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What Kind of Alternate Business Models Could ISPs Use?

Zonk posted more than 6 years ago | from the nothing-wrong-with-the-ppu-strategy dept.

Communications 360

esocid writes "After reading multiple stories over the past few months about the practices of ISPs within and outside of the US I have started to actually contemplate the benefits of the pay-per-use broadband service. Monopolistic practices have strangled broadband to the throttled money-draining cesspool that it is today. Would a pay-per-use option, or some other strategy, be better than the flat fee offered by companies today? When you think about it you are paying for an XMbps connection, when in actuality you get an 65-85%XMbps connection that you may or may not use all of the time. In addition to that, speaking as a Comcast customer, you get a throttled connection that limits your usage of certain protocols. Essentially you pay about $60-70 for a connection that you only squeeze maybe $35-45 worth of usage out of it. If a pay-per-usage option were implemented, how do you think the best way to charge for it would be? Is there some other scheme that would deliver customers the kind of QOS and value they seek?"

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first post (1, Offtopic)

shentino (1139071) | more than 6 years ago | (#22932316)

I am myself in favor of a "you only get charged for what you actually get".

I only hope that commercial interests aren't so incentivized to oversell flat-rate fat pipes to refuse to change their model.

Overselling and undercutting is profitable, especially if you're a monopoly.

Re:first post (2, Interesting)

DJ Jones (997846) | more than 6 years ago | (#22932368)

Be careful what you wish for. What about people like me who run remote web servers? What makes you think the ISP's won't charge us an arm and a leg for the extra bandwidth that we use under this new pricing scheme?

A flat rate may be the more economic solution for some of us.

Re:first post (4, Insightful)

Anonymous Coward | more than 6 years ago | (#22932426)

If you're getting charged because you're using more, you're exactly the kind of person that is overusing current resources. Switch ISPs, go to a hosting company, or find another way. You're making the experience less for the rest of us that only moderately use our connection and raising our rates. The low-use users are subsidizing you.

Re:first post (4, Insightful)

calebt3 (1098475) | more than 6 years ago | (#22932526)

No, the low-use users are simply not using all that they paid for, and Comcast takes advantage of that fact.

Re:first post (4, Insightful)

shentino (1139071) | more than 6 years ago | (#22932720)

"No, the low-use users are simply not permitted to use all that they paid for, and Comcast takes advantage of that fact."

Fixed that for you.

Re:first post (4, Interesting)

cayenne8 (626475) | more than 6 years ago | (#22932708)

Heck...it is easy. Just get a business connection and be done with it. I get one from Cox cable, I get static IP, I can run any servers I want to, no blocked ports, no caps, no limits...only about $70/mo. Heck, I even have a low level SLA with them. I only had to do it once, and I called the number, left a message, and in like 3 min, they called me back and started working the issue, and it was fixed in minutes.

Why screw around with all the 'consumer' level stuff and the headaches that go with it?

Re:first post (5, Insightful)

Wavebreak (1256876) | more than 6 years ago | (#22932734)

It's exactly this kind of thinking that the ISPs use to justify filtering p2p and whatnot, and it's completely wrong. You pay for a speed of X, then X is the amount of bandwidth you should be allowed to use. If you're not, that's fine, but doesn't change the fact that those that do are perfectly within their rights to do so. If your ISP doesn't want you to use the bandwidth, they shouldn't be selling it to you. What you use it *for* is irrelevant, they shouldn't even *know* what you do on the interwebs, that's your problem, the RI/MPAA's, and the law enforcement's if it comes to that. Not theirs.

Re:first post (0)

Anonymous Coward | more than 6 years ago | (#22932502)

>What about people like me who run remote web servers?

What about you? If you're doing it for work, it's a business expense: Have your employer pay for it, or, if you are self-employed, write it off as appropriate.

If you're doing it for pleasure, it's the cost of your hobby and why should the rest of us pay for it?

I'm tired of ISPs throttling bandwidth: I'd rather have an open connection, and pay as I go... and I bet a lot of parents would clamp down on their kids' copyright infringement when the first month's bandwidth bill came due.

And that, of course, is why most Slashdotters don't want pay-as-you go pricing: They'd be at the top of the usage list and so would pay accordingly.

Yeah, yeah, I know, seeding all those Linux distros should be free *wink*.

Re:first post (4, Insightful)

shaitand (626655) | more than 6 years ago | (#22932640)

'And that, of course, is why most Slashdotters don't want pay-as-you go pricing: They'd be at the top of the usage list and so would pay accordingly.'

You make it sound as if it is some sort of crime to actually use the connection we pay for. We already pay a fair rate for the bandwidth we use. If you don't want to pay the price of your connection because you fail to fully utilize it you should downgrade.

Re:first post (1)

shentino (1139071) | more than 6 years ago | (#22932642)

A flat rate would be just fine by me as long as companies were *HONEST* about the bandwidth they are selling you.

If you pay a flat rate for unlimited usage, you damn well better not get throttled. If you are being squeezed out of bandwidth that you paid money for, you are getting ripped off, period.

Re:first post (1, Insightful)

ShieldW0lf (601553) | more than 6 years ago | (#22932788)

I personally think internet services are too important to be left to the market, and should be provided by government free of restriction to all people, just like other essential services.

Pay per use just disinclines people to expose themselves to culture and knowledge that they might have investigated out of curiosity but will not pay for sight unseen. This hurts society in profound ways.

The entire "pay per use" mechanism needs to go away forever. We're never going to move from a rationed society to a society of plenty while this meme holds.

But that would mean... (3, Insightful)

deoz (525904) | more than 6 years ago | (#22932376)

that they would charge the current $60-$70 for low bandwidth customers who don't mind the throttling, and those of us who have 2-4 torrents going at a time are gonna pay double, or more; and the only one that wins is the provider. I seriously doubt this would produce cost savings for any consumers.

