Thursday, January 17, 2008

TWC to trial broadband billing by usage

This looks like an interesting option: Time Warner Cable will trial broadband billing by usage.

That would be the solution to the broadband incentive problem. Only heavy users (estimated at c. 5%, using more than 50% of available bandwidth) would be impacted. It remains to be seen if those heavy users walk away, and if competitors will follow TWC's lead.

However, consumers took up broadband in the first place because of the simplicity of flat-rate billing. Marketing the new message could scare away everybody, not just heavy users who suffer bill shock.

Or could it be be a smart move? Who cares about those 5% - they only cost you money. Other providers will not be eager to allow them onto their networks, so they may grab the opportunity to follow TWC's lead. So, in the end the industry could make the shift to usage-based billing.

1 comment:

none said...

The problem is that this 5% has an "Everyman" aspect: most of the subs at a given time will be part of it.

See about the first R&D into behaviour in an very high speed society: Kenjiro Cho et al.