Here It Comes: Tiered Usage
The Market Ticker ® - Commentary on The Capital Markets
Posted 2012-05-19 14:51
by Karl Denninger
in Technology
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Here It Comes: Tiered Usage
 

Here we go....

Comcast’s plans to do away with its 250 GB data cap and charge users based upon usage marks the end of an era for cable TV providers, and for the online video industry. No longer will users be able to endlessly stream all the content their hearts desire. Not just that, but the fact that usage-based pricing is arriving at the same time that more, higher-quality content is appearing online could have a dampening effect on demand for services like Netflix or Hulu Plus.

Incidentally the same problem exists for cellphone carriers.  The wholesale cost of a gigabyte of cellular data is about $7-10.  Therefore, if you pay $20 and have a 2Gb cap, and actually use it, you're more-or-less neutral to them.  But if you pay $20 and have a 5GB cap and actually use it then those who pay for it and don't use it are subsidizing you.

The differences are much more stark in the home broadband arena.  Most people who are not using streaming video run somewhere between 10 - 30Gb/month, so if you have a 300gb cap and use most of it you're sucking off (in a big way!) your neighbor who is not.

The problem is that as the number of people who "do not" decreases the average use goes up and therefore the service becomes unprofitable.

It's one thing to advertise really big numbers that nobody uses and make it sound great. It's another to actually be able to deliver them.  All of these services are (and always have been) predicated on a certain amount of overselling capacity, but in the broadband world it's been especially nasty in that regard, as at the higher bitrates the implied "possible use" numbers are in geosynchronois orbit, where the modeled assumptions for actual use are at about 100' of elevation.

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User Info Here It Comes: Tiered Usage in forum [Market-Ticker]
Vitchilo
Posts: 4571
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Quote:
The wholesale cost of a gigabite of data is about $7-10.

How much is it for an internet company in a big city with hundreds of thousands/millions of customers?

A few cents?

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Genesis
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Cellular data Vit. And the problem isn't in the INCREMENTAL cost, it's in the sunk cost of providing the switching and transport at the speed x customers.

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Soros
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We've had this here in Ontario for a while, at least with Cogeco cable. I'm paying $60/month for a 175 GB cap ($100 for the 250GB cap) and the overages add up quick, $1 for each GB. I got hit with this a few months ago in an ugly way but now I'm paying very close attention to how much I'm using smiley

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Johnny
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Is there a meter or something a customer can monitor their usage with?
Bagbalm
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So how much are they dropping the fee for low users? HAHAHAHAHAHA
Aveteam
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Fort Collins, Colorado
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Netmeter works pretty well.

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Wis/min
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On the border
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Quote:
Is there a meter or something a customer can monitor their usage with?
There is on Comcast/Xfinity

You can access it from your account page under Users and Settings and can get to the last three months usage as well.

https://login.comcast.net/login?forceAut....
Janedeaux
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Mississippi
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this was recommended to me, but I couldn't boot up after installation. Deleted the program, but it may have been a glitch on my end.

www.softperfect.com/products/networx

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Widgeon
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My ISP keeps track. I had occasion to ask them a couple months ago; roughly 12 GB per month.

Marvinmartian
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Pasadena, CA
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We use Charter for cable TV and a cable modem for internet, and internet voice land line; all in one bundle.

I'm very fed up with them because the cable modem/internet gets very slow at certain times of the day.

I believe its because the party-line nature of the cable modem; too many neighbors are streaming internet digital and dragging down response time for me.

I used to use ATT/DSL before going to a Charter bundle. Would they be any better should I go back to DSL?
Oulous
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interesting. I pay 39 euro for high speed. Fiber conection is 55 eur. All data is unlimited. My cell phone is 20 eur for unlimited data. I looked at the net income for KPN (provider) they make money.

Seems possible numbers are put out there by providers to convince a public they need to pay more.
Krzelune
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I hope they start blocking all the ads. I don't want to be paying for them.

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Ducarius
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This will certainly inspire people to put passwords on wireless household systems. I wonder how it will affect bookstores, libraries and universities that provide free wireless.
Uwe
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Quote:
I hope they start blocking all the ads. I don't want to be paying for them.

Then you need to block them yourself; it is, after all, your computer requesting that data.

Personally, I do not want my ISP deciding what data I get and what I don't (because they're blocking it). That's my decision to make. And yours.

-Uwe-


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Jotapay
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Quote:
Is there a meter or something a customer can monitor their usage with?


Good router firmware will keep track. Tomato firmware does it for me.
Djloche
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right now I do between 40 and 50GB total per month without any HD streams or downloads

300GB is between 30-40 HD quality downloads - I could see with a 'wired in' family of 4, watching on average 1.5+ movies a day total and going over 300GB without a even trying.



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Hescominsoon
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they aren't getting rid of the cap. baseline cap is raised to 300 Gb with overages...they aren't going to byte based billing yet..at leas tnot on residential...yet..:)
Jackl
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Bought a business line because of this crap. Faster speeds and no one gives a **** unless you start using TB a month.

Person on the phone asked why I was canceling phone/Cable.


What do you think mobile phones and the plethora of stream services are for?
Hescominsoon
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for me business reduces speeds..but it also saves me 20/month over residential speeds..:)
16/2 residential goes to 12/2 on business..but saves me 20/month..:)
Elkad
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We are near 200gb every month from Sept to May. Drops off in the summer because there are few TV shows to watch.

Not hard to run it up streaming HD TV and movies on a couple computers.

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Mannfm11
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I have been watching the Lone Ranger on Hulu. Wonder how much that is? TWC is pretty fast here.

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Colk55
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Johnny: As Jota mentioned, if you use a router some of them will show your usage if you know how to navigate to your router settings. I just type in my router's IP address, enter the user name and password and have access to our router's "Traffic Meter" in the control panel.

We have Comcast for broadband and my wife occasionally uses Netflix, Amazon Prime Videos, etc and our usage was just over 44 GB last month, 46 total if you include upstream data. We're on track for around 42 this month, and since our usage is fairly consistent we probably fall into the 40-45 GB per month range. Most of ours is internet use though. She mostly uses the streaming services when our granddaughter or great-nephews are visiting.

Mann, I'll go out on a limb and say maybe one or two hundred megabytes, tops.

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Harrisonact
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Ah this crap surfaces regulary. *******s cry "but it's advertised as unlimited and I want my monies worth" then the "bandwidth hog" mudslinging starts, it reaches a fever pitch and disappears as subscribers of all stripes say **** it and leave in droves. Where they go to? I dunno.

It's as predictable as full moons.

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Peterm99
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Truth in advertising - is that so hard to do?

Tell the people what's "guaranteed" at 99% availability, and tell them the "mean expected" (or something similarly meaningful) but NOT guaranteed number, with expectation values as a function of time of day or something.

Then people have no grounds to complain.

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". . . the Constitution has died, the economy welters in irreversible decline, we have perpetual war, all power lies in the hands of the executive, the police are supreme, and a surveillance beyond Orwell’s imaginings falls into place." - Fred Reed

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