Re:But that would mean... (4, Interesting)

zappepcs (820751) | more than 6 years ago | (#22932696)

I was going to ask what the hell they were thinking to ask that question. Flat rate is the only way to make the Internet usable. If you go back to the $2/min charging scheme, the use of the Internet will drop to nothing again. The things that makes the Internet useful are:

1 - cheap pc hardware
2 - flat rate ISP charging
3 - net neutrality

If you change the balance of any of these, usage will drop followed shortly by usefulness of the Internet. If say you want to try tiered pricing, ok, take today's bandwidth usage for heavy users, call that standard rate. Add usage weighted tiers to that. Reasoning is this: ISPs are NOT going to downgrade or upgrade infrastructure just to add pricing games. The tier would have to be based on aggregate usage, so you pay current rates up to a standard max. throughput cap, after which you are charged a per/GByte tax. If the tier kicks in too quickly, people will stop using it. Metering must be verifiable, and in the end, no matter what you do it will turn out to be the same mess for billing and sales that wireless phones are now.

If you want to throttle people down on bandwidth and charge them less, go ahead. Some won't care, and will take it quickly. If you want to charge more for bandwidth that you have already sold at a given price... well, good luck with that.

Where the hell are the April Fool's Stories? (1, Funny)

cayenne8 (626475) | more than 6 years ago | (#22932404)

Where the hell are the April Fools Stories?

Has slashdot gone too corporate for April Fools stories now?? Not even one OMG Ponies story??

Geez...I usually look forward to April 1st just to see what kind of stuff shows up on /., but, this year...what happened?

Secret April Fools Joke secrets revealed (2, Insightful)

davidwr (791652) | more than 6 years ago | (#22932480)

CmTaco: We need an April Fools theme for this year.
CbNeal: Let's be subtle. If we don't do anything, the joke's on everyone who likes pink ponies. I hate pink ponies.
CmTaco: Ingenious. I like it.
CbNeal: Bwuahahahahahaha
CmTaco: Bwuahahahahahaha

Re:Where the hell are the April Fool's Stories? (1)

compro01 (777531) | more than 6 years ago | (#22932484)

imo, the best april fools stories are the ones you can't tell are april fools stories.

Re:Where the hell are the April Fool's Stories? (1)

timster (32400) | more than 6 years ago | (#22932568)

Indeed... but I'm not sure that's the plan either. My guess is that when the prank finally hits, it's really going to hurt.

Re:Where the hell are the April Fool's Stories? (1)

Zymergy (803632) | more than 6 years ago | (#22932510)

Agreed... I thought the Rambus lawsuit story was the beginning of the April 1 jokes but it was real... maybe the joke's on all of us?

Re:Where the hell are the April Fool's Stories? (0)

Anonymous Coward | more than 6 years ago | (#22932548)

You look forward to a day of useless posts? I come to Slashdot for technology related discussion. April Fool's Day in the past has effectively stamped out any good discussion for 24+ hours.

When I realized there weren't any idiotic posts this year, I was ecstatic.

Re:Where the hell are the April Fool's Stories? (1)

cayenne8 (626475) | more than 6 years ago | (#22932746)

"You look forward to a day of useless posts? I come to Slashdot for technology related discussion. April Fool's Day in the past has effectively stamped out any good discussion for 24+ hours. When I realized there weren't any idiotic posts this year, I was ecstatic."

I guess there are still plenty of killjoys out there with no sense of humor.

Re:Where the hell are the April Fool's Stories? (1)

Kelbear (870538) | more than 6 years ago | (#22932634)

I'm not a big fan of them. I don't read slashdot for the articles, just the comments. I remember last year's April Fools as blatant jokes that just resulted in a "har, har, april fools." And then nothing more to see and nothing to comment on, so I had no material to read for that day.

Re:Where the hell are the April Fool's Stories? (1)

Workaphobia (931620) | more than 6 years ago | (#22932784)

I strongly suspect that, as the guy above me said, the joke is that they're totally ignoring today. But still, we had a fake story yesterday that irresponsibly came across as serious in the summary (DX11, ray tracing).

Re:first post (5, Funny)

spun (1352) | more than 6 years ago | (#22932486)

Well I think ISPs should use the "Turn them upside down, shake them, and keep whatever falls out of their pockets" business model. Because I don't wear pants.

Re:first post (1)

calebt3 (1098475) | more than 6 years ago | (#22932586)

There are still the contents of you pocket protector to consider.

Re:first post (1)

truthsearch (249536) | more than 6 years ago | (#22932622)

If he doesn't wear pants what makes you think he wears a shirt?

Re:first post (2, Interesting)

sm62704 (957197) | more than 6 years ago | (#22932592)

I prefer flat rate. Considering that the cell phone companies are now offering flat rate pricing like the old wired telcos did, I think I'm in the majority here.

I want to know how much my bill is going to be, and I don't want to have to meter myself. I don't want to have to ask "can I afford to log into slashdot today? Can I afford to download that new distro today?"

And I don't see how "pay per view" is going to stop the ISPs from throttling; if their pipes get full they're going to turn your data flow down to keep someone else from getting completely locked out; perhaps someone else that's even more lucrative than you.

Such a great deal. (5, Informative)

Spazmania (174582) | more than 6 years ago | (#22932686)

I am myself in favor of a "you only get charged for what you actually get".

High-end commercial bandwidth is sold on a 95th percentile basis. The way it works is this: every 5 minutes they measure how many bits you sent and received in the preceeding 5 minutes. At the end of the month they throw the top 5% of the samples away. The next highest sample is your 95th percentile usage.

Are you still in favor of that payment model if I tell you that commercial bandwidth today costs between $20/megabit and $300/megabit with the average price around $100/megabit? In other words, you can have your 15-meg FiOS line, but if you nail it at 15 megs for more than 36 hours in a month, you'd pay $1500.

Still sound like such a good deal?

"Pay for what you get" - I agree (2, Interesting)

Nerdposeur (910128) | more than 6 years ago | (#22932750)

In general, it seems like the point of "package deals" is to screw the customer. If I buy X amount of bandwidth or cell phone minutes per month and don't use them all, I wasted money. If I use any more than that, they charge me a hefty premium.

On the other hand, consumers should see "unlimited" as a good thing only if they expect to use more than the average person, whose usage the price reflects. If I think I will eat $15 worth of food and the buffet costs $10, it's a good deal for me.

In short: "pay for what you use" is obviously fair. Package deals are an attempt to screw the customer; "unlimited" deals are an attempt to screw the provider. (Who, of course, has already calculated the average use and determined that the house will win.)

