The Free Ride Is Over For Streaming Video
techcrunch.com
techcrunch.com
I really don't like this argument, on its face it appears to be "fair", but if there's no reason for there to be a difference in cost in the first place it strikes me as a false dilema created for the purpose of raising rates, not fairness.
Everything i've been hearing for 6+ years suggests transfer pricing is going down, not up, and if anything the difference is already being pocketed by the service providers.
I've also heard repeatedly from journalists who have covered this subject before that the goal of cable companies is to keep revenue per subscriber above a specific level, likely amounting to administrative and equipment costs + some average level of upstream data transfer (which again, i've heard is the minor part of the whole breakdown), and of course profit.
In that light, letting individual users drop down below profitability by only using 10GB per month on a usage based plan makes no sense, unless the actual goal is simply to start charging more for what people are already using by calling it excessive, and ride the increases in transfer use as a profit mechanism.
It might help to translate into a different domain. Let's say you're offered the choice between two cell phone plans of equal cost. The first plan has 1,000 minutes, and once you hit 1,000 minutes your phone shuts off and refuses to either send or receive calls. The second plan has 1,250 minutes and an overage charge of $10 per 250 minutes after 1,250. This TC piece is making the argument that the second is worse, because billing you based on how much you talk is a slippery slope that will lead to the elimination of long phone calls, even though the second plan allows you to make more and longer calls if you need to. The problem with that argument is that the phone company is really billing you by how much you talk on both plans, one just gives you fewer options.
I live in Canada and I pay ~$60 for 28mbps and 120GB download cap, which I hit every month. So far I am the only person in the house using high bandwidth apps like Netflix. Usage based billing is not a long term fix for people like me. Instead of increasing the bandwidth caps to competitive rates which smaller ISPs and other countries provide Comcast has decided to charge per bit to future proof their business model dodging the real problem.
High-usage users are a drain on their profits, and they only provide service to us because we'd be a PR disaster if they tossed us and we ended up telling all our friends and family to switch to some other provider. On the other hand, we would obviously prefer much higher or non-existent caps. Comcast is understandably not amenable to that, as it'd require substantial investment in infrastructure improvements for minimal increased revenue. Whatever happens is going to be some kind of compromise, and the one they're proposing makes them additional money while also giving us "power users" an option besides "run into the cap and die".
I don't think that that's a terrible idea. Like you, I'd prefer higher caps for the same price, but the reality of it is just more complex. ISPs are strongly opposed to doing anything that would increase costs or decrease revenues, and customers are strongly opposed to doing anything that would increase prices or decrease quality of service. Something has to give, and in the short term that's going to mean pain for both sides. In the long term, technological progress and the limited (but present) competition between providers will mean that we'll probably end up paying about the same amount for a slowly-increasing amount of service. That means faster connections, higher caps and more options, just not as soon as you or I want them.
Disclaimer: I don't have Comcast cable, but I do have cable service from one of their smaller competitors.
I don't think I am. I am not surprised that Comcast will do whatever it can to increase profits. My problem is with Comcast claiming high bandwidth users are a drain on their system, when there is no evidence to show this, so they can push an unfavourable pricing model on their customers. Again, congestion is a real problem, but charging by the bit does nothing to solve this. This "solution" means they probably won't increase their caps to be more competitive.
Most consumers of online video services (I work at a company that streams video):
* Can easily mistake 480p for 720p and above
* Don't know or care how much bandwidth they are using
* Value content availability
So if Comcast wants to compete, licensing the best content, which can become really, really expensive, is going to be key. Even so, though, production companies may find it most profitable to license to multiple outlets to maximize profits. So even though Comcast owns NBC, it's probably best for NBC's shows to be on Netflix, Hulu, etc.
I think that a successful Comcast app might be a very good thing because ratings measurements will shift from Nielsen ratings (which can undercount certain kinds of shows) to better data (how many and what kind of people really watched the show). Better data means better analysis and targeting, so, for example ads can fund the shows much more effectively - and thus make shows that were previously niche more viable, or shows that were quirky and constantly teetering on cancellation more secure.
Comcast, of course, says that its new, usage-based
pricing policy is pro-consumer