DailyTech - FCC Chief Genachowski Plugs "Pay-Per-Play" Metered Internet Pricing

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Internet FCC Chief Genachowski Plugs "Pay-Per-Play" Metered Internet Pricing
Jason Mick (Blog) - May 23, 2012 9:13 PM

30 comment(s) - last by erikstarcher.. on May 24 at 2:57 PM

Genachowski's commentary is clearly predicated on fair pricing, but will telecoms "play nice"?

U.S. Federal Communications Commission Chief and Obama administration appointee Julius Genachowski stirred up controversy on Tuesday when he voiced support for "pay-per-play" useage-based internet pricing schemes.

The practice of pricing users' wired-connection services via traffic is a controversial one. But Chairman Genachowski sounded firmly in support of the practice, commenting at the 2012 Nation Cable and Telecommunications Association trade show, "Usage-based pricing would help drive efficiency in the networks."

The comments come just a week after Comcast Corp. (CMCSA), the largest cable internet service provider in the U.S., announced that it would be testing out usage base pricing in some regions. Comcast is the second major cable provider to test such a scheme, following in the footsteps of Time Warner Cable Inc. (TWC).

Time Warner Cable's 2009 trial ended in a disastrous flood of customer complaints, negative media publicity, and admonishment from consumer advocacy groups. Comcast, who has at times played an adversarial role to the FCC over "data discrimination" (throttling), is surely hoping for a smoother deployment.

_{The head of the FCC, Julius Genachowski is a fan of useage-based cable internet pricing.

[Image Source: JD Lasica/Socialmedia.biz]}

Part of Mr. Genachowski's more cheerful tone towards Comcast, et al. may be due to a new cross-provider deal to provide free Wi-Fi hotspot access to customers. Comcast, Time Warner Cable, Cablevision Systems Corp. (CVC), Cox Communications, and Bright House Networks have teamed up to share these hotspots among all of their collective customers.

Mr. Genachowski lauded the move, indicating that it may put pricing pressure on Wireless service providers like the top two networks, AT&T, Inc. (T) and Verizon Wireless -- Verizon Communications Inc. (VZ) and Vodafone Group Plc. (LON:VOD). These carriers have been roundly criticized for charging customers large fees for inexpensive services, such as SMS text messaging.

Source: NBC

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Why?

By 4745454b on 5/23/2012 9:40:54 PM , Rating: 5

First, we've been having "unlimited" internet access for years, over a decade. Why do we need to start charging extra? Second, other countries don't seem to have these issues. I'm about to move to Japan where they don't care how much you transfer per month. I really think a lot of the issue is greedy companies don't want to upgrade equipment because their bonus at the end of the year won't be as big.

RE: Why?

By StevoLincolnite on 5/23/12, Rating: 0

RE: Why?

By phatboye on 5/23/2012 10:25:49 PM , Rating: 5

Don't give me that crap, all of these ISPs especially Comcast, Verizon and AT&T are raking in billions in annual profit by overcharging their customers they have plenty of money to upgrade their infrastructure.

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RE: Why?

By Noya on 5/23/2012 11:11:42 PM , Rating: 1

Exactly, that's always the excuse...just as I get a rate increase notice from Comcrap, which seem to happen annually if you don't sign a "locked in price contract for 2-years" bullshit deal.

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RE: Why?

By Samus on 5/24/2012 1:08:27 AM , Rating: 5

This guy is a moron. Demand drives efficiency, not lack there of, by charging more based on usage.

Unless he is saying there will be a huge discount for people who use very little, then he is a moron in economics. San Diego Gas & Electric discounts the first 100 killawatts "at cost" for electricity usage, encouraging people to use less. And it works, many people are very concious of vampire power, using the dishwasher/dryer sparingly, and upgrading to energy efficient electronics like LED TV's and computers.

That is the right way to drive awareness and efficiency, by promoting, not punishing, the consumer.

A progressive he is not.

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RE: Why?

By fteoath64 on 5/24/2012 6:45:00 AM , Rating: 2

You are right!. He looks the part as well. It takes one to choose one so the US ended up with such a mess.

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RE: Why?

By Jeffk464 on 5/24/2012 7:42:47 AM , Rating: 2

Oh sure, the cable companies are going to give anyone a break. You know you will pay the monthly fee and then a data use on top of that.

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RE: Why?

By Jeffk464 on 5/24/2012 7:44:51 AM , Rating: 3

He means more efficient at seperating the costumer from their money.

