AfterDawn: Tech news

U.S. ISPs preparing to screw over consumers and move to usage-based pricing

Written by Andre Yoskowitz (Google+) @ 01 Dec 2011 13:03 User comments (33)

U.S. ISPs preparing to screw over consumers and move to usage-based pricing Time Warner Cable and other ISPs are preparing to move to usage-based pricing for their Internet access, in the latest ploy to squeeze every last cent from consumers.
One analyst, Craig Moffett, of Sanford C. Bernstein & Co. says he predicts that either Time Warner, Cox or Charter will institute the pricing model in 2012.

So far, there have been no official moves to usage-based pricing in the U.S., but (of course), AT&T has been experimenting. Rogers in Canada has been using the model since 2008.

It appears that the ISPs, most of which are cable TV providers, as well, are scared of the exponentially growing usage of web video spurred by Netflix, Hulu, Amazon, Apple and more recently HBO and Google.

Time Warner, the second-largest US cable operator, says they lost 126,000 pay-TV accounts last quarter as more consumers "cut the chord."

The ISP tried to test tiered pricing in 2009 but overwhelming consumer disgust forced the company to drop the attempt.

Streaming services such as Netflix have vocally panned the move, which will force it (and other similar companies) to lose millions of subscribers.

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33 user comments

11.12.2011 13:04

Just so everyone knows, I didn't add it to the article but ISP margins on broadband range from 92-99 percent. Yep.


21.12.2011 14:01

Another nail in the coffin for consumers in the name of corporate greed. If internet access gets to expensive, I guess its back to snail mail, going to the library, renting DVD/Bluray movies, installing a TV antenna on the roof, listening to the radio, reading the paper, etc. Going back to a more simple life may not be so bad.

31.12.2011 14:19

The article states that Rogers in Canada has usage based pricing. The pricing is actually a fixed amount with a cap and charges for overage. The plan that I am on allows for up to 95 GB per month for a set amount. If you go over the 95 GB then they charge a certain amount for the overage to a maximum of $50 more. It sucks but at least it isn't true metered billing where you pay for each GB that you use.

41.12.2011 14:35

Originally posted by aw2600:
The article states that Rogers in Canada has usage based pricing. The pricing is actually a fixed amount with a cap and charges for overage. The plan that I am on allows for up to 95 GB per month for a set amount. If you go over the 95 GB then they charge a certain amount for the overage to a maximum of $50 more. It sucks but at least it isn't true metered billing where you pay for each GB that you use.
No, but the usage-based here in the States would be similar. i.e. For $10 would be under 10GB, for $50 would be 500GB, for $1 million it would be 1TB, etc (these are just examples, not actual figures)

51.12.2011 14:55

LOL, no wonder you Americans are getting left behind the technology race. Good luck, my well fed friends, you're going to need it.

Greetings from us over at the underdeveloped, but increasingly technologically advanced 3rd world countries.

This message has been edited since its posting. Latest edit was made on 01 Dec 2011 @ 15:30

I'll stick my foot up your ass.

61.12.2011 15:07

If apple should sue anyone, it should be the ISPs. These caps and tiered priced plans will only inhibit people who purchase a lot of media from iTunes.


"Cable thief is a victimless crime."

71.12.2011 15:37

I just got a notice from Time Warner in the mail yesterday that they were raising my internet bill by $10 to $49.99 a month and raising my DVR rental feel by $5 from $8.99 to $13.99 a month.

This message has been edited since its posting. Latest edit was made on 01 Dec 2011 @ 15:38

81.12.2011 16:52

Originally posted by rtm27:
I just got a notice from Time Warner in the mail yesterday that they were raising my internet bill by $10 to $49.99 a month and raising my DVR rental feel by $5 from $8.99 to $13.99 a month.
Time to send them a notice and drop their service. When a business model stops working, the answer is not always to raise prices. They are not too big to fail.
This message has been edited since its posting. Latest edit was made on 01 Dec 2011 @ 16:57

91.12.2011 17:01

Originally posted by rtm27:
I just got a notice from Time Warner in the mail yesterday that they were raising my internet bill by $10 to $49.99 a month and raising my DVR rental feel by $5 from $8.99 to $13.99 a month.
Ask yourself, have you ever heard ANYONE, EVER, say "Man, I sure am happy with my Time Warner Cable service." Doubt you ever will. Power of a monopoly.

101.12.2011 17:38

And where I am, I am stuck. My apartment complex is supplied by Time Warner....the only other option for cable internet is one called Grande....but from a few I know who have their service, they are not very happy with them....and their prices are about the same for what I am paying...with slower d/l speeds.

