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Verizon CTO Argues For Metered Pricing 99

Posted by kdawson
from the what-happened-to-all-that-fiber dept.
CNet is reporting on a press conference and speech given by Verizon's CTO, Dick Lynch, at the FTTH Conference & Expo in Houston, in which he advocated for metered broadband pricing. "Lynch said during that press conference according to reports that in the future broadband service will likely be sold in packages based on how much bandwidth a person consumes. This metered approach is similar to how the wireless industry has operated. ... 'We're going to have to consider pricing structures that allow us to sell packages of bytes, and at the end of the day the concept of a flat-rate infinitely expandable service is unachievable,' GigaOm quoted him as saying. ... Lynch didn't say that Verizon had metered broadband plans in the works today. And he was quick to point out that the company is not shifting its pricing, But he did say that he hoped the that the Federal Communication Commission's plans to make Net neutrality principles formal regulation would not hurt broadband providers' ability to offer such premium bandwidth offerings, Telephony Online reported."
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Verizon CTO Argues For Metered Pricing

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  • Horrible idea... (Score:3, Insightful)

    by ImYourVirus (1443523) on Wednesday September 30, 2009 @01:25AM (#29589579)
    Sounds like a good way to kill, just about everything one would use for entertainment on the web, streaming videos, games, etc etc

    I know this has been talked about before by other providers, but it's still a bad idea for the end user. Just yet another way for them to offer less and make more money, typical corporate greed mongering, nothing more.
    • by masshuu (1260516)

      Yeah, talk about huge fucking bill when Blizzard makes a patch for WoW
      "wait what, o, yay, 2 gigabyte download again, that means ill only 1 gig left before i cross the $60 mark. Well at least its no fap September, thats saving me money"

      So if they do this, customers who watch lots of streaming "Media" or play online games 24/7 will probably not move over to the dynamic price. But the people who do move over will probably be the people who don't use any bandwidth, or are easily swayed by advertisements (But yo

    • by pha3r0 (1210530)

      first off the the obvious. if you go with this plan they will literally lynch your dick

      secondly and more seriously who the hell (with a brain) thinks following the power companies pricing structure is a sound business practice unless you have the guys dick in a noose.

    • by kestasjk (933987) * on Wednesday September 30, 2009 @02:15AM (#29589817) Homepage
      Actually I disagree. I think it's crazy that I pay per KWh of electical power I use, I pay per minute of phone time I spent, I pay per BTU (or is it volume?) of natural gas I use, I pay per liter of petrol I use, etc, etc...

      But with bandwidth I pay for a certain number of GB/month, and I get throttled if I go above that. What if I want to use a little more, or a little less? There's this bizarre situation with bandwidth where, to make the most out of what I pay for, I have to always keep tabs on how long before my quota resets, and how much I've downloaded.
      I have to try and guess in advance what I'll use, and so inevitably either end up paying for more than I need or get less than I want.

      Imagine if you had a certain distance you could travel in your car per month, or you had a certain amount of power/water/gas/phone time you could use, and you lost out if you didn't use exactly your allocated amount; it'd be madness.

      I think the reason providers aren't rushing to implement this is because they know they'd make less money; because people would stop buying more than they need. Either that or because they think (perhaps rightly so) that the average consumer wouldn't understand the concept of paying per unit of data (why iPod storage is advertised in terms of the dubious "song" or "movie"), but I think that'll change as time goes on.

      Personally I hope metered pricing comes as soon as possible.
      • Re:Horrible idea... (Score:5, Interesting)

        by kestasjk (933987) * on Wednesday September 30, 2009 @02:18AM (#29589829) Homepage
        Also I think doing things this way will make consumers more aware of how insane the cell network prices are. "What, I'm paying 0.25c/text? But a text is a couple hundred bytes and I pay a millionth of a cent for that at home." Wherever an ISP also runs a cell network they won't like this prospect.
        • Re: (Score:3, Insightful)

          by snookums (48954)

          Please stop with the "$/byte" calculations for SMS. It's not a data channel, it's a messaging service. It costs 55c or whatever to send a letter in the post. If you write a short letter to your grandma it costs a silly amount per byte too.

          If it irks you, get a phone with Internet and send email.

          • by kestasjk (933987) *
            I do understand that my analogy isn't right because it costs more (I would guess) to maintain wireless connections for everyone over a wide area than to maintain a wired connection to a single person, but a digital message is digital data. It does irk me, but I think the reason it doesn't irk most is that they don't equate e-mail with messages or voip with phone, so they don't ask why data transmitted one way costs so much more than data transmitted another way.

