certain bandwith” should be similiar to the 95% vs 5% figure everyone throws around. If the max that 95% of your users use is 10GB a month (just an example- I have no idea of the actual figure), then put the flat rate on that and charge extra for anything over that. The way you generally do not have to look at how much you are using if you are like 95% of the users. If you are in the 5% and you download 100GB a month (just an example), then you might pay an extra $10. This would only penalize the heavy users and maybe push them to reduce their usage or get higher priced lines.

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