I have had Time Warner's Roadrunner service since it came into my area around 2001. I started off with their intro package of $9.99 a month for 6 months, upped to $14.99 a month after that. They have went up at least once a year since then, to my new price of $49.99 a month beginning in January.


111.12.2011 21:59

time for some of the European providers to shut out American companies with faster better internet . verizon fiber would hurt most of the cable providers and nearly 3/4 of the dsl providers so any improvement beyond that would kill off competitors like T/W .

121.12.2011 23:55

I am very happy that I have verizon FiOS in my area...not just because it is fast, responsive, reliable, and cheap...but because it takes customers away from Time Warner!!!



132.12.2011 9:41

Got rid of FiOS. Absolutely loved their service. Their Customer Service was another story. Their rates were almost $200 a month for me. Cheap it ain't.

142.12.2011 10:04

Originally posted by b854th2:
Got rid of FiOS. Absolutely loved their service. Their Customer Service was another story. Their rates were almost $200 a month for me. Cheap it ain't.
It is only $50 with taxes, 30mbps up and down. I guess it costs more if you throw on all ~300 channels and the phone line, but it is great if you just want internet. I have a cell phone and netflix, so that is all I need.


152.12.2011 10:12

Cell service is inconsistent here. And I live in the Metro NYC area! Wife cannot live without all that crap reality tv.

162.12.2011 10:40

i laugh at people who still have cable tv service. you are wasting your money. all i have is cable internet. i had tv but i turned it off maybe 5 years ago. i've never used hulu but i'm pretty sure all the good shows are on there, the last few eps that aired anyhow. for anything else there is bittorrent and your money is much better spent on a vpn for the more security conscious.

i download everything i want to watch either from irc channels or bittorrent. i have cox's preferred service i pay 45 bucks a month. i forget the speed but i can usually pull down 2MB/s on a well seeded torrent. That's good enough for me. i pay for my mom's cable service also through cox and that bill is 98 dollars a month. she does not have any of the premium channels but has to get the variety tier to get scifi and chiller and one other tier. she watches probably 5 or 6 channels. i got her a computer but she doesn't want to learn how to use it. if you have the internet you do not need the tv or phone service. the cable phone services uses voip anyway and charges you 10 bucks a month. might as well get a magicjack (i have one for emergencies).

anyway back to the article. i knew it was only a matter of time. i think cox will be the one to jump in. i got an e-mail from them a few months ago saying data will be monitored to see if i exceeded 500GB (i think it was that high... i should have kept it) but would not be charged if i actually went over.

172.12.2011 12:15

Originally posted by rtm27:
And where I am, I am stuck. My apartment complex is supplied by Time Warner....the only other option for cable internet is one called Grande....but from a few I know who have their service, they are not very happy with them....and their prices are about the same for what I am paying...with slower d/l speeds.

You are better off then me. My apartment complex uses Blue Top Communications(Dish Network subcontractor) who sets up multiple dishes in a single location on the property and feed it out to all the apartments. They call it "cable" and let me tell ya, it provided a really high quality picture[/sarcasm]. We did not even get the option for HD or DVR for over a year after "the big switch." For Internet and home phone you are stuck with AT&T. We do not have home phone just DSL service. AT&T implemented a 150GB a month cap, and after we cut the cable here, due to them taking 3 weeks to reactivate our "cable box," that was not enough. I contacted them about Small Business DSL service and they informed me the Small Business plans would remain unlimited(as I figured, as I don't think they want to loose there big business customers over caps). They let me switch services no questions asked. They did not even try to ask for verification of being a businesses of any sort. Might be worth looking in to since you, like me, have no real alternatives.

Originally posted by Ryoohki:
i laugh at people who still have cable tv service. you are wasting your money. all i have is cable internet. i had tv but i turned it off maybe 5 years ago. i've never used hulu but i'm pretty sure all the good shows are on there, the last few eps that aired anyhow. for anything else there is bittorrent and your money is much better spent on a vpn for the more security conscious.

i download everything i want to watch either from irc channels or bittorrent.

And some people laugh at you for taking the risk of going through generally illegal channels to obtain your TV shows. I am not one of them, but I do laugh as you seem awfully cocky about it. Some people may be more interested in the likes of a Roku Streaming Media Player. Of course with an Internet cap that may be a problem, but I know some one who cut there cable, got a Roku, and he was showing me how there are a ton of free "tv" channels, but then you have the options of buying services from the likes of MLB.com for about $12 a month to stream any game you want. You can get HBO Go for an additional price, and so on. They have a great variety and get all the latest shows and pay less then half of what they paid for cable.

