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. icon
    andrew johnson (profile), 21 Oct 2009 @ 7:59pm

    Money is not the only form of capital. I think this may be a good decision by the telcos that would ultimately lead to a better experience for the customer. I recently encountered a similar situation when trying to figure out pricing for one of my own ventures and came to the same conclusion.

    The reason being that:
    metered billing options are complex but fair
    tiered models are a good compromise between complexity and fairness
    single-rate is as simple as it gets, but lumps everyone together

    The important factor in choosing from among these models would be to look at and compare the cost of complexity to real dollar cost for the customer. In this case, per byte pricing is probably way too much information for the consumer. Most infrequent users probably would care more about the complexity in setting up this new-fangled computer works than have to call billing ten times in order to save $15 per month. Average users would be paying the same dollar amount anyways and would be saving the cost of complexity. Heavy users care the most about the service and would be the most likely to complain or switch providers when an option becomes available; consequently they are getting a 'steal' in terms of dollar cost, and remain happy.

    All parties involved are better off overall. This is indeed a money-grab by the telcos, but if it is for the mutual benefit of consumers I don't see a problem with that.

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