            Because of this they don't get a phone with
          • oh, sorry, you're right. We, the consumers, should be charged outrageous prices because the phone companies implemented their system very poorly, and use that as an excuse for charging so much.

          • by Zencyde (850968)
            But that 55 cents is being used to pay the people that sort it, carry the letter, etc. Those SMS messages are being tacked on to a part of the protocol that wasn't even in use. In short, it costs them NOTHING extra (mild power costs?) to send your "lol no u?" That's where the issue lies on this one, sir.
          • by vegiVamp (518171)
            And if you send your grandma a ten-page letter,you'll pay more, too.
      • Re: (Score:2, Insightful)

        by tagno25 (1518033)

        Actually I disagree. I think it's crazy that I pay per KWh of electical power I use, I pay per minute of phone time I spent, I pay per BTU (or is it volume?) of natural gas I use, I pay per liter of petrol I use, etc, etc...

        You are actually consuming those services, where as data is not really consumed, it is not gone/used up when you are done, there is still a virtually unlimited amount (as long at there is electricity there can be data).

        • Re:Horrible idea... (Score:5, Informative)

          by snookums (48954) on Wednesday September 30, 2009 @02:46AM (#29589943)

          You are actually consuming those services, where as data is not really consumed, it is not gone/used up when you are done, there is still a virtually unlimited amount (as long at there is electricity there can be data).

          No. The capacity of the network at any given time is finite. You are using a fraction of that available bandwith for some period of time.

          Bandwidth x Time = Bytes Transferred.

          • No. The capacity of the network at any given time is finite. You are using a fraction of that available bandwith for some period of time.

            Bandwidth x Time = Bytes Transferred.

            The difference is that bandwidth that isn't used is wasted, so the ideal situation is 100% utilization (yes, I know that in reality you get better utilization with less than 100% saturation). For something like fuel, whatever doesn't get used by the end of the day can be used the next day instead.

          • by vegiVamp (518171)
            Correct. So, it would actually be a good idea to multiply a portion of the price per byte with the fraction of usage in the pipe at that time.

            Say an MB of transfer costs you 15 cent. Of that, there's 5 cent fixed price (infrastructure et al). If the pipe is only used 10%, at night for example, your MB will cost you 5 + 10 * 0.1 = 6 cents.
            If you want to transfer that MB during lunch hour, when everyone is surfing and the pipe is 95% full, it'll cost you 5 + 10 * 0.95 = 14.5 cents.

            Yes, I realise this is hell
          • No. The capacity of the network at any given time is finite. You are using a fraction of that available bandwith for some period of time.

            Bandwidth x Time = Bytes Transferred.

            And that's why you pay for bandwidth, you pay for a slice of the network capacity to use as you wish. You pay for the resource that is limited, bandwidth, not the unlimited one, data.

          • True. But Capacity - Used Bandwidth = Unused Bandwidth. Unused Bandwidth = Wasted Capacity.

            Disclaimer: I own a hosting/infrastructure company, and encourage my customers to use all the bandwidth we give them, and try to provide more as cost-effectively as possible.

      • Re: (Score:2, Interesting)

        by mrbill1234 (715607)

        You can't compare bandwidth which is 100% recycled electrons to electricity or gas which is a finite resource subject to the pricing of the open market.

        Electricity doesn't have anything remotely like Moore's Law - whereas bandwidth availability will most probably continue to expand in line with moore's law.

        The statement by the Verizon CTO is just him thinking of ways to squeeze more money out of his customers.

      • I think it's less than 5% of ISP customers who download a lot. The ISPs switching to charging per gigabyte downloaded would maybe get more money from the 5% powerusers, but the 95% who only use it to check their email and maybe get rickroll'd will be paying so much less that it won't ever be worth it.
        • the 95% who only use it to check their email and maybe get rickroll'd will be paying so much less that it won't ever be worth it.

          I'm hoping that this was an attempt at humor, because you have a lot to learn about the world if you honestly think they'll ever charge less for those 95%.

      • iPod storage ads (Score:3, Informative)

        by anomaly (15035)

        iPod storage is advertised in terms of "song" and "movie" because normals don't know (or care) about bytes!

        Apple sold their "inferior" device to zillions of people who don't care about how it's technically "less good" than other options, because they value things other than specifications - ease of use, style, etc. Those are valid selection criteria, even if *you* don't value them, obviously the market *does.*

        Consumers on the whole will never understand nor care about "data". They will care about music an

      • by trawg (308495)

        Actually I disagree. I think it's crazy that I pay per KWh of electical power I use, I pay per minute of phone time I spent, I pay per BTU (or is it volume?) of natural gas I use, I pay per liter of petrol I use, etc, etc...