182.12.2011 12:40

"i laugh at people who still have cable tv service. you are wasting your money. all i have is cable internet. i had tv but i turned it off maybe 5 years ago. i've never used hulu but i'm pretty sure all the good shows are on there, the last few eps that aired anyhow. for anything else there is bittorrent and your money is much better spent on a vpn for the more security conscious."

You are not too smart getting your stuff from Torrents. You will someday get nailed.

I like DTV for my TV/HD stuff. Crystal clear video and excellent audio.


Cars, Guitars & Radiation.

192.12.2011 12:51

Originally posted by Jeffrey_P:
You are not too smart getting your stuff from Torrents. You will someday get nailed.
You don't know much about torrents do you? I don't mean that as an insult but saying someday you will get nailed is a bit reaching imo. Not to say that there is no risk involved, but there are ways to highly minimize your risk. Obviously using TPB for hot torrents while exposing your ISP IP address is not very smart and very likley to get you caught. However, using a seedbox or vpn on TPB, for example, is a step in the right direction for being safe. Then moving to private sites is even better and using a VPN or seedbox on a private site furthermore decreases your risk. Of course it also means using a smart seedbox/vpn provider who will not give up your information at the first hint of a legal threat.

OS: Kubuntu 12.10/Windows 8 -- CPU: Intel Core i7 2600K -- Motherboard: MSI P67A-G45 -- Memory: 2x4GB Corsair Dominator -- Graphics Card: Sapphire 4890 Vapor-X -- Monitor: Dell 2208WFP -- Mouse: Mionix NAOS 5000 -- PSU: Corsair 520HX -- Case: Thermaltake Mozart TX -- Cooling: Thermalright TRUE Black Ultra-120 eXtreme CPU Heatsink Rev C -- Hard Drives: 1x180 GB Intel 330 SSD/1xWD 1 TB Caviar Black/1xWD 2 TB Caviar Green/2xWD 3 TB Caviar Green

202.12.2011 13:08

Originally posted by Xplorer4:
Originally posted by rtm27:
And where I am, I am stuck. My apartment complex is supplied by Time Warner....the only other option for cable internet is one called Grande....but from a few I know who have their service, they are not very happy with them....and their prices are about the same for what I am paying...with slower d/l speeds.

You are better off then me. My apartment complex uses Blue Top Communications(Dish Network subcontractor) who sets up multiple dishes in a single location on the property and feed it out to all the apartments. They call it "cable" and let me tell ya, it provided a really high quality picture[/sarcasm]. We did not even get the option for HD or DVR for over a year after "the big switch." For Internet and home phone you are stuck with AT&T. We do not have home phone just DSL service. AT&T implemented a 150GB a month cap, and after we cut the cable here, due to them taking 3 weeks to reactivate our "cable box," that was not enough. I contacted them about Small Business DSL service and they informed me the Small Business plans would remain unlimited(as I figured, as I don't think they want to loose there big business customers over caps). They let me switch services no questions asked. They did not even try to ask for verification of being a businesses of any sort. Might be worth looking in to since you, like me, have no real alternatives.

Originally posted by Ryoohki:
i laugh at people who still have cable tv service. you are wasting your money. all i have is cable internet. i had tv but i turned it off maybe 5 years ago. i've never used hulu but i'm pretty sure all the good shows are on there, the last few eps that aired anyhow. for anything else there is bittorrent and your money is much better spent on a vpn for the more security conscious.

i download everything i want to watch either from irc channels or bittorrent.

And some people laugh at you for taking the risk of going through generally illegal channels to obtain your TV shows. I am not one of them, but I do laugh as you seem awfully cocky about it. Some people may be more interested in the likes of a Roku Streaming Media Player. Of course with an Internet cap that may be a problem, but I know some one who cut there cable, got a Roku, and he was showing me how there are a ton of free "tv" channels, but then you have the options of buying services from the likes of MLB.com for about $12 a month to stream any game you want. You can get HBO Go for an additional price, and so on. They have a great variety and get all the latest shows and pay less then half of what they paid for cable.
I laughed at him laughing at us. Did anyone else catch that he pays $98 a month for his mom's cable, yet laughs at others?

212.12.2011 15:22

"You don't know much about torrents do you? I don't mean that as an insult but saying someday you will get nailed is a bit reaching imo."

You may be right about that. I tried using Torrents once a few years back. What I found out is the quality sucks and Comcast throttled my download speed.

Is it really worth it regardless of the layers of protection? Not for me and it is up to the user to use them.

$98.00 for his moms cable bill? Must be a kiddie.

This message has been edited since its posting. Latest edit was made on 02 Dec 2011 @ 15:23

Cars, Guitars & Radiation.

