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Charter Considering Usage-Based Billing
In Order To Lure DSL And Dial-Up Customers

A little more than a year ago, Charter Communications informed us that while they had imposed "soft" or unenforced caps on several of their broadband tiers, the company had no plans for tough enforcement of these caps -- or a shift away from flat-rate pricing to metered billing. One year later, talking about the company's 2010 fourth quarter results, Charter CEO Mike Lovett says Charter's considering using metered billing as a way to shift the remaining dial-up users from dial-up to broadband. According to Lovett, Charter also sees metered billing as a way to lure some customers over from lower rate DSL offers. Lovett's specific statement on the earnings conference call with analysts and the press:

quote:
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I think there is an opportunity to look at usage-based pricing not necessarily at the high-end but at the low end, to create some attractive price points that are tied to usage to bring folks out of the dial-up experience. And there is probably some share shift opportunity with DSL as well. Strategically that's how we're looking at usage-based pricing today.
Many cable operators offer "lite" tiers, usually at speeds of less than 1 Mbps, in the hopes of snagging more cost conscious users or dial-up converts (of which there's not many left). Occasionally such tiers aren't advertised and are only offered via retention departments to customers who are considering departing to a less expensive DSL option. It's not clear how capped and metered tiers would work better in this regard than the existing, cheaper and slower tiers.

While per-byte billing is often presented by carriers as a way for light users and grandmothers to save money, most of the pricing models we've seen introduced under this banner fail to offer light users real consumer value, usually taking their standard introductory flat-rate price point (say $35) and then tacking on impractically low caps and high per byte overages. Given Time Warner Cable's rather public failure on this front and the ongoing debate in Canada over high per byte pricing, Charter's going to have to tread carefully if they want to avoid a public relations headache.
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DataRiker
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join:2002-05-19
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DataRiker

Premium Member

Wolf in sheeps clothing...

Anybody think charter is going to give a discount to low bandwidth users?

Or, more likely, they will have their standard price and rape users who go over an arbitrarily low cap.

UBB never works in your favor, EVER!
Chubbysumo
join:2009-12-01
Superior, WI
·Charter

Chubbysumo

Member

Re: Wolf in sheeps clothing...

more than likely, its a flat rate with caps and overages. if they do true usage based billing, im on board, and happy. if they only charge a small line maintenance fee per month, and then a true price of $0.06 per GB of usage(200% of actual costs) then my bill would be a little over $10 per month+ the line maintenance fee(which should be minimal).

DarkLogix
Texan and Proud
Premium Member
join:2008-10-23
Baytown, TX
kudos:4

DarkLogix

Premium Member

Re: Wolf in sheeps clothing...

said by Chubbysumo:

more than likely, its a flat rate with caps and overages. if they do true usage based billing, im on board, and happy. if they only charge a small line maintenance fee per month, and then a true price of $0.06 per GB of usage(200% of actual costs) then my bill would be a little over $10 per month+ the line maintenance fee(which should be minimal).

LOL
more likely they'd do a line maint fee of $30-40 and $1 per GB
if you think an ISP that trys to hit consumers with UBB are going anywhere near transit rates you must be kidding yourself

88615298
Premium Member
join:2004-07-28
West Tenness

88615298 to Chubbysumo

Premium Member

to Chubbysumo
said by Chubbysumo:

more than likely, its a flat rate with caps and overages. if they do true usage based billing, im on board, and happy. if they only charge a small line maintenance fee per month, and then a true price of $0.06 per GB of usage(200% of actual costs) then my bill would be a little over $10 per month+ the line maintenance fee(which should be minimal).

you're high. They'll easily charge $1 per GB or more. If you think Charter is going to price their service where they LOSE money on current customers you're crazy. If you're paying $50 with Charter now you're going to pay that much if these new fees come about. Charter isn't going to say "Ok we'll give you internet for less than half what you're paying now."

KrK
Heavy Artillery For The Little Guy
Premium Member
join:2000-01-17
Tulsa, OK
Netgear WNDR3700v2
Zoom 5341J

KrK to Chubbysumo

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to Chubbysumo
It won't be. It will be a set monthly rate, with a low cap, and then ridiculously high overage charges.

