Broadband Pricing – Unlimited, Data caps and contention ratios

Back in the day when Broadband Internet appeared and P2P first reared its head, I was travelling the world doing battle anywhere that devil could be found. There was no Net Neutrality talk back then. Depending where you were in the world, the Internet and broadband pricing looked very different. In the mainland US the Internet was a smorgasbord of content and speeds – a god given right. Flip to the other side of the world, Australia and NZ and the Internet was a trickle, a scarce, precious commodity to use be used as little and sparingly as possible. Those of us who grew up in the “Internet under-privileged” parts of the world had never known Broadband Internet without data caps. I remember someone telling me in the early days that the cost associated with 1Mb of traffic landed in Australia was almost $300. Who would ever pay $300 dollars for 1M of traffic?!?

AT&T's new broadband pricing

Broadband Pricing models conitune to evlove

Contention ratios were all the rage back then. ISPs and Carrier would put more and more subscribers (ie: customers, though sometimes you wouldn’t know it) on the same piece of wire or the same shared resource. This was real Net Neutrality – survival of the fittest/most aggressive – if you like. Contention ratios of 20:1 or 50:1 were common, but depending were you ventured you could see real contention ratios of 500:1 or higher. The super highway was at best a trickle, but would anyone have wanted to shoulder alone the real costs of the traffic? Broadband pricing models simply reflected that fact.  This week AT&T did some reorganizing of their pre-paid GoPhone service plans on Wednesday.

  • The carrier added a new pricing tier, and replaced a data cap with unlimited data. Before Wednesday, AT&T had two pricing options with unlimited talk and text for GoPhone subscribers. The $40 a month plan comes with 500MB of data, while the $60 a month plan allows subscribers 2.5GB of the sweet stuff. Subscribers exceeding their data cap would have their access to the internet cut off, unless an additional bucket of data was purchased.
  • The carrier also eliminated the data cap on all three plans. Instead of cutting off access to the internet for those who exceed their cap, and offering additional data for those subscribers to buy, AT&T will throttle their data speed to 128kbps. That speed will continue for the remainder of the customer’s 30-day subscription period.

While the 128Kbps may make some of us nostalgic for the old days, there ain’t much you can really do with it these days. At last week’s Broadband Traffic Management event in Barcelona, Gil Sharon, the GM of Pelephone (Israel) was delivering the usual company/industry line – “everything is going up, everything except the revenue”. Pelephone’s response is to do away unlimited data and do away with shaping/throttling. Mr Sharon said they simply use the end of quota as an up-sell opportunity. Looks like they just play hardball, doable in some market, not easy in others.

While in the UK O2 has launched two new data sharing plans. The Sharer and Family Sharer contracts give you one data bundle of up to 8GB to share across multiple devices. Some North American operators claim shared data between family members and devices can increase “APRA” significantly. ARPA (Average Revenue per Account) is now used by some operators (Verizon for example) instead of ARPU. Verizon mad the switch to account for its shared data plans earlier this year.
So there is still no “right way” to do broadband pricing, it continues to be a moving target. If anything there is an overabundance of broadband pricing models out there than ever. Operators need to choose the right option for themselves and their subscribers in the place and time it suits at least until the ground moves again.

More on AT&T Here…. [phonoearena]

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