Tiered/capped internet plans. Blessing or Devil in disguise?

Tuesday, April 7, 2009 9:59
Posted in category Featured, Tech Politics

The World Wide Web is quickly becoming the one stop shop if you will for everything in our lives.  Everything from cooking classes, to how-to mechanic videos, to live concerts.  Online video, whether it be in the form of movies, live events, or other forms, are becoming the biggest draw to the internet.  All of the new found love in video over broadband connections is making broadband providers sweat.  Why?  They “claim” infrastructure costs are rising as well as networks are reaching their limits under the ever increasing load.  This is merely propaganda that they are trying to fool you with in order to justify tiered broadband plans.  So, are tiered plans and tierd pricing all they are cracked up to be?

If you think about it at the very basic level, if Grandma only checks email twice a month while her neighbor streams/downloads 10-20 gigs a day yet they still pay the same $30-$40 for internet, one can start to see the injustice here.  Why should Grandma have to pay as much as the heavier user next door?  In this light I have no problems with tiered plans.  That’s right, I said I don’t have any problems with tiered plans or pricing.  It does make it more fair for users.

Don’t get too enraged as the tiered plans and pricing that companies such as Time Warner are pushing are no where near an ideal “pro-consumer” type of deal.  For example, Time Warner’s early draft of their tiered plans will set you back anywhere from $30-$55 and provide you with quality, capped service with caps at 5GB, 10GB, 20GB, and 40GB.  Happiness all around! *obvious sarcasm*.  There is also talk from the Warner camp that they are going to have an “open mind” with their pricing plans and our even toying around with offering a 100GB capped plan as well as higher caps with reduced download speeds.  Comcast currently has a more generous 250 GB blanket cap of their own, though other tiers have been rumored from them as well.  How much would that cost?  Would the other plans get bumped down and the 100GB take the price point of the 40GB plan?  One, no price has been mentioned for the uber sized cap.  And two, it’s doubtful they would offer the 100GB cap at the 40GB price.  That is simply too much opportunity wasted (I’m sure that is what is flowing through their heads).

Are you worried about these caps?  You should be not necessarily because of the actual cap, but because of the way they will price gouge, manipulate, and ruin the consumers’ wallets and internet experiences.  If you are thinking to yourself, “Sweet, I’ll get the cheapo plan as I don’t do that much online anyway.  A video download here, a few songs there, and of course normal web browsing and email”.  You may be surprised how fast those caps will creep up.  For example, do you watch TV on through your internet connection?  If so, you are in big trouble that even the 40GB plan may not be able to salvage.  A mere 7 hours of standard-def video or a paltry 2.5 hours of high-def video per week is all that is needed to leave the 40GB monthly cap in the dust and your wallet weeping.  And that is just TV, that does not factor in other more daily activities such as web browsing, email (don’t forget attachments), and other web based activities.

The push for cloud services is making headlines lately as the way to free up your computer, save space, (though with a 1TB internal easily had for around $100 give or take, space is hardly an issue anymore), and bring your work/life online as to have it readily accessible no matter where you are in the world.  Not to mention, the mad push of people dumping their traditional cable services and shifting towards online services such as Hulu are making internet providers really look long and hard at how they can screw their customers make money and stay in business due to the quickly changing market.

So are tiers the right answer?  Yes and no.  Yes in the fact that if I’m using less than 4GB per month while my neighbor across the street is bringing in ten’s of GB’s per day and no in the sense of the way they are going to price plans.  Below is how I think prices should be or at least somewhat follow for tiered pricing.

  • 0-10GB $10
  • 11-25GB $15
  • 26-75GB $20
  • 76GB+ $30

You’ll notice much lower than what you have seen anywhere so far, and by far the cheapest “unlimited” plan under a tiered scheme.  Of course, once the service provider exec’s read this and see the prices they’ll laugh until their pudgy little bellies hurt at which point they’ll take a swig of their $70 bottle of water all while sitting back in the freshly renovated $2 million office.  Tiered pricing could really by a good thing for the consumer and the market as a whole, however greed will as always be the downfall.  I’m sure a majority of people would just pay the $30 for unlimited access even if they don’t come close as it is always reassuring just knowing that you have unlimited.  It is a piece of mind that makes you happier and more likely to stay with that particular company.

So what do you think?  Are tiered plans right for you?  Would you stay with a company that moves to a tiered pricing scheme, or, would you run like mad to your nearest Verizon store and sign up for FiOS which at this point in time doesn’t have any proposed tierd plans even in the works?  Let out your angers, frustrations, and thoughts on the world in which we live in the convenient little box below!

Source: Alley Insider 1, Alley Insider 2, Cnet

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No Responses to “Tiered/capped internet plans. Blessing or Devil in disguise?”

  1. Joe says:

    July 7th, 2009 at 1:34 am

    Bingo. I was hoping you would mention the exact scenario that is unfolding…. the broadband companies gleefully recognizing they just might actually get to do this…. it will be exactly as you describe… they will gouge everyone of us geeks that have been in the IT world long before most people knew what the Internet was, and all the geeks that have been born since. So, Emily Email checker, who knows no better, will pay $30 to check her email one a week, all the while those of us that know we are getting screwed will have to pay $150 just to have the security of unlimited that we have always enjoyed.

    Hopefully, if these fat cats get by with this, and they don’t each die a slow painful death somehow, the market will eventually correct itself and companies will have to woo us geeks and compete with each other over our business and thus lower the ‘unlimited’ plans to amounts that are more reasonable.

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