You see... this would be awesome! (1)

Kjuib (584451) | more than 6 years ago | (#22932320)

Then I could pay $500 and get $500 worth of bandwidth! w00t!

Remember... it is not your bandwidth.. you are just renting it... so you cannot do with it as you choose...

Not really the point... (5, Insightful)

TripMaster Monkey (862126) | more than 6 years ago | (#22932326)

I'm sure there are several alternate business models that ISps could employ that would result in fairer, more even-handed access and pricing.

However, this is not in the ISPs best interests. The ISPs interests are best served by the current business model...the promise-you-x-amount-of-bandwidth-but-give-you-only-0.4x business model.

Don't expect change anytime soon.

Re:Not really the point... (1)

Jeff DeMaagd (2015) | more than 6 years ago | (#22932482)

Effectively, what you're really paying for is maintaining the physical & electrical link, the hardware on both ends, though of course, the marketing, executive limo, and all that is in there too. The numbers I've seen in the papers in terms of data cost are pretty low, I recall seeing a number something like it's about $2.50 per household on average. So I really don't see how things will change a lot if people were charged a lower base fee plus the bandwidth you use. Another reason the pricing is unlikely to change is that there's minimal competition.

Re:Not really the point... (0)

Anonymous Coward | more than 6 years ago | (#22932504)

Well, we could have someone new in the White House come early next year. That person, whoever he or she may be, would be able to direct the DOJ to actually enforce the laws related to false advertising, etc, that corporations flout right about now. Also, the federal legislature is likely to change enough that legislation to actually make broadband markets competitive (rather than monopolistic) and be available to every house (instead of one per a zip code) could pass to some degree. I know, I know. Don't get your hopes up. But I can dream.

Re:Not really the point... (1)

businessnerd (1009815) | more than 6 years ago | (#22932736)

Actually, I think a pay for what you use model could work in everybody's favor. What if you charged on a per bit basis just like the electric or gas company? That means the people who do casual web surfing and e-mail will pay very little and will use less bandwidth and the people who do heavy gaming, bittorrent downloads and the like that use lots of bandwidth, pay more. The amount of money a heavy user can spend on internet is limited by the bandwidth. If it's slow, they can only download so much. This is an incentive for the ISP (which may be a monopoly) to increase the available bandwidth. More bandwidth, more bits/month getting to the user, the more money the user pays to the ISP. Of course, you'd have to crunch the numbers on how many people are being screwed vs. being capped by the current model and see if there are enough bandwidth thirsty people out there to make the switch beneficial.

Re:Not really the point... (1)

Kuma-chang (1035190) | more than 6 years ago | (#22932766)

Precisely. This question is irrelevant (and more that a little bit silly). Unless you manage to pry open the last mile and subject ISPs to actual competition, it doesn't matter what particular billing format they use. They're not going to give you what you want. It would just be a different flavor of getting reamed up the ass.

who cares about business models? (5, Funny)

jollyreaper (513215) | more than 6 years ago | (#22932330)

I want to know where the April Fools articles are. So far, everything is boringly normal. Give me some funny shit! Microsoft debugs Vista, "Best Windows yet!" crows Richard Stallman. Bush finds exit strategy for Iraq. Catholic priest shoves fingers up own ass for a change.

Where's the A material? Even Poniez is looking good at this point.

Re:who cares about business models? (1)

cashman73 (855518) | more than 6 years ago | (#22932366)

Yeah,... where is the OMG PONIES!!!!!!!1

Re:who cares about business models? (4, Insightful)

nacturation (646836) | more than 6 years ago | (#22932414)

Compared to the insanity of last year, having an all-normal day would be one hell of an April Fool's.
 

Re:who cares about business models? (4, Insightful)

jollyreaper (513215) | more than 6 years ago | (#22932612)

Compared to the insanity of last year, having an all-normal day would be one hell of an April Fool's.
 
But I'm ready for it now! This is like watching what's supposed to be a horror movie, you're all ready for the jump-scare, the woman is walking around in a dark house in her panties looking in all the creepiest rooms, opening cabinets, peeking behind shower curtains, and nothing! Not even a cat jumping and screeching from some impossible location no cat should be in.

Finally I'm ready to not get suckered on April Fools and they sucker me by canceling it. Bastards.

Re:who cares about business models? (1)

techpawn (969834) | more than 6 years ago | (#22932712)

Like my prank this year:
Got a cake, wrote "Happy April fools day! Enjoy the Cake!" on it. No one's touched it yet... BTW, nothing wrong with it

Re:who cares about business models? (1)

fbjon (692006) | more than 6 years ago | (#22932540)

There's no pleasing some people....

Re:who cares about business models? (4, Funny)

hey! (33014) | more than 6 years ago | (#22932636)

OK, how about this for an idea:

Hooters founder Robert Brooks has started a new business: providing Internet services.

Jack-In Broadband [sm] will provide broadband installation and support services, with a twist. All installations will be performed by female technicians wearing brightly colored plastic miniskirts and crop-tops. On-line tech support will also be provided by "Jack-In Girls", via real time two way video link.

Women's rights groups are criticizing the planned service. "This is demeaning to women in technology," said Maria
Testicolo-Lattine, the Florida director for the National Organization for Women. "Not only are they being valued for their bodies over their skills, they are being paid only minimum wage."

A corporate spokesman for the company confirmed that the technicians would only be paid minimum wage, and would have to buy their own uniforms, tools and vehicle, however he denied that they were being exploited. "These girls will make plenty of dough, through gratuities and, uh, little side services they provide our customers." The spokesman asked that his name be withheld. [Ed. -- editorial policy does not allow for corporate PR officers to be quoted anonymously. The spokesman quoted was Anthony Testicolo, from the company's Miami office.]

The service is slated to begin in the Clearwater, Florida market, expanding to eight metropolitan areas in the southern US over the next two years. There are no plans to market the installation service in the north, due to the impracticality of the technicians' uniforms in that climate, although negotiations are under way to offer the on-line support services through cooperative agreements with several national ISPs.

Re:who cares about business models? (1)

Animaether (411575) | more than 6 years ago | (#22932660)

my guess is that either...
A. The joke is that there are no jokes, and the joke's on us for debating on every story whether it is a joke or not
or
B. The joke is all the Anastasia 'Russian bride' dating service ads all of a sudden (given the large number of AdBlock users, that joke would be lost on most).

