Metered Broadband Pricing Coming Soon

One of the key messages that members of the American Cable Association (ACA) are trying to get out is that we will definitely see metered bandwidth pricing at some point in the near future. ACA members are meeting this week outside of Washington, D.C., and they want us all to know that consumption-based billing for broadband usage will be a necessity in order for them to maintain infrastructures that can handle the growth of bandwidth-hogging high-definition (HD) video distribution.

This message comes not from Time Warner Cable or Comcast, but from the little guys. The ACA is made up of over "900 small and medium-sized independent operators," who provide "affordable basic and advanced services, such as high-definition television, next generation Internet access, and digital phone, to more than 7 million households and businesses." Despite the word "Cable" in the name of the organization, its "membership comprises cable, phone, and fiber-to-the-home operators and municipalities."

That's not to say that the big boys aren't also keen on metered bandwidth pricing. Time Warner Cable was busy expanding its tiered pricing model when backlash from legislators and customers caused the company to "delay the rollout of the tiered pricing plan in both Texas cities by a few months." But this is only a delay, not an abandonment of broadband consumption-based billing.

ACA Chairman, Steve Friedman, even went so far as to offer a sort of apology for Time Warner, when he explained to reporters that Time Warner simply hadn't done a good job of communicating why consumption-based billing was a necessity. Friedman stated that this paradigm shift was "not out to inhibit content but to insure quality service for their customers." Friedman is COO of Wave Broadband, which provides boradband service to communities in Washington, Oregon, and Northern California. Friedman also volunteered that Wave Broadband is in the process of informing its customers of the company's plans to soon institute metered pricing plans.

The Ex-Officio chair of the ACA, Patrick Knorr, claims that the driving force behind this need to implement consumption-based billing comes directly from how much bandwidth HD video chews up. As an increasing amount of HD video makes it way onto broadband connections as well as "new services coming down the pike," the infrastructure needs to be built up in order to "meet customer demand."

"Unlike satellite, broadcast, and cable, the Internet is not a particularly efficient way to deliver that high-res video, and there has to be a way to rationalize his business model by putting some of the responsibility on the customer."

Knorr is the COO of Sunflower Broadband, a broadband cable provider in Kansas. Sunflower currently caps each of its three advertised broadband Internet packages, with the highest-end package capped at 50GB and the lowest-end package is capped at 3GB. Overages are charged at $2 per GB (or $0.67 per GB if increased in advance by purchasing and additional 15GB block); although Knorr told reporters that Sunflower is reviewing the overage charges and that it might be possible to lower the rate to $0.50 for advance block purchases.

"Knorr added that the grandmother who just wants to read e-mail should not have to subsidize the HD movie aficionado or the college kid who wants to download a bunch of movies to watch later."

With the little guys and the big boys all clamoring for consumption-based billing, it is looking as though metered broadband is all but a done deal--unless legislators decide to throw a monkey wrench into the works. If consumers and legislators regarded broadband as just another utility, such as electricity, gas, or telephone, however, then perhaps the idea of metered billing would be more palatable as we're already used to paying for these utilities based on how much we consume.

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