Yet they'll advertise it as super cheap and offer introductory rates or even wave monthly fees to sucker people. Then they'll announce "Consumers embrace UBB" and begin ratcheting up the charges and spreading it to other plans and tiers--- claiming it's what the marketplace wants and it's for the benefit of consumers/customers.

Mark my words--- no good will come of this.

cork1958
Cork
Premium Member
join:2000-02-26

cork1958 to DataRiker

Premium Member

to DataRiker
"rape users who go over an arbitrarily low cap"

That's the part they're hoping for, right there!!
openbox9
Premium Member
join:2004-01-26
Springfield, VA
kudos:2

openbox9 to DataRiker

Premium Member

to DataRiker
said by DataRiker:

Anybody think charter is going to give a discount to low bandwidth users?

If the company wants to actually win over $5-10/mth dial-up users, yes Of course, the only real reason to snag those customers is to "get 'em hooked" and then up-sell and/or cap/meter them for additional revenue. A plain $5-10/mth customer is likely more costly than it's worth for most cable ISPs.

ChuckgoCARt
@teksavvy.com

ChuckgoCARt

Anon

Re: Wolf in sheeps clothing...

Because of user based billing in Canada the opposite has happened. Many who were on broadband went back to dial-up as everything was throttled and the overuse fees were so steep.
gorehound
join:2009-06-19
Portland, ME

gorehound to DataRiker

Member

to DataRiker
UBB is a piece of shit
PerfectCode
join:2009-06-12
Portland, OR

PerfectCode

Member

...

Bandwidth caps are evil.
chgo_man99
join:2010-01-01
San Jose, CA

chgo_man99

Member

I doubt it would be true UBB

more than likely high UBB overcharge and low caps with a flat rate.

Something like $40 for $50 and punitive $1 per extra gigabyte or so.

Europe, China, Japan, UAE-Dubai (well except china for sure in regards to HSI) have high speed broadband for a low flat-rate fee, higher speed than US, newest infrastructure, high speed magnet rail (suitable for medium range distance), progressive tax rate while we have what?

Well we have three branches of the government:

1) Military
2) Corporations
3) Holywood.
jjeffeory
join:2002-12-04
USA

jjeffeory

Member

Re: I doubt it would be true UBB

Love the three branches comment. It's SO true! LOL
Dampier
Phillip M Dampier
join:2003-03-23
Rochester, NY

Dampier

Member

Two... that's Two Bad Ideas in One

This idea is a disaster waiting to happen. Some truths they will discover if they ever bother to research this:

1) People despise metered billing. They will pay a price premium just to avoid the prospect of an overlimit fee. I guarantee any broadband plan they come up with will be super low speed and feature a ludicrously low usage cap. If Charter was a wireless prepaid service, that might work for business or vacation use on an occasional basis, but not here.

2) Dial up customers are either net neophytes, some of whom are still paying for a dial up provider because they don't know any better, or ultra budget-minded. Many of these customers don't have cable either. Charging anything more than their dial-up provider charges is going to turn them off straight away, and many of them don't know dial-up speed from broadband if you asked. But when they see what overlimit fees Charter cooks up, they'll steer clear. Why risk it?

If cable companies were so unsuccessful pitching their light user tiers, why in the world do they think charging metered Internet is going to be a runaway success.

My suspicion is it's a great way to test out those usage meters and billing systems before dropping this nonsense on all of their customers.

And people wonder why Charter is at the bottom of the ratings for cable companies....

IowaMan
Premium Member
join:2008-08-21
Grinnell, IA

IowaMan

Premium Member

Re: Two... that's Two Bad Ideas in One

Uh.. NO that honer goes to Mediacom...
DPI problems, Caps, Financial Issues etc.

DataRiker
Premium Member
join:2002-05-19
00000

DataRiker to Dampier

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to Dampier
Dampier, just want to say your site is awesome.

battleop
join:2005-09-28
00000

battleop to Dampier

Member

to Dampier
"People despise metered billing" That's why they don't subscribe to such plans by the millions. I agree that most power users despise it but the average user likely does not care as long as the interwebs take them where they want when they "mash" the mouse button.

"Dial up customers are either net neophytes, some of whom are still paying for a dial up provider because they don't know any better, or ultra budget-minded."