If the latter is not a joke, then I do fear Slashdot's new ad policy :>

Split Solution (3, Interesting)

CheeseburgerBrown (553703) | more than 6 years ago | (#22932334)

I think that even in a pay-as-you-go type solution, a certain base threshold of traffic would have to be free, and the customer would pay on top of that. Otherwise, the user is penalized for visiting a site that rams heavy multimedia ads down their throats or for downloading spam to be filtered.

Another idea may be a price ramp: if I usually only use 5% of my connection, the cost for a spike in my usage should be low. Similarly, if I'm a heavy user than my spikes (higher, more frequent) would carry a heftier price tag. In other words, occasional spikes should be discounted while habitually heavy users would have to pay more to accommodate their persistent digital lifestyles.

Finally, I would only consider such a scheme if my account were discounted for every second of downtime during each billing cycle, whether it affected me directly or not. If have to pay for what I use, they have to pay for what they don't deliver.

Re:Split Solution (1)

DriedClexler (814907) | more than 6 years ago | (#22932446)

Hm, you know ... that's a fair point. Use a ton? Pay more. Have light usage habits? Then by golly, you should be paying less. Makes perfect sense.

JUST DON'T YOU FUCKING DARE EVER THINK OF APPLYING THIS EXACT SAME LOGIC TO HEALTH CARE COSTS BETWEEN THE YOUNG AND OLD

Re:Split Solution (1)

flanksteak (69032) | more than 6 years ago | (#22932474)

But we already do. Health insurance for the young is cheaper than health insurance for the old.

Re:Split Solution (1)

DriedClexler (814907) | more than 6 years ago | (#22932552)

I said HEALTH CARE costs, not insurance costs.

How much of those Medicare revenues go to the young?

Re:Split Solution (1)

flanksteak (69032) | more than 6 years ago | (#22932616)

Insurance costs reflect health care costs, or are you not participating in economics this week? Medicare revenues go to poor young people who can't afford their bills, but there aren't as many kids visiting doctors as the old. The young pay for the old. It's been that way for a long time, and it makes sense when the population is growing. It becomes a problem after the boom, like we're going to see in the next few years.

Re:Split Solution (1)

shaitand (626655) | more than 6 years ago | (#22932688)

Forget downtime, I want a proportional discount depending on the actual available bandwidth versus the rate I am paying for. If my connection speed is currently 80% of what i paid for, I want a 20% discount off my bill (which had best no longer include a base monthly charge).

Why go back to rental? (1)

Millennium (2451) | more than 6 years ago | (#22932342)

Having lived through the bad old days when pay-per-use was still popular with ISPs, I'm forced to say no way. It's great for the ISPs, I'm sure, as they can arbitrarily set the "value" of a certain amount of bandwidth completely ex recto and hold everyone to that. For consumers, however, it's terrible; they invariably end up paying more for inferior service plus the fear of using more bandwidth and having to pay more.

Re:Why go back to rental? (1)

conlaw (983784) | more than 6 years ago | (#22932500)

Yes, I started out on AOL in days when it was the only option where I lived. As I recall, you could pay something like $9.95 for five hours per month, but then you paid 25 or 30 cents for every minute you went over the five hours. It only took most of us one month of overage charges to decide that the $19.95 "unlimited" plan was much better.

per-usage isn't problem, excessive pricing is (1)

davidwr (791652) | more than 6 years ago | (#22932656)

Charging $X/TB isn't the problem. Charging $X/TB where it would drive a significant number of people to pay more than they do now OR make a significant number of people skittish about using the Internet is the problem.

It's the same problem cell phones and long distance had before it dropped to under a dime a minute in 2008 dollars. Now very few people pay more than 7c for each incremental minute of long distance and very few pay less than 10c for each incremental minute of cell time. Most people pay a flat rate that gives them either unlimited or a high-enough number of minutes and either they don't use overages or they don't pay a lot for them. If they do find themselves paying a lot, they change their plan.

Create price plans where 90% of today's users can get the same service they have now at the same or lower price and price the overages "fairly" so someone who uses twice the limit pays no more than twice the base rate and the ISPs and most customers should be happy. Those users who use 1000% of the 90th-percentile-based usage limit will wind up paying a whole lot or they will choose to do without, in either case, it should improve both the ISPs bottom line and their ability to service the rest of their customers.

$/MB (4, Informative)

fred fleenblat (463628) | more than 6 years ago | (#22932356)

in terms of $ per megabyte broadband is the best deal going. taking into account the throttling and limited upstream pipes...it's still a screaming deal. go price T1's, or try to live with satellite broadband, dialup, or 3G. all these alternatives have profound limitations.

What customers want. (1)

jellomizer (103300) | more than 6 years ago | (#22932382)

What customers want is Pay for what you use until you reach a point and you pay fixed price.

People want to be reworded for using less and not punished for using more. So if you have a Fixed Price internet Raise it up only a small amount a few dollars a month and set the point so 80% of the customers are paying less or equal per month and 20% are paying the same and perhaps a bit more, but not so much that it will put a shock to their budgets.

Re:What customers want. (1)

sm62704 (957197) | more than 6 years ago | (#22932674)

If you have actually done scientific surveys show us the research. Otherwise it's just bullshit and the only customer who you know what he wants is you.

I want flat rate. But then again I'm the only customer that matters to me.

how about "focus on quality not market cap" (1)

poetmatt (793785) | more than 6 years ago | (#22932394)

I think the subject line speaks for itself. If any of them was actually making a superior product consumers would flock in a heartbeat.

How about invest in infrastructure to help your long term business increase? Spend a little more to make something better to get an exponential benefit out of it in the long run. I seem to remember somewhere saying that to retain 10% more of your current customers will be more profitable than adding 25% new customers due to all the additional managerial and other costs involved (and ripple effect).

I of course, could be wrong, but this seems to be the simplest thing. If someone offered symmetrical 30down/up with no filtering across the US right now for consumers, I think they would have more people sign up than I can conceive!

Re:how about "focus on quality not market cap" (1)

Monty845 (739787) | more than 6 years ago | (#22932494)

If only there was a company rolling out fiber in US cities... If only they provided more bandwidth at the same cost as cable... If only they provided the bandwidth they advertised If only they didn't throttle Well, thats my experiance with FIOS... I pay for 20/5, I get 20/5... I don't see what the problem is... just move someplace where you can get it, and pray verizon doesn't change to be more like comcrap

Re:how about "focus on quality not market cap" (1)

shaitand (626655) | more than 6 years ago | (#22932732)

Of course they will. They all start out great to build a customer base and then change to an inferior quality of service.

Re:how about "focus on quality not market cap" (1)

mobby_6kl (668092) | more than 6 years ago | (#22932738)

Retaining current customers is, indeed, in most cases cheaper than gainng new ones, but that doesn't necesserily justify blowing billions on infrastructure just so that grandma can forward lolcats faster.

Basically, why not bundle (OMG) ponies for free with each broadband subscription too? Sounds great to me!

I doubt it would work (1)

fataugie (89032) | more than 6 years ago | (#22932396)

I bet for every 1 person that realizes a lower bill, 5 will have an increase. The reason? The idea sounds good now assuming the variables will remain static....they won't.

As soon as a change is made, the laws of eqaulibrium will kick in and what is sure to happen is the ISP's will adjust their pricing to either maintain (or probably increase) their take.

That won't happen if people start paying less.

How about we try... (1)

mckinnsb (984522) | more than 6 years ago | (#22932402)

Not throttling the internet connection?

It's a huge heap of BS to do this, especially when some people pay for high-bandwidth file services. I understand saying "We can't guarantee that the internet connection will always be this fast" for technical reasons, but purposely slowing down traffic for cross-industrial reasons (concerns over the file sharing of media/mp3s leading to the throttling of all file transfers) *should* be illegal.

Pay-for-use internet subscriber models don't make much sense: eventually, it will cause people to use the internet less , and thus will make the companies less money, because it will have a collective effect as the internet community dissipates because one of the biggest draws of the internet is the interconnected user-base. Less people on the internet = less blogs, fewer reasons to have news sites on the internet, fewer reasons to have forums, fewer reasons for social networking sites and advertising, fewer reasons to participate in multi player gaming, etc. This is why AOL switched over from minutes to unlimited - to ramp up the connected userbase.

Pay as you go (4, Insightful)

jockeys (753885) | more than 6 years ago | (#22932410)

honestly, internet access is very nearly a commodity, why not bill it as such?

Assuming all my ports are equal, and I can xfer upstream and down at whatever the physical rate of the device is:
bill me by the megabit-hour. Just like txu bills me by the kWatt-hour. I can use whatever I want, but pay accordingly.

Alternately, bill me at the end of the month for gigs xferred, which is already done for hosting in some cases.

Re:Pay as you go (1)

DarthPlagueisTheWiz (1244790) | more than 6 years ago | (#22932522)

A lot of times my roommate leaves his bittorrent client running all night because, who cares? I think its a bad idea.

Re:Pay as you go (1)

flanksteak (69032) | more than 6 years ago | (#22932560)

Agreed. One problem with pricing is one-or-two-size fits all method. What I use and what my mother uses are two different things. She'd be fine with a 256k down/56k up. All she wants to do is email some pictures and surf a few web sites. I'm the one sucking down linux isos. Pricing by usage should be the norm. Have plans that charge a small amount per mb ($0.001 or something like that), that then max out at a certain level (the unlimited price). Maybe you could charge 0.0001 per mb down and 0.001 per mb up, since most of us /. readers who are going to be clogging our neighborhood lines are going to be running servers. But as one poster below has noted (hey, this new posting inline thing is cool!), telcos would probably drool over and abuse anything metered. Where are the honest brokers?

Re:Pay as you go (1)

shaitand (626655) | more than 6 years ago | (#22932778)

The net result of that scheme is that heavy users would pay the same and low usage customers would pay less. The means an overall cost reduction for the customer and a profit loss for the ISP.

This is really about one of two things. Either people just want to pay less for internet access. Or this is about people who don't utilize their connection getting annoyed that those who do so are getting more value than they are.

As for those who want unrestricted access, how about switching ISPs? Its not a perfect world, the company offering the cheapest bandwidth may not be the best choice for your needs.

No thanks! (1)

CatoNine (638960) | more than 6 years ago | (#22932412)

The current business model is just fine for customers like myself.
I get X amount of peak capacity, which I use fully a few times a day.
De price of X is low, because I'm expected to make 'fair use' of the service
and not fully use up X.
*Much* to be preferred to a more expensive and smaller X.

Plenty of case studies... (4, Interesting)

JustinOpinion (1246824) | more than 6 years ago | (#22932422)

This question is not nearly as theoretical as the question suggests: there are many countries where various forms of metered or tiered access are the norm. You just have to look at what these countries offer (and how consumers react) to get an idea of what works and what doesn't.

Here's an example: Videotron cable internet [videotron.com] (Montreal, Canada)*. They have packages that run from $30/month to $80/month, depending what you want. They all have usage limits (2 GB/month to 100 GB/month), and charge a fee per additional GB beyond this basic usage.**

Does it "work"? Of course. Customers buy the package they want. If they are routinely going over their monthly limit, they either cut back on usage or upgrade their package. Yes, it is slightly more complicated for the customer than just having a single "unlimited!" package, but then again it's also more honest. In fact the unlimited packages have hidden terms and limits, which makes them more complicated... or at least more annoying.

I'm a heavy internet user (as most Slashdotters probably are). I don't mind paying a premium to get the speeds and usage limits I need: as long as that service level is actually delivered! This isn't rocket science: just provide a variety of packages and let the customers pick. Importantly, price the packages so that you won't go out of business if a sizeable percent of your customers actually use the service you sold them.

[*] Note that I was a Videotron customer when I lived in Montreal. I'm not endorsing their service; merely using them as an example.
[**] Note also that if you really want unlimited usage, you can upgrade to business class service [videotron.com] . Again, you pay a premium if you want that level of service, which is fine.

Pay in $10 usage increments, + enhanced services (1)

davidwr (791652) | more than 6 years ago | (#22932430)

I'd go for a $10-increment model with rollover and customer-defined usage caps.

For $10 you get X GB at Y Mb/sec, where X is higher if Y is lower.

You set your own usage cap.

After you reach the cap, you get throttled back to dialup speed until you raise your cap or the month is over.

Heck, if it were prepaid you wouldn't even have to worry about the end of the month.

To make additional money, ISPs could sell you "speed boost" where you could buy an hour or a day at the maximum speed your wire will allow. They could also sell enhanced services like web-site consulting, parental-controls, business-account services, and the like.

Whatever they charge, it would have to be as cheap or cheaper than today's services for all but the top-10%-usage customers or people would rebel.

Re:Pay in $10 usage increments, + enhanced service (2, Interesting)

Shados (741919) | more than 6 years ago | (#22932598)

My ISP does partly that right now (I'm not in the US though). I pay something like 35$ a month, I get 20 gigs at 7mb, with an explicit warning that since its a shared cable, during peek hour I may go down. When it is not peek hour, I cap out my 7mb if the place I'm connected to can output it (which obviously makes sense), during peek hour the worse I've seen (from a reliable server... let say downloading something from java.sun.com) its like 350kbyte/s. If I go over my 20 gig, like 1 cents per megabyte.).

If thats not good enough, they have other plans that go as high as 100 gigs per month or more speed as high as 50 megabit/s (the upload speed is shit on that one though!).

If I think my current speed isn't fast enough, I can up my service to the next step up in speed for 48 hours for 3 to 5$, depending on the difference between the services (to up my 7mb to a 10mb its 3$ for 48 hours).

Its definately not perfect, and that ISP has its own problems with throttling and such, but its still a start in term of flexibility, and its much easier for the ISP to deliver this than something rediculous like "UNLIMITED DOWNLOAD AT 20MB speeds, all the time!". Its definately more honest, at least, and considering the reliability of my connection, they obviously CAN deliver.

$15 to start +$10/GB transferred? (1)

davidwr (791652) | more than 6 years ago | (#22932762)

That's quite high. I've heard of prices that high in Australia and other relatively-expensive-to-reach locations but not in Europe or the USA.

Now, if you were talking $15 + $10/10GB with the same $35 minimum, that would make more sense. In a few years as capacity grows, the pricing should be $15 + $10 per 100GB.

I assume you are using US dollars.

wrong direction (0)

Anonymous Coward | more than 6 years ago | (#22932432)

Not only should base charge be fixed (bandwidth is extra), ISPs should share revenue with
web sites providing the actual content.

The only sensible "par-per-use" charge should be the energy/electricity usage of the
packets + small percentage charge.

Re:wrong direction (1)

sm62704 (957197) | more than 6 years ago | (#22932704)

ISPs should share revenue with web sites providing the actual content.

You have GOT to be kidding! You think your ISP should pay me for my dreck when you read it? Should pay a newspaper for their ad-filled dreck? What's the word I'm looking for? [wikipedia.org]

Is this a serious question? (5, Insightful)

carnivorouscow (1255116) | more than 6 years ago | (#22932438)

I know I'm risking what little karma I have as a new poster but this question seems bizarre. Throttled connection speed is primarily a US problem and has a lot to do with the telecoms not keeping their promise to Congress to create a fiber optic network across the nation. Now they're reaping what they've sown and are trying to create an excuse to pass the buck to their customers rather than fulfilling their obligations.

I could see a tiered system for connection speed that billed based on KB transfered being reasonable if the telecoms were doing everything in their power to meet increasing capacity demands but they're not.

Summary is not quite right (2, Insightful)

NeutronCowboy (896098) | more than 6 years ago | (#22932440)

Essentially you pay about $60-70 for a connection that you only squeeze maybe $35-45 worth of usage out of it./blockquote.
From my understanding, you actually pay $60 for a connection that ought to cost you about $600. For what real usage costs, compare the home pricing with business pricing. Speakeasy offers symmetric T1 for $400. That gets you 1.5 Mbit both ways. Get a home connection, and they charge you $50 for a basic DSL connection of 1.5 Mbit down, 384Kbit up. And that's if your connection is good and noise free.

This idea that the actual cost of a connection is $60 is ludicrous. Yes, companies played a dangerous numbers game that didn't account for all the new ways that end users can saturate connections, and they're trying to play catch-up now through questionable methods. But some end-users are also using far more than what they're paying for.

That said, this is no excuse for the sorry state that broadband is in. Monopolies (or, at best, duopolies) are killing the American broadband market. My connection has stagnated at 1.5Mbit (actually ~800 Kbit due to line noise) for the last 8 years, with prices regularly going up for unfettered access. When looking at how connections improved in the rest of the world, I can only believe that a complete lack of market forces could lead to this stagnation.

Re:Summary is not quite right (1)

BoogeyOfTheMan (1256002) | more than 6 years ago | (#22932792)

But for that $400 T1, you get business class service as well. You are paying for competent techs, quick problem resolution and minimum service level garauntees. Not overall speed.

The home comsumer only pays $60 because we get to talk to non english speakers when we have a problem. We get to wait a week for a truck roll. If our DSL says its 6/768 but we only get 3/256, oh well. But, we dont have to pay an arm and a leg.

You want metered data usage? (0)

Anonymous Coward | more than 6 years ago | (#22932452)

From the same telcos who charge $0.15 for a single 160-character-or-less text message, if you don't have a messaging plan?

And you expect their rates to be reasonable or palatable? Their whole M.O. is to outrageously price ala-carte stuff to drive you into a plan.

Please tell me this is an "April Fool" Ask Slashdot.

Re:You want metered data usage? (1)

compro01 (777531) | more than 6 years ago | (#22932558)

Please tell me this is an "April Fool" Ask Slashdot.
i doubt it. it was in the firehose yesterday.

Deliver Promises. (3, Insightful)

headkase (533448) | more than 6 years ago | (#22932460)

How about they give you what they promise, set their price against what they actually think it costs and let competition work its magic. Promising what they don't deliver fscks up Adam Smith's invisible hand.

Re:Deliver Promises. (1)

darkfnord23 (696608) | more than 6 years ago | (#22932770)

Excuse me? Invisible hand? This is a monopoly. I'm not allowed to just start a huge company and set up copper wires spanning the country to sell broadband. The free market has nothing to do whatever with crony capitalist systems like the U.S. telecommunications industry.

Value (1)

calebt3 (1098475) | more than 6 years ago | (#22932492)

you only squeeze maybe $35-45 worth of usage out of it.
Comcast probably feels that you are already squeezing ~$100 value from it.

ISP can't say one thing and deliver another (2, Insightful)

gnasby (264673) | more than 6 years ago | (#22932528)

The crux of the problem is that if an ISP says they are providing a "3MiB/s-down with 300kb/s-up" connection, that is what they should be delivering. You can't sell something as one thing and then not deliver it - this is called fraud.

If they can't deliver at the speed they sell it as, then they shouldn't be allowed sell it as the higher speed.

The fact is that they want to be able to promise one thing and then reneg on the delivering the goods. Why do we let them get away with this?

Graham

Wrong question (1)

iminplaya (723125) | more than 6 years ago | (#22932550)

We should be asking what alternative methods of connecting to the internet that bypasses the ISP can WE use.

Solution: (0)

Anonymous Coward | more than 6 years ago | (#22932566)

A reasonable bitcap with a fair price for exceeding it. I'm paying 70cnd/mo for Cogeco cable highspeed pro with 1mbit up, 16 down, with a soft 100gig/mo cap. My service was suspended for 24 hrs (after multiple warnings for exceeding the cap by 44%) last month so I phoned and asked if I could pay for more but they didn't want my money.

Taxes (4, Informative)

ahfoo (223186) | more than 6 years ago | (#22932570)

There's your business model.

I'm dead serious. Telecoms is a "natural monopoly". (http://en.wikipedia.org/wiki/Natural_monopoly) A monopoly is not something you build a business around, it's something you regulate. Thus, it is best funded by a regulatory regime AKA, a government.

And, for the practical example. I'm in Taiwan where the telecom is state owned. I am using the state owned telecom DSL service at 8M/640K for about thirty bucks a month although we just got a slight reduction in fees this month. Yeah, imagine that, a reduction. We have no throttling and the service, which I've had for about five years at that level is excellent.

Sure, there's a monthly fee for use, but the service is provided by a government monopoly which is obviously derivative of taxes.

Put this in perspective of the Company (1)

Salgat (1098063) | more than 6 years ago | (#22932576)

The only way any company will follow this is if they make at least the same amount of profit that they did before. Now tell me, if they need to make the same amount of money as before, and all these people who barely use their internet are paying so little for it, who do you think will be paying the rest of that needed profit? The only thing that comes from this is rediculous bills for high bandwidth users and small costs for your average e-mail and website user.

Re:Put this in perspective of the Company (1)

shentino (1139071) | more than 6 years ago | (#22932666)

Which is exactly how it SHOULD be.

If you're going to be doing craploads of torrents and downloading honking huge files, you're going to saturate the network and leave less room for everyone else.

Bandwidth is a scarce resource and should be treated as such.

Re:Put this in perspective of the Company (1)

Salgat (1098063) | more than 6 years ago | (#22932768)

I never said it wasn't fair, just that it won't be helping your average slashdotter.

Dual-tiered (2, Interesting)

Tyler Eaves (344284) | more than 6 years ago | (#22932578)

Have a two level plan. Users would pay for however many gigabytes of high speed service at the wanted, which would be ultra-fast, 10Mbit at least, preferably higher.

They'd also have access to a baseline service in unlimited amount, but highly throttled...512Kbit say. Plenty useable for basic stuff, even MMOs and the like, but not for mass pirating. The user could toggle between the modes so as not to waste high-speed bandwidth checking e-mail or whatever.

What makes you think you're only getting $35 worth (3, Interesting)

Overzeetop (214511) | more than 6 years ago | (#22932596)

The issue is primarily one of convenience and plant cost. To get you 10Mb/s is mostly capital costs, so you pay a fixed rate. Overselling is done because average users don't saturate their channels. Businesses, otoh, do and they pay for the luxury. Pay per bit service would be difficult to structure without a fixed cost. Once you cover billing, tech support, and plant, you're up to nearly what everyone is already paying. Adding per-bit charges will only make it more expensive. Sure, you can pay more for a guarantee but the value of that guarantee is far less to the consumer than to the operator. And if you put your guaranteeds on the same line as your basic oversold, you're going to have to actively sort them out.

BTW - how much data does $35 buy you? Maybe you're getting $100 worth of data for the $70 you pay Comcast, and you just don't realize it. I would venture to guess that if you divided the entire data stream by the revenue, most slashdotters are getting more bits per dollar than the overall system average. Even if you just camp on the throttled ports, you may still be getting more bits than a dollar of Comcast plant depreciation.

Profit = Profit either way (1)

Foolicious (895952) | more than 6 years ago | (#22932602)

Essentially you pay about $60-70 for a connection that you only squeeze maybe $35-45 worth of usage out of it. If a pay-per-usage option were implemented, how do you think the best way to charge for it would be?
Well, it depends who you ask. If you're the provider (ISP) and you've established your business model getting $X profit on an "unlimited" setup, you'd probably set up your pay-per-use option to end up getting you the same. It sounds like I'm being sarcastic, but I'm not.

Accountability? (2, Insightful)

jc42 (318812) | more than 6 years ago | (#22932608)

One major problem is: How would I know that I'd been charged fairly?

In my experience, when I get details of my net usage, there's a lot of stuff there that I can neither control nor account for. Thus, most browsers honor a page's request to refresh it every N minutes, and don't give me a way to turn it off. Any browser that's running can be using bandwidth without most users being aware of the fact. This is especially true for pages that include advertising.

For a while, I had a smartphone with wireless net access. Even when I didn't use it, it ran up packet charges. When I asked, I was simply told that the networking software sends packets on its own. "That's how it works." It's not obvious how a customer can challenge something like this, except via extremely expensive lawsuits.

And what about that advertising? I didn't want it, but it comes "free" with the content that I wanted. Would I be charged for downloading the ads? Of course, I would; what a silly question. Even (or especially) the flash ads. Yeah, I have flashblock installed, but not all browsers honor it, and not all users are aware that it's possible, so this is a potential source of large charges by the ISP.

But the fundamental question is: When my ISP tells me I used X gigabytes last month, how do I know they're not just making up a number? What tools are available that will tell a customer exactly how many bytes of bandwidth they actually used? And if this number differs from the ISP's number, would the accounting tools' data stand up in court?

