Thursday, September 20, 2007

Tiered service and the broadband incentive problem

The 'Broadband Incentive Problem' must be among the most vexing for operators. Obviously, usage-based payment is a way out of it, but not easily implemented. People like flat fees and have no clue how much an MB is. Mark Desautels of CTIA recently rephrased the problem and highlighted that the flat-fee business model implies that light users (email and browsing) are in fact subsidising heavy users (downloaders).

This is why I like Comcast's recent plan for a low-tier (sub 1 Mbps) service. At a low price point it will attract even 'nonline' persons - and at the same time provide them with a simple upgrade path, once they start living on the net.
Contrary to this is Hong Kong Broadband Network's plan to end its 'entry-level' 10 Mbps service (on its new FTTH network). HKBN will focus of speeds of 100, 200 and even 1000 Mbps.

Are there no nonliners or light users left in Hong Kong?

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