If Per Byte Pricing Is 'Only Fair' Why Have Telcos Ditched It For Mobile Data Plans?

from the hypocrisy-in-action dept

For the past couple of years, telcos and cable companies have been pushing for metered broadband, usually with the bogus claim that "it's not fair" for a light user to be subsidizing a heavy user. This is a neat little disingenuous trick that implies "light users" would see their bills decrease under metered billing plans. However, the same telcos pushing for metered broadband on connections are the same telcos who have wireless operators as well... and for mobile users, they're doing away with the metered billing option at the lower end, forcing everyone into a much higher priced all-you-can-eat model. Oops. Metered billing has nothing to do with fairness. It's an attempt by telcos to squeeze more money out of customers in a market where they often have little in the way of competitive options. Because, as we've seen, when there's real competition, it's a lot more difficult for providers to offer such plans.

Filed Under: metered billing, metered broadband, telcos

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  1. identicon
    CAS, 21 Oct 2009 @ 11:41pm


    "Oh yeah, there is that thing about wiring and physical installation, etc."

    You're making a critical mistake here that seemingly every major player in the industry is making. The last mile problem WILL NOT BE SOLVED by capping aggregate data usage. This is exactly why charging per byte makes no sense. The last mile problem is caused by PEAK DEMAND not AGGREGATE USAGE.

    Don't forget that bandwidth is a rate. And in fact, we all already have bandwidth caps - this is what 5mbps means. It's a cap on the rate at which we can receive data.

    A usage cap is different all together and the reason it's an issue is because while the last mile is the major cost, usage caps will not solve this problem.

    The reason P2P/Video streaming is an issue isn't because it's a lot of data. It's because it's a lot of data over a short period of time. Again - the key issue here is rate, not aggregate. To the telco's 1MB/h over 24 hours is preferable to 24MB/h over 1 hour.

    The reason billing per byte doesn't make sense is because the marginal cost of transmitting a byte of data approaches ZERO. Economics demands that the cost to consumers approach this cost. Demand is another thing that fortunately, we pay for already.

    Someone dealing with this mess at the governmental level needs to take a look at regulation in the energy industry. The energy industry faces the same problems that the telco's are facing and it should provide a great model for what to do in the telecom industry.

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