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RE: Why?

By amanojaku on 5/23/2012 11:39:19 PM , Rating: 3

The OP never said anything about fiber to everyone. He said upgrades, which is needed at the core. Having worked for ISPs, the issue is the companies started with an unsustainable model of over subscription. There were places that had hundreds of high speed DSL or cable customers running over a single DS3 (45Mbit, or 4 cable customers at max usage) or OC-3 (155Mbit, or 15 cable customers at max usage). People never really used the bandwidth, so companies piled on more users, while competing by offering even more bandwidth. The core became a giant family plan, where every customer used from the pool of bandwidth.

The average user doesn't need the 10Mbit that cable offers. Even Hulu, which spikes to 10Mbit at times, doesn't need it: because of buffering. I just played a video while keeping my network meter up, and the line was mostly dead, with huge bursts. On average, it transferred about 2Mbit/sec, 20% of what the average 10Mbit connection offers. I wouldn't mind paying 20%, or $10, for access instead of the $50 I pay now.

Instead of caps, there should be tiered services, sold in increments of 1Mbit, or maybe even 1/2Mbit. Lowering bandwidth effectively lowers the monthly transfer of large files (there's your "cap"). The latency won't change, so small packets (web pages, texts, skypes, online gaming, etc...) transfer equally fast across both large bandwidth and small bandwidth. A user who can't predict his bandwidth use would just buy the smaller package. Someone more technical would pick something faster. Anyone would be able to move up or down month to month based on want or need. And the larger the tier, the lower the cost per bit (i.e. bits at 2Mbit are cheaper than at 1Mbits because you're buying in bulk, use or lose).

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RE: Why?

By ats on 5/24/2012 3:15:00 AM , Rating: 5

That might be a valid argument if places in the US that had population densities of 20K+ per square mile actually had fiber service. But they don't. In fact the vast majority of FTTH locations in the US are primarily rural and the services aren't provided by traditional telcos.

Places like NYC and SF have both the population density and the average income to support FTTH at higher profits than many other places in the world like Korea and Japan, yet still don't have it. It is basically the telcos milking their customers as much as possible.

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RE: Why?

By Dr of crap on 5/24/12, Rating: 0

RE: Why?

By Stevethewalrus on 5/23/2012 11:09:16 PM , Rating: 4

Well of course there bonuses won't be as big, I mean someone has to bribing Genachowski.

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RE: Why?

By Samus on 5/24/2012 1:10:08 AM , Rating: 3

Bribing in the FCC? No....can't be. :)

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RE: Why?

By hero_of_zero on 5/24/2012 1:05:27 PM , Rating: 2

last one now working for comcast ain't she?After she allowed the nbc/comcast merger?Then after she whined about how hard and trouble some it was to do the merger how the laws was.

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RE: Why?

By Trisped on 5/24/2012 1:44:48 AM , Rating: 2

Sounds stupid to me. The real costs are in the lines. It costs a set amount to provide bandwidth over the last mile, and a set amount to connect all the hubs.

If everyone wants a 100Mbps connection that is easy enough to do. If everyone wants to use their 100Mbps connection at full speed from 9-10PM that is not so easy, as the connected hubs have to have VERY large network connections to make that work.

As a result, there are only three payment systems that make sense to me, flat rate, bandwidth which adjust by time of day (so low use times are less and high use times are more), or a combination.

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RE: Why?

By mcnabney on 5/24/2012 9:38:35 AM , Rating: 2

How about dropping all plans by $5/mo and then charging $0.05/GB (double their actual cost) for usage. Low users will save while heavy users (Netflix & Bittorrent) will pay more.

That would be fair. However, I think the greedy bastards just want to add a $1/GB (40x their actual cost) charge.

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RE: Why?

By XZerg on 5/24/2012 8:25:45 AM , Rating: 2

These FCC bozos need to be investigated for "insider trading" for having personal interest in these telecoms and isps. Many policies they "agree" to are more of a "what can I do to benefit my financial interest - 'legally'".

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RE: Why?

By km9v on 5/24/2012 10:00:27 AM , Rating: 2

Metered bandwidth is a bad idea. It creates bandwidth anxiety & will have a negative impact on overall usage & eCommerce. Bad idea.

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What?

By kjboughton on 5/23/2012 10:18:33 PM , Rating: 2

Since when is it some unelected government agency's job to mandate business pricing schemes?

