 MattAll noise, no signal.Premium
join:2003-07-20
Jamestown, NC
kudos:12 | Metered Billing Has Its Place While some here would argue that metered billing in ANY form is bad, it can be a positive thing if implemented properly. How is that you ask? Well, for starters, you don't move every tier to metered billing nor do you make it so a customer has to spend 300% more a month to keep the same product they currently have.
Just like Time Warner didn't want to introduce RR Lite or RR Basic but they wound up being wildly successful, you introduce a new tier, let's call it the Granny Tier, that is based on usage billing. You make it 100% usage based (never happen) or you charge $9.99 month + usage.
Then, if people want more speed, but a cheaper monthly price than the unlimited plans, maybe offer a higher speed tier. Price the unlimited at $29.99 a month like it is, but price the usage at $19.99 + usage. You'll inevitably catch people with overages, but you'll at least give them a choice and won't penalize your customers who are comfortable with their current plan or simply don't want to watch their usage.
I personally feel Time Warner should just raise the rates of all their plans by 25% and be done with the whole damn thing. That would more than cover their DOCSIS 3.0 upgrades while simultaneously increasing their revenue and earnings. Their pricing structure hasn't changed since it was introduced, so they could even justify it. Coming out and saying, "Hey, we haven't raised rates since we introduced our product 10 years ago, so it's time!" would make a lot more sense than the current shenanigans they are attempting.
Penalizing your existing customers under the false pretense that it is somehow "good" for them when it in fact penalizes them, is contemptible. |
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Lazlow
join:2006-08-07
Saint Louis, MO
1 edit | Matt
They really cannot justify it. Just look at TWC's 10K. The cost of Revenues for HSI was $146 million(page 60) but the Revenues generated by HSI was $4.159 Billion (page 89). That is a cost of less than 4%. Someplace in the other 96% they should be able to find the money to do the D3 upgrade without increasing rates one bit. Just look at Cablevision's statement last week, they expect that the D3 upgrade will cost them between $70-120 per customer. Considering CV only holds a 2.5% market share and TWC holds 9%, TWC should be able to get a better rate (cost/customer) just due to its size. |
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 espaethDigital PlumberPremium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2
 ·Clear Wireless
| said by Lazlow:They really cannot justify it. Just look at TWC's 10K. The cost of Revenues for HSI was $146 million(page 60) but the Revenues generated by HSI was $4.159 Billion (page 89). The 10K balance sheet only shows direct costs (power, hardware, maintenance, vendor fees) and not indirect costs like operating the service vehicle fleet, developing tech training programs, paying employee salaries + benefits, call center operation costs, etc. |
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| reply to Matt
said by Matt:While some here would argue that metered billing in ANY form is bad, it can be a positive thing if implemented properly. How is that you ask? Well, for starters, you don't move every tier to metered billing nor do you make it so a customer has to spend 300% more a month to keep the same product they currently have. It is possible to devise a revenue neutral tiering plan with appropriate overage fees so that 95% of your customers would see no difference at all in their monthly costs. And for those in the highest speed/usage tier(those heaviest 5% users), heavy usage would lead to the appropriate extra costs in overage charges.
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MattAll noise, no signal.Premium
join:2003-07-20
Jamestown, NC
kudos:12 | reply to Lazlow
said by Lazlow:Matt They really cannot justify it. I have looked at their 10k. I've linked to it several times.
Regardless, I am not opposed to a company making money. My thought is that usage based billing can be implemented without blatant disregard for your customer nor as a greedy, "consumer-be-damned" money grab. There is absolutely nothing wrong with Time Warner trying to increase earnings for their shareholders. There is if you try to do it in a dishonest way that is extremely anti-consumer.
I also don't feel that they should necessarily have to shoulder the burden of the entire DOCSIS 3.0 upgrade, especially considering they haven't raised rates in 10 years. I think a modest rate increase to cover the rollout of DOCSIS 3.0 and one which would allow them to keep their same profit margin would be beneficial to both sides.
