American Cable Association Wants Bandwidth Caps
The American Cable Association said that, like it or not, metered bandwidth Internet pricing is coming, and will be a necessity.
As displeased as internet users are (as in those who actually use the internet) about bandwidth caps, it seems that cable companies on the whole want consumption-based billing policies.
Cable executives who met for the American Cable Association's (ACA) annual summit expressed feelings that metered internet billing would be a part of the business future.
According to Broadcasting & Cable, ACA President Matt Polka said that metered pricing will be a necessity going forward for cable companies as they become broadband companies.
Polka gave that example of his heating bill in Pittsburgh, where he would love to pay the same flat rate all year-round for heating, but instead must pay more during the winter months. With all the network expansion and new internet services such as Netflix streaming, Polka said that cable companies won’t be able to provide service for just $40 per month.
Patrick Knorr, general manager of Sunflower Broadband, which has had bandwidth-based billing for four years now, said that a grandmother who just wants to read e-mail should not have to subsidize the college kid who downloads HD movies to watch later.
Knorr added that metered billing is the only way to manage infrastructure and that charging a flat rate "is not a sustainable business model." Sunflower Broadband currently offers an entry-level 3 GB service tier for $27.95 per month (without video bundle discount). Those who crave the top-level service can get 50 GB for $59.95 (without video bundle discount) per month. Those who go over their quota will be billed at $2.00 per GB, though customers can buy more bandwidth in advance in 15 GB blocks for $10 each.
Sunflower Broadband tries to put its bandwidth caps into perspective using data from more than two years ago. As quoted from its service site: In April 2007, 98.9% of users had less than 40 GBs of bandwidth usage, 86.98% of used less than 10 GBs, 49.46% of used less than 1 GBs of bandwidth usage per month.
Knorr went on to say that, unlike satellite, broadcast, and cable, the internet is not a particularly efficient way to deliver high-res video.
We’re personally of the opinion that the internet is a very efficient way of delivering all sorts of data, video or not. What do you think? Do ISPs have to charge for bandwidth to sustain a business model, or are cable companies just trying to throttle back customers to keep them paying for traditional TV services?
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They're just greedy bastards, and if this goes through in Denmark, I will personally stop using the internet.
Also, if 98.9% of people use less than 40GB per month, isn't this sentence:
"Polka said that cable companies won’t be able to provide service for just $40 per month."
What?! If 98.9% really use less than 40GB per month, and about 50% use less than 1GB per month, doesn't that mean that they're charging too much now and are earning on it, without anyone complaining?
I believe their figures are bogus, and all they want is money. Instead of doing the morally right thing (as in, charging less for a flat rate in these economic times), they want us to spend more on internet bills than heating or electricity overall, and what for? Just so they can earn even more in a time where they're losing money on the economic downspiral.
One would guess that the people that say the cable companies are greedy, they are greedy too. They download 50 gigs a month and want to pay the same price as the person that does 1 gig of Web surfing every month. The morally right thing is that the people that use most of the resource should pay for what they use, rather than passing the costs they generate on to others.
dmartin, the point is, if you are sold a broadband product with UNLIMITED downloads, then thats what you should get, and the ISPs should expect that people will take advantage. I have no problem with packages that include download caps, as long as it is made clear and upfront.
If you went to an "All you can eat" restaurant, and after 3 servings the manager told you that you had eaten too much and that you had to leave/pay more that would p*ss you off wouldn't it?
Let's face it, the business model of most ISPs is to market "Unlimited" broadband and hope that people will pay the full rate but not make use of it.
In Belgium the whole internet service already works like this, 5 euro's for 5GB when u surpassed the either 15GB or 30GB limit(which costs €40 / €60). There are some companies offering unlimited bandwidth but those connections run through the 'rip off' firms and are generally very unstable. So you don't really have an option.