        I guess it's partly because it's quite easy to use orders of magnitude more bandwidth than you intend in very short periods of time without being aware of it. A Windows update might suck down a couple hundred megs. A software glitch might cause something to get auto-downloaded a hundred times in an hour before it completes properly. A non-tech-savvy user might leave a torrent running for 3 days unaware that he's uploading gigabytes a day.

        With all those other things though its quite a bit harder to use mass

      • I remember when dial up was priced per hour. Competition slowly and inevitably drove the price down further and further, and then some companies offered unlimited dial up at a fixed price. A few even offered unlimited monthly dial up for free !
        ( NetZero, Surfree, and that little ISP in my hometown, and in hometowns across the country. to name but a few of the inexpensive dial up options that appeared. And that are even now out there, still, to this day ). And they still do a decent business.

        So yes, Verizon,

    • by snookums (48954)

      As someone who's lived with transfer limits for some time, I really don't see this as anything but unavoidable in a mature market. We all know that a connection advertised as "8 Mbps" cannot be used at that capacity by all subscribers at all times. It's an 8 Mbps burstable link, but with no indication of what the sustained capacity is. For home use it makes little sense to the consumer to quote a sustained transfer rate, because home users are rarely using data in a slow steady stream. Rather, it's makes mo

      • by shmlco (594907)

        "Most of the time, when people object to metered usage it's because they're in the top 1% of users, and want to continue being subsidized by others."

        Or to translate: BitTorrent parasites.

    • Re: (Score:3, Insightful)

      by beelsebob (529313)

      It sounds perfect actually. Gone are the days of broadband companies complaining that you're breaking their fair use policy. Gone are the days of broadband companies complaining about the BBC iPlayer. Gone are the days of broadband companies complaining about torrenting (legally ofc).

      We pay for exactly what we get: bandwidth.
      They stop complaining when we use it.

      It's absolutely, 100% perfect!

    • by Starayo (989319)

      Sounds like a good way to kill, just about everything one would use for entertainment on the web, streaming videos, games, etc etc

      Welcome to the rest of the world, we don't have unlimited net. Which is exactly why cloud gaming like OnLive seems pretty stupid to me outside of the US.

    • Sounds like a good way to kill, just about everything one would use for entertainment on the web, streaming videos, games, etc etc

      Consider the folks who can't afford a premium cable modem fee and so don't watch HD video streams at all. Now consider a service with a $10/mo connection fee, 20GB included, and 10 cents per GB after that. The average person facing the Comcast 250GB throttle would instead be paying $35/mo. Watching a movie on Netflix would cost about 15 cents. This seems very reasonable.

      Cha

      • As a side effect the heavy bloated sites would cost more to visit. So there will be an incentive for the web developers / designers to reduce the size of their sites.

        If the pricing is reasonable it wouldn't be so bad. But as we already know the pricing won't be reasonable so...

        Another nice side effect is that it also would be much harder for ISP to oversell because you can always find something else to download to use your paid for bytes.

        • If the pricing is reasonable it wouldn't be so bad. But as we already know the pricing won't be reasonable so...

          This is where the monopoly part gets tricky. I'm not yet convinced about whether transit and last-mile ought to be the same provider or not.

          Another nice side effect is that it also would be much harder for ISP to oversell because you can always find something else to download to use your paid for bytes.

          I understand the words in your sentence, but could you clarify why it would be harder to overse

          • I understand the words in your sentence, but could you clarify why it would be harder to oversell? They ought to be encouraging people to download more, and have the infrastructure to enable profit.

            Because the amount of data to download is really huge and we always seem to find new ways to use more. Think about hard disks, every time we get a new, bigger one, we think is enough but after a few months its full.

            Now they have a limited amount of bandwidth, if you sum up the bandwidth they sell to all their customers you get more bandwidth than what they have because they oversell. With data there is no limited supply. The limit is in the speed

            Now we pay for something we don't use, we pay for a connection

  • Pay Per Byte (Score:2, Informative)

    by kikusz (1564701)
    That's why ISPs offer different plans... Slower with limits.... high-speed with limits and unlimited with basically double-price of slower and they still wanna make more... In the end they wanna turn everyone into cash-cows... Whats the point of having websites like youtube and what not if one can't even use it afraid of having to pay more?
  • I can see the verizon dude now going.. Can you count the bytes now?..... Good....
  • I tried to put some quarters in my modem, but couldn't get any more bandwidth?! Come on, Verizon, make good on your word!
  • If I'm paying for bytes, I'd like guaranteed rates to start with. I'd also like to speak with at least marginally competent staff when a problem occurs.

