Useage based Internet charges are coming back (1 Viewer)

DadsDream

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To me, as a consumer, this sounds like a giant step...BACKWARDS!

I remember the good old days in the 1990s when AOL charged people by the minute for the only available Internet connection in my town...dialup at a blazing 28.8 mbps. When a competitor moved to town, AOL went to a flat rate.

Now, Time-Warner Cable is launching a trial program to bill customers by usage. They're saying 5% of their customers account for over half their high speed Internet traffic.

Beaumont, Texas, you folks are the lucky city chosen for Time-Warner Cable's new billing scheme experiment! Congrats!

MSNBC
Time Warner tests Internet usage-based billing
Company said it will try new billing with subscribers in Beaumont, Texas
January 17, 2008


NEW YORK - Time Warner Cable Inc said on Wednesday it is planning a trial to bill high-speed Internet subscribers based on their amount of usage rather than a flat fee, the standard industry practice.

The second largest U.S. cable operator said it will test consumption-based billing with subscribers in Beaumont, Texas later this year as a part of a strategy to help reduce congestion of its network by a minority of consumers who pay the same monthly fee as light users.

The company believes the billing system will impact only heavy users, who account for around 5 percent of all customers but typically use more than half of the total network bandwidth, according to a company spokesman.

READ MORE
http://www.msnbc.msn.com/id/22707271/
 

buzd

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If you are opposed to internet providers to charge per minute of use, are you also opposed to cell-phone providers doing the same?
Well, yes, but it's not really the same analogy. Cable internet is always on, so it's more amount of usage (in terms of data transferred) than "minutes". Minutes made sense in the AOL days, because you were using one of their phone slots, and would pretty much max the data transfer the whole time (28 or 56kbps).

With cable modems, the amount of data you transfer per minute will vary with the application (streaming video, email, surfing, downloading music), which begs the next question. How much data "overhead" are you going to be required to absorb as operating systems and software "phone home" over your connection. What about a home user that contracts a virus that retrieves data and runs up a $4000 bill? Or the distributed computing programs (SETI, Folding@Home) that use idle bandwidth. And now we have online PS3's, Xbox, direcTV boxes. There's a lot of "passive" data transfer that's going to be an ugly surprise to customers under this model.
 
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DadsDream

DadsDream

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Hey, buzd, you bring up some excellent points!

Download and install Microsoft Windows XP SP 2...$5.00 extra due to excessive bandwidth use. :hihi:

There's a lot of "passive use" bandwidth use when it comes to keeping current software updated, particularly operating systems...office applications...anti-virus...OEM drivers and patches...

So, I'm going to get charged more because I keep my software up to date? :rant:
 

TDH

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I've seen 768k service advertised for under $15 a month. Saving a few dollars more a month wouldn't be worth the bother if you ask me.
 

Severum

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I wouldn't judge to harshly right off the bat. Some folks might be out of the house 9 hours or more every day at work, and then when they get home they might go online for 30 min to check their email. An example of this would be my mom. Pretty much all she does is check email and bank accounts once a day. But I know she's paying for unlimited service and doesnt really have a choice. Folks like that might benefit from a pay as you go plan.
Her service already has speed and transfer limits. From what I've read this will be a price increase for some users, not a decrease for users that use less bandwidth.
 

The Mongoose

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I wouldn't worry too much about this. As long as the market stays relatively free without major barriers to entry, competition will sort this out.

The article said 5% use the most bandwith. That's probably not any of us. We might even benefit from such a pricing scheme.

Whatever, as long as there is competition in the marketplace, we'll be fine.
 

Sandman

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The article said 5% use the most bandwith. That's probably not any of us. We might even benefit from such a pricing scheme.
I doubt that. I would expect that pricing will be set so that we would be paying at least what we are paying now. The 5%'ers would just be paying a lot more. This is a way to increase revenue...not decrease.
 

bigdaddysaints

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I doubt that. I would expect that pricing will be set so that we would be paying at least what we are paying now. The 5%'ers would just be paying a lot more. This is a way to increase revenue...not decrease.

no doudt in my mind thats what it is. I would say for every person that has extreme usage there are 2 people that have very little usage.
 

Eeyore

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So cable wants to try and protect it's television business by running its internet business into the ground?

I'm guessing that when the smoke clears they will have neither.

Excellent! The world needs business decisions like this so that college and high school business classes have models to study.
 

MrVoodoo

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switch from cable to DSL...

Phone companies would respond and bring more bandwidth at lower costs and then start allowing iptv to run through their lines.. particularly if they start rolling out FiOS in more areas.

I don't like the change at all and those who think you'd get a break on your costs - don't kid yourselves.. like mentioned in a few above posts, they're not going to lose any revenue through this.
 

buzd

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Phone companies would respond and bring more bandwidth at lower costs and then start allowing iptv to run through their lines.. particularly if they start rolling out FiOS in more areas.
Agreed - I believe that fiber will make most of the charge-by-usage issue moot. The real issue will be monopolies of ownership of the systems and price controls. I expect that the budgets of the internet backbone will continue to be capacity (data throughput) driven and those costs will trickle down, but competition between fiber (as it becomes more widespread) and cable vs what is realistically necessary in the home (how much bandwidth do you need for your appliances to do a firmware update?) will maintain the status quo, if not make the internet cheaper and more ubiquitous, if not invasive (from a big brother standpoint).

Whew - that's a long sentence. Sorry.
 
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Doobsdemons

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Exactly Buz. Once companies start rolling out fiber optic from server to desktop, the point will be moot. Right now most all is run on broadband or telephone cable.
 

staphory

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This would hurt the rural areas where there is less competition. The cable companies that try this in large metros will get eaten alive by their competition.
Well, I live in a rural area. The closest town that you can get cable Internet is Meridian, MS, 35 miles away.
DSL is 18 miles away.
The only options I have is dial-up (28,8 on a good day) and a wireless air card from AT&T(better than dial-up,not by much though).
The cable companies are simply not interested in customers like me and DSL really doesn't compete well in what the companies view as sparsely occupied areas.
 

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