Re: Binge On! - get your umbrellas out, stuff's hitting the fan.

[Owen DeLong <owen () delong com>]

> On Jan 11, 2016, at 10:00 , Jeremy Austin <jhaustin () gmail com> wrote:
>
>
>
> On Sun, Jan 10, 2016 at 7:12 PM, Owen DeLong <owen () delong com <mailto: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.

What is your 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.

Yes… And I’m in line criticizing T-Mobile for this. However, when it comes to the pricing model for data overages, 
there’s is the best I’ve seen yet.

>  
>
>
> > 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.

Another term for usage caps is “usage tiers” where you select a tier that you live in and you pay a fine if you exceed 
your usage tier.

However, as I said, I consider everything to the right of AYCE on your “continuum” to be simply variations of 
usage-based billing.

Sure, to a consumer who stays within their usage tier, their tier looks like AYCE (until it doesn’t), but it certainly 
isn’t actually.

> 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?

I would assume quite a bit. There are 7 billion potential subscribers, so that’s 14 billion Mbps or 14 Petabits per 
second world wide.

Owen