Internet provider to test billing on usage, rather than flat fee

[Olorin]

I think this experiment isn't going to go well. If the company tries to set up the new pricing plan so that they get the same amount of $$ as under the current plan, then there will be a decent percentage of users who have their bills go up.

Many of them will then switch to an alternate, flat fee, provider (especially the really heavy users), meaning that TWC would need to raise the rates on the lighter users who are left--resulting in another wave of switching. Unless this idea catches on and all the major providers switch to pay by use, TWC will lose out (as light users get to pay less, and heavy users go with flat-rate competitors).

[ElfBane]

What REALLY sux is that many counties thruout the US grant exclusive rights (read monopoly) to a cable provider in their county. I am not neccessarily against this practice, if the provider would do something like,,,,YOUR FEE IS BASED ON YOUR USE!!!!!

With NO competition, then the only market drag is government regulation. Pick your poison.

[Larry_OHF]

I am comfortable right now paying $55/mo. to TWC for my 8MB connection. I would be fine with TWC giving a break to people that use the internet alot less than me and lowering their bill, but I will not pay more than my $55 which I think pays for my usage well enough. I could not see any reason why they'd need more than that from me.

[Olorin]

Originally Posted by Larry_OHF I am comfortable right now paying $55/mo. to TWC for my 8MB connection. I would be fine with TWC giving a break to people that use the internet alot less than me and lowering their bill, but I will not pay more than my $55 which I think pays for my usage well enough. I could not see any reason why they'd need more than that from me.

There's the rub--what company is going to keep the prices the same for the heavy users AND lower the prices for everyone else? They are better off keeping the current flat rate instead.

Now if the goal is to get the heavy users to leave to ease the pressure on their system, then a pay by use plan would have exactly that effect (light users bills go down, so they stay, heavy users get charged more, and leave).

[Luvian]

Originally Posted by SpiritWarrior ...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.

They really like spewing that part and it's complete bullshit.

The average high speed user does not use his connection. These people log on to check their emails and visit their blogs. They're paying for something like 4 megs per seconds unlimited high speed access, but they don't use that. So what do the networks do? They resell that connection. Hey, if they can sell that same 4 megs/s line to multiple users, why not?

But gasp! People are actually starting to use their connection and we sold more than we can handle! Let's threaten, overcharge and throttle these "abusers" who dares use what they pay for! We can just point at mom and pop accounts for justification.

Seriously. If they sold you a 4 megs/s line, then you can not abuse, it's impossible. All you can ever do is 4 megs per seconds! Isn't that what they advertised as and you paid for? If five percent of their users can use fifty percent of the network, then maybe they shouldn't have been so greedy and oversold their network.