This "usage based billing is good for consumers" crap is just that, crap. It's not good implemented the way Time Warner is attempting to implement it -- but it can be good if implemented properly. |
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Lazlow
join:2006-08-07
Saint Louis, MO
1 edit | Matt
If you really have looked at the 10K then you know that HSI costs have gone down(11% 2007/2008) over the last few years, while at the same time HSI revenues have gone up(12% 2007/2008). |
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| reply to fAcEtIOUs
said by fAcEtIOUs:said by Matt:While some here would argue that metered billing in ANY form is bad, it can be a positive thing if implemented properly. How is that you ask? Well, for starters, you don't move every tier to metered billing nor do you make it so a customer has to spend 300% more a month to keep the same product they currently have. It is possible to devise a revenue neutral tiering plan with appropriate overage fees so that 95% of your customers would see no difference at all in their monthly costs. And for those in the highest speed/usage tier(those heaviest 5% users), heavy usage would lead to the appropriate extra costs in overage charges. But that wouldn't lead to the revenues they seek. There were alot of watered down alternatives, however TW shot for it all at once. This should be now known as a benchmark for where all carriers want to take the consumer. Any "ala carte" type billing potentially could cut into the incremental base they have now. And theat 95% of your customers is the group that they're looking to have pay these new revenues! |
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MattAll noise, no signal.Premium
join:2003-07-20
Jamestown, NC
kudos:12 | reply to fAcEtIOUs
said by fAcEtIOUs:It is possible to devise a revenue neutral tiering plan with appropriate overage fees so that 95% of your customers would see no difference at all in their monthly costs. And for those in the highest speed/usage tier(those heaviest 5% users), heavy usage would lead to the appropriate extra costs in overage charges. I still think you have to give people the option of keeping their existing plans with no limits. I know personally, I'd pay a bit extra to not have to worry about monitoring my usage. If you have people who abuse it (the frequently touted "bandwidth hog") then you take appropriate action.
If it really is only 1% of their user base, how hard would it be to move them to a higher tier or force them to move to usage based billing? If they are really costing the company so much money, you'd solve two problems, one, they'd stop using so much which saves you money, or two, you generate more revenue from that customer. Either way (Whether you believe a customer not using as much data even saves them money or not. I don't.) you solve the problem you are parroting. |
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MattAll noise, no signal.Premium
join:2003-07-20
Jamestown, NC
kudos:12 | reply to S_engineer
said by S_engineer:But that wouldn't lead to the revenues they seek. There were alot of watered down alternatives, however TW shot for it all at once. I think that part sums it up very succinctly. They shot their whole wad going for the ideal way they wanted to bill their customers. |
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| reply to espaeth
You would need 200,000 employees being paid $50,000 each to get to even 1 billion. This indirect excuse is bullshit too. |
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Reviews:
 ·SureWest Internet
·AT&T Yahoo
 ·Comcast
| reply to Matt
said by Matt:said by fAcEtIOUs:It is possible to devise a revenue neutral tiering plan with appropriate overage fees so that 95% of your customers would see no difference at all in their monthly costs. And for those in the highest speed/usage tier(those heaviest 5% users), heavy usage would lead to the appropriate extra costs in overage charges. I still think you have to give people the option of keeping their existing plans with no limits. I know personally, I'd pay a bit extra to not have to worry about monitoring my usage. If you have people who abuse it (the frequently touted "bandwidth hog") then you take appropriate action. If it really is only 1% of their user base, how hard would it be to move them to a higher tier or force them to move to usage based billing? If they are really costing the company so much money, you'd solve two problems, one, they'd stop using so much which saves you money, or two, you generate more revenue from that customer. Either way (Whether you believe a customer not using as much data even saves them money or not. I don't.) you solve the problem you are parroting. The last time I went to a buffet you can't take home what you can't eat
To discourage customer from giving their leftover to others
as long as you don't take any home, their isn't a problem if you have taken more then you can chew
It is preferred that you leave it their so they can either dump it or save some leftover for the next day |
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| reply to espaeth
All of the indirect costs you mention would exist even if they didn't provide HSI, as they must have these for TV. Sure there are a few extra people that they might of had to hire to cover the people who buy only internet, but I'm sure the majority of their HSI customers probably have cable TV as well. |
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| reply to Matt
said by Matt:There is if you try to do it in a dishonest way that is extremely anti-consumer. This is exactly the kind of poor thinking of companies and those who support it today. ONLY being dishonest is anti-consumer? Falsifying data (which is what most are doing now) to support their own agenda is not dishonest? What about greed? $1/gb is not excessive greed? $0.20/text message is not excessive greed?
I am all for companies making money, but legitimate money. They can make a decent profit going somewhere in the middle or less without today's view that whatever business does is good for the consumer. Sorry, but I won't stand for this greed going on invading internet too. It is bad enough most places do not have competition, but taking more fees and gross tiering is getting out of line...
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- "Techie" Jim |
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 Jerm
join:2000-04-10
Richland, WA
kudos:2 | reply to Matt
I'm all for $10 + actual use. IF THEY WOULD CHARGE ONLY THEIR COST OF BW * 2 maximum!!!!
