Bill St. Arnaud has posted a paper on usage based billing that challenges some of the frequently made claims on UBB. St. Arnaud notes that the paper demonstrates three important facts: Internet video streaming services actually reduce costs for Internet backbone networks operated by telephone and cable companies, even as […]
Post Tagged with: "usage based billing"
Those posts attracted some attention and soon afterward I was asked by Netflix if I was interested in digging deeper into these issues. The company provided some support so that I was able to quickly assemble a great team of students – Keith Rose, Peter Waldkirch, Tyler Nechiporenko, and Rachel Gold – to delve into issues such as congestion claims, comparative UBB approaches, the cost of transferring a GB of data, and some potential solutions. I completed the paper over the weekend and have posted it here. I’ll be posting on several elements over the next few days, concluding with my proposal for the establishment of a UBB equivalent for Internet Traffic Management Practices (ITMPs), which I’ve dubbed Internet Billing Usage Management Practices or IBUMPs.
This first post features a comparative look at usage based billing in other countries.
Bell obviously saw the writing on the wall and has come back with a plan that allows independent ISPs to purchase 1 TB of data for $200 with an overage charge of 29.5 cents per GB. The aggregation of independent ISP subscriber traffic means that those ISPs can choose to offer whatever plans they like – unlimited, capped, or variations thereof – simply by purchasing aggregated data from Bell under the tariff. The aggregated pricing model was proposed by several people (even I figured it out in my first long UBB post on February 1st) and is certainly better than the wholesale UBB approach it replaces.
Notwithstanding the proposed improvement on wholesale terms, this represents only a small part of the broader UBB issue.
The cable company submission to the CRTC on usage based billing confirms what has been readily apparent to consumers for some time: there is no link between the prices charged by ISPs for usage pricing and the actual costs to ISPs. According to the cable companies: In order to be […]
As for small businesses, which are generally on the same network as residential users, what you have is really a case where the congestion during peak periods is largely a residential phenomenon. It’s in that area that we’ve addressed the usage-based billing issue, and all we’re asking the CRTC for is to follow a fundamental principle of fairness. If we asked 97% or 98% of Canadians if they would be prepared to pay more so that the 2% of heaviest users pay less, I’m pretty sure of what the answer would be.
While Bell emphasized fairness once UBB became a political hot potato, the company had a far different emphasis when discussing UBB last year with financial analysts. In an August 2010 quarterly call, BCE CEO George Cope stated: