On Sun, Jan 10, 2016 at 7:12 PM, Owen DeLong <owen@delong.com> wrote:
For $x/month you get Y GB of LTE speed data and after that you drop to 128kbps.
You don’t pay an overage charge, but your data slows way down.
If you want to make it fast again, you can for $reasonable purchase additional data within that month on a one-time basis.
I would like to encourage other carriers to adopt this model, actually. If Verizon had a model like this, I would probably switch tomorrow assuming their prices weren’t too far out of line compared to T-Mo.
This is similar to Hughesnet's FAP (unfortunately named Fair Access Policy). I've had some consumer success with this model. There are other fairness models that can augment it, however; it's not my favorite.
The Internet (from the non-eyeball side) is designed around a
free-feeding
usage model. Can you imagine if the App store of your choice showed two prices, one for the app and one for the download? The permission-based model on Android would have requests like, "This app is likely to cost you $4/week. Is this OK?”
Kind of an interesting idea, but to me, the reason usage charges induce stress has ore to do with the fact that they are kind of out of control pricey first of all and second of all that you start incurring them without warning and without any real ability to say no on most networks.
That’s why I actually like the T-Mo strategy here. With existing tools, the customer has full choice and control about “overage” costs even if their data usage remains somewhat opaque.
From what I understand, the controversy around T-Mo is that the technique itself was opaque, correct? If the Internet as a whole *had* an "SD" knob,
like Netflix on AppleTV/etc., usage-billed customers would benefit — as long as it was plainly spelled out.
In addition, let's say I know of an ISP that makes 10% of its revenue from overage charges. Moving to a purely usage-based model would lower ACR, as it would have to charge a more reasonable price/gig; that top 10% of users won't replace the lost revenue. So even providers may have little incentive to change models, particularly if they have a vested interest in inhibiting the growth of video or usage in general.
How can an ISP make 10% of its money from overage charges unless they are doing usage-based billing? If you’ve got an AYCE plan, you don’t have overages. If you don’t, then you have some form of usage based billing.
The varieties of usage based billing that are available are a far less interesting exercise.
Owen
On a continuum, AYCE at one end, pay-by-the-bit at the other, and in between, usage caps. For the majority of customers on $provider network, caps are unnecessary; for them, the flat rate they pay is effectively an AYCE. Smaller stomachs, and they are paying a higher $/bit as they use less. Those who incur overages are experiencing usage-based billing. I agree it is uninteresting, but there it is. How much uncapped LTE spectrum is needed before we can hit that 2Mbps per customer referred to recently?