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Wednesday, January 16, 2008

Broadband metering experiment in the works in Texas?
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Well, I'm a bit scared to say this since I will almost certainly incur the wrath of Mike over at TechDirt as well as a host of others who oppose this concept, but I hope there is some truth to the rumor that Time Warner Cable (TWC) is considering a broadband metering experiment down in Texas. (Seriously, go easy on me Mike!)

According to a leaked internal memo posted over on DSL reports:

The introduction of Consumption Based Billing will enable TWC to charge customer based upon usage, impacting only 5% of subscribers who utilize over half of the total network bandwidth. The trial in the Beaumont, TX division will apply to new HSD customer only, will provide a destination for customer to track usage for each month and will enable customers to upgrade from one tier to the next to avoid payment of overage charges. Existing and new subscribers will have tracking capability, however only new subscribers will be charged incrementally for bandwidth usage above the cap. Following the trial, a determination will be made as to whether or not existing subscribers should be charged. Only residential subscribers will be impacted. Trial in Beaumont, TX will begin by Q1.

I don't want to rehash the whole debate about the relative merits of metered bandwidth--for that, see this, this and this (+ all the comments)--rather, I just think it will be interesting to see the results of a small-market experiment. Will consumers revolt against the idea since it runs counter to the "all-you-can-eat" buffet-style pricing we've grown accustomed to? Or will they embrace metering as potential money-saving business model that helps lower monthly bills for light Net users.

Honestly, I have no idea how it will turn out, but I'm all for experimentation with new business models. I have suggested in my past essays that metering might be a good way to more fairly allocate costs across the network while also reducing the need for broadband companies to engage in traffic shaping techniques to conserve bandwidth. I already can hear Mike at TechDirt pounding away at his keyboard to post his next "bandwidth scarcity myth" essay! But even if he is right that current pipes aren't as constrained as some fear, I don't see why it would hurt to allow metering experiments to play out in the marketplace.

Then again, if Mike is wrong, and we see more of a capacity crunch in coming months and years because of growing traffic burdens, then metering might offer a constructive solution. Mike is always talking about the need for companies to consider innovative new business models to complex marketplace challenges. I think metering certainly counts as one. Of course, ongoing network upgrades and expansion is also part of the answer, as Mike and others suggest. But I don't think it's the only part of the answer. Network expansion requires significant ongoing investment and a steady revenue stream to pay for it. So where is that money going to come from? Is it written in stone that the we have some sort of God-given right to flat rate pricing forever more? More importantly, is flat-rate really the fairest way to price access for light users? I appreciate all the old grannies out there who are essentially cross-subsidizing my bandwidth usage every time I download massive HD movies on my Xbox 360, but is that really fair to them?

Damnit.. I said I wasn't going to rehash the entire debate here and I've just gone and done so! Sorry. I eagerly await Mike's "Adam-is-so-full-of-sh*t" response!

[P.S. Just noticed that Cynthia Brumfeld has some good coverage of this over at IP Democracy.]

posted by Adam Thierer @ 10:49 PM | Broadband

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Realistically, paying for the bandwidth that you consume is the only fair way to allocate it. Regardless of the medium of delivery, there is only a finite capacity. If I choose to drive a F-250 4x4 with a 460 cubic inch engine, I better be prepared to pay a lot more for fuel than if I drive a Toyota Prius. Admittedly, the "availability" of bandwidth can be manipulated, and corporate America would often rather lie than tell the truth, even if the truth were to their advantage, but if you piss off enough customers, someone else will provide a better service and/or a better price.

Posted by: Chuck McGuire at January 19, 2008 5:02 PM

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