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Comments on news posted 2009-05-29 13:35:28: Speaking publicly on the issue for the first time since Time Warner Cable's PR disaster, CEO Glenn Britt admitted to attendees of a Sanford Berstein investor conference that efforts to hoist per-byte billing upon unwilling customers didn't uh, go ver.. ..
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davidwr
@rr.com
| Per-TB pricing is a good idea but it must be fair Set your prices so your percentage profit is about the same regardless of usage, and the overall profit should be about the same as it is now assuming usage doesn't change much.
Low end users should pay a base charge which covers the cost of running the account and a small profit.
Medium and high-end users should pay a base charge plus a per-GB charge that reflects the marginal cost of delivering each additional gigabyte, plus a small mark-up.
Let's say your costs in a given city are $10 per customer plus, on average, $0.05/GB or $50/TB. Yes, some bytes costs more than others but this is beyond the customer's control so don't pretend that it is.
Lightweight users will cost you well under $11/month so you should charge them maybe $13. Heavy users who download 60 30GB BluRay-quality movies every month (2TB) will cost you about $110 so you can charge them maybe $130. Super-users who subscribe to 20Mbps and suck down stuff 24/7 at full speed will get less than 7TB and cost you less than $360/month. They should never pay more than about $430/month at that speed. Of course, you'd be happy to steer these high-monthly-profit customers the highest speed available so they could use more and pay more, even if it meant upgrading their neighborhood pipes.
Even if you beefed up your base charge from about 18% profit to 100% profit, that just adds $10 to everyone's bill.
Disclaimer: These numbers may not reflect reality, but my point is clear: Since you are a monopoly or near-monopoly, you have an obligation to charge something close to what it costs you plus a fair profit. Don't get greedy. | |
| | sonicmerlin
join:2009-05-24
Cleveland, OH
| Re: Per-TB pricing is a good idea but it must be fair Your numbers are INSANE. They don't just fail to reflect reality. They reflect bandwidth costs TEN YEARS AGO!
All you people acting satisfied with caps are so foolish. You've basically played right into Comcast's hands with their 250 GB caps. You have absolutely no idea how much bandwidth costs an ISP. They all refuse to release data on their actual costs.
If a million people download a video from youtube, it barely costs the ISP anything because they download the video once from a Youtube server, then distribute for almost nothing across their extremely robust internal network.
Thus $.10/GB is extremely expensive and overpriced. You don't seem to understand how little money ISPs spend on maintaining their networks compared to their profits. We're talking about TWC spending $37 million on maintaining the network, versus $4 billion in profit. These cable companies have insanely high profit margins. Caps are truly disingenuous. And metered billing is nothing more than price gouging until ISPs release the actual cost of bandwidth to them.
Ultimately the problem with caps and metered billing is that it forces the user to "negotiate" their internet usage. They constantly think "do I use bittorent, netflix, or play online". This attitude stifles innovation and progress.
Think about how much people in countries like Japan or Sweden pay for their internet connections. It is much, much less than $.10/GB.
Even in the US Optimum Online's Ultra tier is uncapped and provides users with true 100/15 speeds, as revealed on this site's OOL forum.
There is no reason to implement caps. ISPs don't have bandwidth congestion issues that can't be solved with just a *tiny* bit of infrastructure investment.
We shouldn't settle for less just because we think it's "fair", considering we have no idea what "fair" actually means. | |
|
looking
@rr.com
| Consumption model makes no sense Caps or metered billing makes no logical sense. The movement of information is not like a natural resource. There is absolutely nothing that is "consumed".
Consumption models do *nothing* to alleviate network saturation or address the so-called bandwidth hogs at all -- the most often used poor rationale for such models. It's like limiting how much people drive a month thinking it will cut down on peak hour traffic. In fact, network usage is already under control with QoS and (hopefully fair and dynamic) throttling schemes!
quote:
"If, at an extreme, you could get all of the programming you get over cable for free on the Internet, over time people will stop buying (TV)," Britt told investors in a bit of candor that wasn't apparent in the company's communication with its customers.
... as if most consumers don't realize that already... maybe he should come straight out and say it rather than excuse the debacle being about PR and "public education" | |
|
buggerz
@teksavvy.com | 50$ for a capped 60 gb 1 megabit unlimited 60 gb 1 megabit unlimited
80 gb 1 megabit unlimited
100 gb 1 megabit unlimited
......
get the drift your all being shafted with caps | |
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duder
@rr.com
| buy this crap say good by to twc i have had it with them going to go back to tv and dsl for now fios is right up the block from me so soon i will not need there crap any more. keep this crap up and the stock holders will have crap like gm 2 bucks a stock any thing to keep the fat stock holder happy and get them fatter metered billing keep it | |
| DufiefData
join:2006-06-13
Gaithersburg, MD | It's the "education" system... I love the insistence that the problem isn't bad policy, but a simple lack of consumer "education".
So the main issue is that the "education" tactics to get customers to support bad policies haven't worked. | |
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The cap may already be bacl