It has been estimated that large bandwidth companies only pay between $0.05 to $0.10 per GB. And lets say it takes double that to "get it to your home" and thats still only $0.20 per GB maximum. So a more than "fair" price might be $0.40 per GB - with it possibly being half that.
Heck Amazon's S3 service charges $0.20 per GB. |
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 RARPSL
join:1999-12-08
Suffern, NY | reply to Matt
said by Matt:Just like Time Warner didn't want to introduce RR Lite or RR Basic but they wound up being wildly successful, you introduce a new tier, let's call it the Granny Tier, that is based on usage billing. You make it 100% usage based (never happen) or you charge $9.99 month + usage. I agree that 100% usage based will never happen since it is not fair either to the ISP or the customer. The way to go is the second method - A flat fee for the making the service available and a per-unit for for your usage of the service.
This is the way production costs are computed and it fits this situation. To produce widgets, you have an initial cost to set up the machine to produce them and then a per-item cost to produce a widget once the machine is set up. In this case, the set-up is connecting the customer (including billing them) and all the infrastructure needed to deliver access to the Internet. The per-unit cost is the cost of actually using the Internet.
Then, if people want more speed, but a cheaper monthly price than the unlimited plans, maybe offer a higher speed tier. Price the unlimited at $29.99 a month like it is, but price the usage at $19.99 + usage. You'll inevitably catch people with overages, but you'll at least give them a choice and won't penalize your customers who are comfortable with their current plan or simply don't want to watch their usage.
You are confusing the speed that the user can move data with the volume of data that they can move. A higher speed tier has nothing to do with how much data you can move - Only how long it will take you to move it. Unless you want to move more data then a slow tier can handle if used 24/7, all switching to a faster tier does is decrease the amount of time it takes to move the same amount of data. |
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| reply to jadebangle
Rollover bandwidth...theres an idea. Although you'd have the same congestion at peak times now! |
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espaethDigital PlumberPremium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2 Reviews:
·Clear Wireless
| reply to delltechkid
said by delltechkid:All of the indirect costs you mention would exist even if they didn't provide HSI, as they must have these for TV. Sure there are a few extra people that they might of had to hire to cover the people who buy only internet, but I'm sure the majority of their HSI customers probably have cable TV as well. There are a number of dual-purpose employees, which is why it's difficult to tie them to a specific product. Still, if you needed 40 FTE hours/week to serve a function specific to video that same person isn't going to be able to have more time dedicated to HSI. As workload increases you need more people, even if some of their duties may be shared.
The HSI call center support staff are different from the video support staff. There are still many data-only field service techs, and without the HSI product they wouldn't need the CMTS layout they have (and associated employees who manage that), they wouldn't need the abuse staff to deal with DMCA complaints, they wouldn't have as much to manage in terms of ARIN IP netblock allocations, DNS assignments, mail server operations, DNS/DHCP server operations, etc.
No matter how you look at it, direct costs of a specific service alone are a poor way of relating the total cost of providing that service to revenue. |
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3 edits | reply to jimbo2150
said by jimbo2150: What about greed? $1/gb is not excessive greed? $0.20/text message is not excessive greed? I am all for companies making money, but legitimate money. And what exactly is greed? At what point does making a profit become greed? Well, that is strictly in the eye of the purchaser. For some people, greed is any company that makes a profit greater than 1%. And for a very few, greed is when a company makes any profit at all. So what is the % that fits your definition of greed? Is it a profit tied to the Cost of Capital? Is it a risk weighted return better than you could earn in a so-called safe investment like treasury bills? Is it some % above the rate of inflation?
So, what is your definition?
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 jmn1207Premium
join:2000-07-19
Ashburn, VA | reply to S_engineer
said by S_engineer:Rollover bandwidth...theres an idea. Although you'd have the same congestion at peak times now! Not to mention that it would completely negate the notion that metered billing is a necessity for the continued survival of the cable industry, and not just a money grab. |
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Reviews:
·Charter
·Clearwire Wireless
2 edits | reply to fAcEtIOUs
I'd call greedy any broadband based company that is attempting to get more money for less service during a rough recession that will stiffle recovery
For all the talk of defending corporations TK, I'm surprised your defending this. If the economy doesn't recover, which steps like these may make it happen, their won't be any way for corporations to survive.
With all this said, I think greed is something that works outside of the free market. If you set your product to be any price, and the customer pays it, then good. Even if it's billions of dollars.
If they don't want to pay that, then you go down. Greed is destruction of free market IMO. |
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