Have we all gone crazy? Is this really the type of power we envisioned would be given to the FCC?

Are we all ready to agree yet that the federal government has way, way overstepped their bounds?

RE: What?

By mfenn on 5/23/2012 11:22:18 PM , Rating: 2

Chill out. Where in the article does it say that the FCC "mandating" pricing schemes? The FCC chairman is just expressing his opinion (wrong or not) that usage-based pricing would be beneficial to the industry.

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RE: What?

By BAFrayd on 5/24/2012 4:43:13 AM , Rating: 5

Don't be naive. A big government bureaucrat like Genachowski doesn't casually "express his opinion" on matters of this magnitude at a major trade convention. Everything that comes out of his mouth at an event like this is clearly calculated to push an agenda.

NOT a coincidence that Comcast just announced that they want to put into practice an internet data policy that is obviously designed to kill cheap streaming video over the internet, in an effort to save their core business of cable TV providership.

Genachowski is a shill. Plain and simple. Don't be surprised if he shows up in a nice big-dollar cushy job at Comcast or some cable-provider lobby when his temporary government position comes to and end.

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RE: What?

By knutjb on 5/24/2012 9:38:49 AM , Rating: 3

This is how they do it. They throw it out in a casual comment and if congress or the public doesn't question it you will see it in a year or so. Not to mention the new fees to properly fund the oversight required to protect the public from unscrupulous providers. If you think that they don't have some rules already written up for this you trust your government a little too much.

What this will do is limit access and increase prices. How will they track it? Now they will have watch everything you do to make sure they are "charging you correctly." This is disturbing. Big brother will now have the providers doing their dirty work. I don't see any real benefit to the end user no matter how they market it.

I don't see this the same as the speed I choose to purchase. This is like the recent elimination of unlimited data plans from phone providers.

The more the bureaucrats do what they think is best the worse they make it for all of us. If they were so great at it Solyndra wouldn't have failed.

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Hey Genachowski

By Kyuu on 5/24/2012 4:26:25 AM , Rating: 3

Two words for you: suck it.

That's a terrible freaking model for internet access. That kind of crap only rewards telcos for not investing their profits into improving their networks to handle the traffic that they're selling to customers, but instead sitting on it to make stockholders happy and get upper management their nice, fat bonuses.

my two cents

By NellyFromMA on 5/24/2012 8:46:35 AM , Rating: 3

Since the US Telecom industry is basically anti-competitive in nature, THAT is the huge sap in efficiency among telecom providers. No, instead, they are allowed to build unsustainable infrastrctures and then push the costs to upgrade onto consumers while also blaiming those consumers for over-consumption.

Little by little, the PC-era is surely on its way out in the next 10 years. SaaS and metered internet are great from a technology stand point and a corporate stand-point, but it will without a doubt harm enthusiast consumers which will in turn affect both youth and general interest in technology which is a shame because over the past two decades we've seen some really great stories and it was all due to the accessibility of tech and the internet.

Oh well.

Software updates

By GruntboyX on 5/23/2012 10:36:59 PM , Rating: 2

I don't mind as long as I have a window to download my software updates. I wont use my precious gigabytes just to download a windows service pack. I'll even start to download apps less and less. Not to mention that it will basically kill online video

What about this idea?

By erikstarcher on 5/24/2012 2:57:44 PM , Rating: 2

Wouldn't it be better to just equally divide the available bandwidth by the number of people using it? If only one person is online than they have the full bandwidth, if 20 people are using it than everyone only gets 1/20 of the total available. That way when the traffic is lite, no one suffers, and when everyone wants to use it, everyone has the same speed. Bitorrent-ing, youtobe-ing, or e-mailing, everyone gets an equal share. It won't mater what you are doing, you won't effect the speed of your neighbor more than he will effect your speed. Everyone pays the same, everyone has the same available.

Another Obama Apointee....first Gas prices are NOT high enough...

By GotThumbs on 5/24/2012 9:30:19 AM , Rating: 1

I already dumped Comcast as my cable provider. I'm only using them for internet as they are the ONLY Cable internet provider and DSL is a joke. I'm tired of being over charged at every corner. In Europe...do they get this kind of internet high-jacking? I believe many European countries have faster bandwidth than the US.

Though this is NOT a political forum....

I can't say I'm surprised.

More and more each day...other countries appear to actually be free'r nations than the US.

Very disappointing. God help us is Obama gets a second term...then the handcuffs will come off.

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