I would say don't know better or they don't care. It's a pretty hard thing for most BBR readers to understand that there are a lot of people out there that simply do not care. The don't have the latest hardware and they don't really care if they have 1Mb or 1GB.

Depending what the minimum is it could be a good thing or a bad thing. Around here the best course of action it to assume the worst and exaggerate it as much as possible.

DarkLogix
Texan and Proud
Premium Member
join:2008-10-23
Baytown, TX
kudos:4

DarkLogix

Premium Member

Re: Two... that's Two Bad Ideas in One

theres also the tin foil hat folk that think that having an always on simi-static IP is less secure than a direct dial up link (and the dial up link likely only a software firewall on the computer)

I've met some people like that , that want a new IP everytime they connect and only want 1 computer at a time

battleop
join:2005-09-28
00000

battleop

Member

Re: Two... that's Two Bad Ideas in One

I once had a tin foil hat guy who thought that if he hung up often he would get a new IP and the feds could not track his surfing habits.

So I did him a favor and assigned him a static IP. He was convinced that the feds had something to do with that.

He also used to send me emails every time we would post planned network outages and ask if we were working on stuff related to CALEA. I always replied to that saying I was not allowed to divulge what we were working on.

DarkLogix
Texan and Proud
Premium Member
join:2008-10-23
Baytown, TX
kudos:4

DarkLogix

Premium Member

Re: Two... that's Two Bad Ideas in One

ya theres some real odd things people come up with

one person I know for a long time thought they still needed AOL with a 3G usb card (it took awhile to convince them they didn't need AOL)

David
VIP
join:2002-05-30
Granite City, IL
kudos:102

David to battleop

VIP

to battleop
said by battleop:

I once had a tin foil hat guy who thought that if he hung up often he would get a new IP and the feds could not track his surfing habits.

So I did him a favor and assigned him a static IP. He was convinced that the feds had something to do with that.

He also used to send me emails every time we would post planned network outages and ask if we were working on stuff related to CALEA. I always replied to that saying I was not allowed to divulge what we were working on.

+1 internetz for you today...

you made me laugh out loud and with tears coming out of my eyes. static ip and feds... that is fantastic!

Here I sit, and thought just dns redirection for my wife with facebook one time was good one on april fools.

I bow to your honor.

Cryo
@charter.com

Cryo to battleop

Anon

to battleop
said by battleop:

"People despise metered billing" That's why they don't subscribe to such plans by the millions. I agree that most power users despise it but the average user likely does not care as long as the interwebs take them where they want when they "mash" the mouse button.

Yep, this doesn't sound like something targeted toward 'power users'. I wouldn't consider the option of going on such a metered plan unless I could get the same access speed, with the average cost being a decent amount less than my current fixed rate, but that seems unlikely to happen.

I do think something like this could work fine for low-end users though. If they were offering something like a 1 or 2mb connection for not much more than the cost of dialup, even with a $1 per GB rate it could be considered reasonable for someone who will only use several GB of bandwidth per month, provided the ISP allows users to easily track how much bandwidth they're using.

There are lots of people who have access to broadband, but don't get it anyway, simply because they don't think it's worth paying for. According to a recent study, the number of Americans without access to even low-end broadband is under 10 percent, but over 30 percent of US households don't have it. That means over 20 percent of potential broadband customers don't subscribe. According to the National Telecommunications and Information Administration, who did the study...
quote:
"Overall, the two most commonly cited main reasons for not having broadband Internet access at home are that it is perceived as not needed (46 percent) or too expensive (25 percent),"
This metered plan simply looks like a way to attract those people, along with lower-end DSL customers, where the new plan might offer a competitive alternative for many. We don't even know the details of the plan yet, so it's silly to jump to conclusions. It could potentially prove to be a very good option for such people.
chemaupr
join:2005-06-06
Alexandria, VA

chemaupr

Member

contradictory

no personal privacy on this but unlimited use of money to influence elections because they do have freedom of expression as a corporation.

St Brandon
@charter.com

St Brandon

Anon

wait a minute

So in order to lure a dial up user to their cable internet service they want to implement a UBB parameter? That doesn't sound right. The only people that have dial up that I know of have it because Charter and ATT won't service their area with broadband. Southeast Louisiana to be exact.

If someone does have broadband available and they still use dial-up, then you are going to have to convince them that they need to pay more than $10 per month for service. If I'm not mistaken that is what my grandfather pays Netzero in Enon, Louisiana.
iansltx
join:2007-02-19
Austin, TX
kudos:2

iansltx

Member

Re: wait a minute

So a dialup connection, going full bore for a month straight, would probably only be able to download 13GB in a month. Realistically people will be pushing less than that. So let's say Charter starts up a 1.5M tier with a 10GB cap for $15 to lure dialup users to broadband. Good deal, right?

Or maybe Charter wants to differentiate service below $X per month by cap instead of speed. So 10GB cap at 10/1 (or whatever their speed tier is now) for $20, 30GB for $30, 50GB for $40 and then faster/higher cap tiers go up from there.

St Brandon
@charter.com

St Brandon

Anon

Re: wait a minute

Maybe they should just roll out their services to areas that do not have broadband? That would be a good way to get the dial up users onto their network.

DarkLogix
Texan and Proud
Premium Member
join:2008-10-23
Baytown, TX
kudos:4

DarkLogix

Premium Member

Re: wait a minute

naw thay won't do that it might require investment and actually work
iansltx
join:2007-02-19
Austin, TX
kudos:2

iansltx

Member

Re: wait a minute

800 bucks per home passed is ecpensive..
davidhoffman
Premium Member
join:2009-11-19
Warner Robins, GA
kudos:3

davidhoffman

Premium Member

Re: wait a minute

I have a coworker who lives west of I-75 and east of I-475 near Macon, Georgia. No DSL or cable service to an area loaded with housing. Not rural. Good middle class incomes. Standard suburban distances between houses. So it costs $1000 per house passed. How much revenue have they missed over the past 20 years? Oh well, another Millenicom wireless(Verizon) customer.

88615298
Premium Member
join:2004-07-28
West Tenness

88615298 to iansltx

Premium Member

to iansltx
said by iansltx:

So a dialup connection, going full bore for a month straight, would probably only be able to download 13GB in a month. Realistically people will be pushing less than that. So let's say Charter starts up a 1.5M tier with a 10GB cap for $15 to lure dialup users to broadband. Good deal, right?

Right now they already have a 1 Mbps tier for $20 a month with a 100 GB cap.

IowaMan
Premium Member
join:2008-08-21
Grinnell, IA

IowaMan

Premium Member

Re: wait a minute

Makes Mediacom with its' 3Mb tier for $30 and 250GB cap look good
iansltx
join:2007-02-19
Austin, TX
kudos:2

iansltx to 88615298

Member

to 88615298
20 for how long with what added?

88615298
Premium Member
join:2004-07-28
West Tenness

88615298

Premium Member

Re: wait a minute

said by iansltx:

20 for how long with what added?

That's the regular price. It's not a special. nothing added

msmisfit
join:2004-09-13
Atlanta, GA
kudos:2
ARRIS SB6121
Netgear WNDR3800

msmisfit to 88615298

Member

to 88615298
said by 88615298:

said by iansltx:

So let's say Charter starts up a 1.5M tier with a 10GB cap for $15 to lure dialup users to broadband. Good deal, right?

Right now they already have a 1 Mbps tier for $20 a month with a 100 GB cap.

Here, they have 12/1 Mbps tier for $20 in a 3 month promotion, or so I heard in a radio ad yesterday. I pay $45 for that tier.

ChuckgoCARt
@teksavvy.com

ChuckgoCARt to 88615298

Anon

to 88615298
Here's how user based billing works in Canada. Only charge them 25 dollars a month for a whopping 2 gigabytes (one gigabyte in Quebec and Montreal) then rape them for overuse fees of 2 dollars a gigabyte to a maximum of 60 dollars extra a month plus taxes.
»www.bell.ca/shopping/en_ ··· .details

zpm
join:2009-03-23
Columbus, GA

zpm

Member

Crapchatter = to charter.

thats a waste of time.
KoRnGtL15
Premium Member
join:2007-01-04
Grants Pass, OR
kudos:1

KoRnGtL15

Premium Member

Re: Crapchatter = to charter.