Unless you can answer this, a pay-per-byte scheme is merely an way for an ISP to charge customers whatever they like, and the customers have no recourse other than to terminate the service entirely.

"service" always requires a premium (1)

mbaGeek (1219224) | more than 6 years ago | (#22932614)

A very good book (that indirectly answers this question) is Customers for Life (available at your favorite online book store)

the author transformed "his Dallas Cadillac dealership into the second largest in America" but don't let this dissuade you ;-)

the "gotcha" from a business standpoint is that it costs money to "develop" a customer - so keeping customers happy means they stick around for a long time and that should equal $$ (and of course knowing when to end the relationship is important as well)

all businesses make a decision on how much service they are going to provide - I don't remember the specific examples but it was something like "WalMart" or "Tiffany's"

WalMart is the low profit margin/high volume/low service option, Tiffany's is the high profit margin/low volume/high service option - neither one is the "best" option, but you have to decide which you want to be (i.e. trying to provide great service at WalMart's prices will quickly put you out of business)

to me the "pay as you go" option is going to equal the "WalMart" scenario - I honestly don't think there are many "Tiffany's" examples in the ISP sector anymore (but it is still obviously a great way to differentiate yourself - a lot of people are willing to pay extra for better service)

and it is most likely that the real problem is that Net access has become a commodity and the profit margins are tiny (which makes the question academic at best)

Alternate business model: (4, Interesting)

NeutronCowboy (896098) | more than 6 years ago | (#22932618)

Here's a truly alternate business model: screw the incumbent telecom carriers. Nationalize the grid that was built out with the help of public funds, and where the public has seen close to no returns. Turn everyone into a CLEC. Everyone plugs into an existing grid that is officially tax-payer funded with zero restrictions on what passes through. All the intelligence - traffic shaping, filtering, content - will be at the edges. Carriers compete based on service, what kind of pipe they can put into the home/condo/dorm and how much traffic they can exchange with the national grid.

Far-fetched? Not really. It's similar to what's going on with the electric grid already. Considering how much the economy is impacted if/when major trunks or local exchange points go down, the internet is also a similarly critical infrastructure. I don't see why lessons learned from the electric grid can't be applied to solving the mess that is the telecom industry.

How bout offering more than you did in 1996 (1)

saladami (827277) | more than 6 years ago | (#22932626)

In 1996 I was able to get the same cable modem bandwidth I'm getting now. If anything it was better with fewer people using it. My uploads were capped at about 50 KB/sec (yeah they advertise it in kilobits, you know what i mean). The download speeds have gone up, maybe doubled since then, maybe 400 KB/sec tops. Yes they offer faster access for more money, but I'm still paying the same price, if not more than I did back then for the same thing. Where's the miraculous "factor of 10" increase we've been expecting all these years? I've heard that it's significantly faster in other countries, for less money. Time to move to India?

Hmm.. (1)

Creepy Crawler (680178) | more than 6 years ago | (#22932632)

Not hard.

Raise the contingence ratio to 50:1

Then claim BS things like "We provide the pipe, not that the pipe can be filled". and
"We reserve the right to do anything to the downstream and upstream as we see fit. We wrote the contract, so bend over."

Oh... Thats what they do now.

Just give us honesty (2, Interesting)

Tweaker_Phreaker (310297) | more than 6 years ago | (#22932710)

All I want from any ISP is the honest truth of 1) what the maximum throughput from my house to the first hop is and 2) what the minimum guaranteed rate is when things get congested locally. In effect I want to know how shitty things will be when everyone in the neighborhood is on and how great they'll be when people aren't. Don't nickle and dime us because we're using more bandwidth, just make sure we know how much it'll be throttled when your pipes can't handle it.

You think we're getting screwed now? (1)

shdowhawk (940841) | more than 6 years ago | (#22932718)

Right now, we're NOT getting the promised rate (if we actually use the access to our full benefits as the "Unlimited Access" claims) .. so people always talk about doing the Pay-As-You-Go model... The problem with that is this:

The top 5 ISP's will still own everything because the government isn't steping in as it should be!

So the "pay as you go" model from comcast, will now tell you that you can use up to 200 gigs in a month, throttle you at 25 gigs, charge you the 500% more than you currently are paying to get the 200 gigs a month, and then they will say "well we are still allowing you to download up to that much since that's the plan you're paying for. After that we'll just cut you off!".

When the government puts its foot down and smacks these huge ISP's / telco's / communication companies around a little to put them in line ... then something like this might be useful... but a change before that will leave most of us more broke than we already are with tons more to loose than gain.

Why not go over to 95th? ... (2, Interesting)

lordsilence (682367) | more than 6 years ago | (#22932744)

Hey. What most private customers dont seem to realise is that bandwidth is very expensive. Some expects DEDICATED bandwidth from your ISP. That's entirely unrealistic. Maybe it's time to start charging private customers by the 95th percentile? if they want dedicated.. Private internet connection is not dedicated and will never be if customers expects prices to go down. It would increase tenfold if you were to pay the actual prices isp's pay for peering , transit et al.

cheap, but efficient touch? (1)

Sh1fty (1019804) | more than 6 years ago | (#22932748)

i'd run forums and chat for users, which would give you great feedback and ideas. whenever you hear an idea that's cheap enough and actually possible, do it. you'd certainly get some unique stuff going that would bring you more users. also, your users would feel that they important to your company. running game servers, helping them set up vpns (for games, work and file sharing) and stuff like that might bring more users :) also, make sure you have good tech support.

Overpriced to begin with. (2, Insightful)

v(*_*)vvvv (233078) | more than 6 years ago | (#22932786)

The problem with pay-as-you-go being optional is that the people who use less will opt for it, while others will go with the unmetered plan. This gives no upside for the ISP. Either one or make the pay-as-you-go a premium rate, in which case it won't be cheap anyway (like prepaid phones). Also, there is the whole measuring infrastructure that adds to the things they need to do and will mess up on.

The bottom line is there needs to be more competition, and better infrastructure. The infrastructure needs to be public property and cable companies should be able to compete over shared cables.

I am not satisfied with my cable service or their internet service, but I have no alternative.

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