222.12.2011 19:08

I pay for my mom's cable because she could not handle what I set up for her with the internet. She's not very technologically inclined. It would be cheaper if I went with dish network for her or something but she wants to stick with what she has. Took me a long time just getting her use to the buttons on the remote.

Before I cut the cable my internet+tv bill with all premium channels was 200 dollars a month. Now I pay 45 dollars and still watch all of the programs I want. That is a significant savings. Also you guys must not have downloaded anything in a very long time. There are usually sd and hd quality versions of most of the shows that are put out by release groups. Paying for cable tv has no benefit other than catching the show when it first airs in your area vs downloading it the next day (or a few hours later usually in most cases). I can get what I want when I want it using what I'm already paying for.

This message has been edited since its posting. Latest edit was made on 02 Dec 2011 @ 19:08

232.12.2011 20:05

"Before I cut the cable my internet+tv bill with all premium channels was 200 dollars a month. Now I pay 45 dollars and still watch all of the programs I want."

Wow, you were getting jacked. I get 240 channels including the sports package, 60 Mbit fiber optic DSL internet and a telephone land line with anywhere in the US calling for $121.00 a month.

Jeff

242.12.2011 22:04

If they are going to incorporate data caps, then they should remove the speed caps. That should be fair.

252.12.2011 22:17

Originally posted by DVDBack23:
Just so everyone knows, I didnt add it to the article but ISP margins on broadband range from 92-99 percent. Yep.
Where is your source for this figure?

262.12.2011 22:52
WierdName
Inactive

The usage cap was already addressed with speed caps... Like the other guy said, if data caps are introduced, they better cut the speed caps. I wouldn't be surprised if a class action suit is started if data caps go up and people are still only getting 80% at most of their speed bracket. And it's not a technology limitation in most cases, speed is limited at the hub based on a virtual switch tech support could flip in no time.


Doesnt expecting the unexpected make the unexpected expected and therefore mean youre expecting the expected which was the unexpected until you expected it?
"Opinions are immunities to being told were wrong." - Relient K

272.12.2011 23:27

Originally posted by EzCeazy:
If they are going to incorporate data caps, then they should remove the speed caps. That should be fair.
LoL...fair...from a Monopoly? I guarantee these policies will only be enforced in areas where there is no competition, or where the competition is doing the same thing. At my last place we only had Bright House...it was $95 a month for 15mbps/1mbps internet with no TV. I move less than 3 miles away into a neighborhood with FiOS and Bright House, and bright house is offering 30mbps/3mbps service for $40 a month, plus the first three months free. I checked with one of my friends that still lives in the same apartments I moved from, and a full year later bright house is still charging the same amount for the same service...and actual speeds are far lower than they were when I left.

Competition is a very good thing for consumers.


283.12.2011 0:41

Well if this goes on I'm afraid I'll have to find a social life, life sucks.

293.12.2011 1:11

Originally posted by EzCeazy:
Well if this goes on I'm afraid I'll have to find a social life, life sucks.
ROFL...we wouldn't want that!


303.12.2011 9:27

Originally posted by Semperfipal:
Another nail in the coffin for consumers in the name of corporate greed. If internet access gets to expensive, I guess its back to snail mail, going to the library, renting DVD/Bluray movies, installing a TV antenna on the roof, listening to the radio, reading the paper, etc. Going back to a more simple life may not be so bad.
Could be a case for history repeating itself. We could use those little yellow wood things on a piece of paper again.

313.12.2011 14:31

Originally posted by antiartis:
Originally posted by DVDBack23:
Just so everyone knows, I didnt add it to the article but ISP margins on broadband range from 92-99 percent. Yep.
Where is your source for this figure?
Read Time Warner's latest quarterly earnings report.

325.12.2011 12:35

Originally posted by DVDBack23:
Just so everyone knows, I didn't add it to the article but ISP margins on broadband range from 92-99 percent. Yep.

Which makes them even bigger jagoffs for milking even more cash from us without merit. Just because they "can" charge more.......doesn't mean they should.

3312.12.2011 23:43

Originally posted by DVDBack23:
Just so everyone knows, I didn't add it to the article but ISP margins on broadband range from 92-99 percent. Yep.
When you say margins, just what do you mean? Is it their cost above operating costs, after-tax profit margins, or what?

Most computer manufacturers, for example, usually sell retail at about twice what their material costs are. It's the only way they can make a profit.

Referring people to Time Warner's latest quarterly earnings report means nothing. Most earnings reports break down margins at the various levels I described above. How about a link with a referral to an actual line in their statement?
This message has been edited since its posting. Latest edit was made on 12 Dec 2011 @ 23:46

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