No surprise here. The company is already right back into debt and they will trying anything to keep going. They do this and it will be the final nail in the coffin. And I am not surprised at all with Charter possibly being the first cable provider trying to charge for metered billing.

buzz_4_20
join:2003-09-20
Limestone, ME

buzz_4_20

Member

I guess I Don't Understand

How is Usage Based Billing a Lure?

KrK
Heavy Artillery For The Little Guy
Premium Member
join:2000-01-17
Tulsa, OK

KrK

Premium Member

Re: I guess I Don't Understand

Most likely they are going to over a real low rate monthly but it will have big time gotchas. Cross the line and surprise, you're screwed.

For example, a $10 a month plan, but with say a 5gb cap (or worse) and $5 a GB after that.

ChuckgoCARt
@teksavvy.com

ChuckgoCARt to buzz_4_20

Anon

to buzz_4_20
More like a fishing lure, if you take the bait you're dead meat.

88615298
Premium Member
join:2004-07-28
West Tenness

88615298

Premium Member

Can't wait for U-Verse to get here

Already putting up with 250 GB caps which is fine for now. If they start this crap I'll be gone for sure as soon as U-Verse is available.
Chuck_IV
join:2003-11-18
Connecticut

Chuck_IV

Member

Re: Can't wait for U-Verse to get here

I just got a notice in the mail the other day that U-Verse is finally available in my area. So I finally have an option

The only thing keeping me right now is I get 30mbps thru Charter and the best I can get from U-Verse is 12mbps. The 20mbps is not available to me. So until it is, U-Verse won't be a great option for me.

88615298
Premium Member
join:2004-07-28
West Tenness

88615298

Premium Member

dial-up users

Yeah I know people on dial-up. They don't have dial-up because dit's cheaper they have dial-up because Charter REFUSES to service their areas. How is this going to lure them? If the number of people on dial-up when they have other choices is higher than 20% I'd be shocked. I suspect 80% of dial-up users would LOVE to have another choice.

•••

Ikyuao
join:2007-02-26
Wichita, KS

Ikyuao

Member

UBB thoughts

I thought that UBB was been considered be good idea but I heard that bad news about UBB issues in Canada, Then I decided that to say this I vote NO! to UBB at all because it can be advantage of abusing on UBB as anti-competitive scenarios.

ChuckgoCARt
@teksavvy.com

ChuckgoCARt

Anon

Re: UBB thoughts

Just take a look at this. Two gigabytes a month and two dollars a gigabyte extra. The cost is more if you don't have a Bell bundle. This is the reason a lot of people went back to dial-up from broadband in Canada.
»www.bell.ca/shopping/en_ ··· .details
megarock
join:2001-06-28
Catawissa, MO

megarock

Member

Wow...

I really hate Bell but this would give me all the reason I need ti switch. Even if it's DSL.
chances14
join:2010-03-03
Michigan

chances14

Member

lol

gee i am sure most people with dial up would love to switch to charter. only problem is that most people who have dial up do not have the option to switch to anything else. duh!
Bengie25
join:2010-04-22
Wisconsin Rapids, WI
·Solarus

Bengie25

Member

Can be fine, but won't be

Bandwidth isn't free. If you want a dedicated line, then fork up the $150/month/mbit.

On the flip side, bandwidth in bulk is incredibly cheap. One of the larger Backbone providers sells $1/mbit/month in increments of 10,000mbits. If you can afford the $10k/month and the $50k+ installation fee, then you can get bandwidth on the cheap.

If you assume Charter pays $1/mbit/month and you turn that into data, then 342GB/month costs Charter $1. That assumes you spread it out over a month.

If you're a heavy user and saturate their lines during peak hours, then Charter has to pay more money to maintain a certain level of "quality" during peak hours. If 1% of the users cause 90% of the congestion during peak hours, then it is not fair that 99% of the users have to put up with high pings and lots of jitter because of those select few.

Really, they shouldn't charge based on usage unless it's during peak hours as that's almost the only time a "heavy" user will affect others.

With a large enough network, statistical averages should show up very consistently. They should work with their heavy users and give them tools to help reduce their bandwidth during peak. Off peak hours are almost meaningless because an un-used line costs just as much as a used one.


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