    I would also assume that my lower bound on my bill is not going to be less than I'm paying right now since these are only going to be options if it will make them more money than any additional billing/administrative overhead will cost. Assuming I'm paying at least as much as I am now, then where is the added benefit for this 'service'?
  • Several of the upper-tier ISPs in the UK already operate on this pattern.

    For example Andrews & Arnold offers 2GB peak ( 0900 - 1800 ) allowance as the basis and then charges 6UKP for each increment of 2GB used beyond this. IDNet has several base levels ( mine is 10GB peak ) and charges 1UKP per GB excess. Off-peak basic allowances are more generous but have the same excess charging model.

    This permits the ISP to offer unthrottled, lower-contention Internet access to its customers. Yes, it is an

    • by cawpin (875453)
      That's the problem here. They want to meter speed AND amount. They can't have both. They've been given billions of dollars to build a network, I pay too much for the speed i get already and now they want to make me pay more for the AMOUNT of data I use? I think not.
    • Well that's stupid I would go over that in a week just in tv shows I watch (the 10gb that is), easy, not to mention playing games, youtube, email, and whatever else comes to mind during the day/week/month. I mean if the cap was something 'reasonable' like several hundred gigs then it would not be such a big deal, I mean I'd rather go dial up for those kinds or stupid pricing, I could probably get several times those limits a week on dial up alone, and pay 1/5 or less than they would try to charge me, and sa
      • > I mean if the cap was something 'reasonable' like several hundred gigs then it would not be such a big deal

        Unfortunately in the UK there is a race to the bottom amongst ISPs and they just cannot afford to offer such generous allowances. For example, A&A, Titan and IDNet are considered ``rip-off expensive'' at 20UKP ( $32 ) or thereabouts per month. If they can only offer, say, 10GB and 30GB off-peak for that, what hope for the mass-market ISPs such as BT Retail at 6 UKP per month?

        I would much rat

      • Either you are intravenously hooked up to electronic equipment (and need to get out a bit more, even by slashdot standards or you have waaaaay overestimated your consumption. )

        Granted where I am quotas are standard so we're used to it but I have no problems living under a 60Gbyte cap. It lets me download two-three full games, ditto in HD movies, more SDTV movies, a few seasons of TV and more music than I can shake a stick at, and still have enough left over for general browsing and VPN to work. Oh and hosti

        • Seriously? The day I set up my HTPC I downloaded an 80 and a 60 gb torrent (one was 4 seasons of Stargate Atlantis, can't remember the other). There is no way you are downloading games, HD movies, and a couple of TV seasons and not going over 60 GB. If you maintain that you are, you must be getting the most compressed, crappiest looking video possible. I am with ImYourVirus, a reasonable cap must be several hundred GB in size.
          • Math is here

            3 games @ 6 gigabytes each = 18 gig
            3 720p mkvs @ 5gigabytes each = 15 gig
            3 seasons at xvid = 12 gigs

            total = 45 gigs, leaving 15 gigs for browsing and mp3s. Not great but more than adequate.

            And if you don't do hidef then its much more than adequate

    • by altek (119814)

      Given that this is Verizon (and every other US provider that is sure to follow suit), who says there will be a real live human on the support line? It takes about 10 levels deep of automated menus just to get to a human, then you still get transferred all over PBX hell until you get to someone who may be able to help, and usually end up getting disconnected in the process. Not to mention that VZW doesn't even staff the phones during non-business hours except for tech support. And if you finally do manage

    • by metamatic (202216)

      Except that £6 for 2GB is an utterly outrageous markup, given how much the bandwidth is costing the ISP...

  • This metered approach is similar to how the wireless industry has operated.

    Did he forget or does he not know that a wireless link (one broadcast sector) is similar to a hub where all the data goes to all the users, but only the one that asked for it uses it, so the bandwidth is shared. Where as a wire (cat3, cat5, fiber, etc) can transmit the full speed to a single user and they do not have to share bandwidth and cannot see each others data.

    They have 10+Gb/s [full-duplex] fiber and Ethernet, but the fastest PtP wireless link I have yet to see can only do around 4Gb/s [full-dupl

  • We started out with some metered services, then many small ISPs started offering connectivity at unmetered rates (they often didn't provide the services). The service providers matched the unmetered rates and many of the ISPs vanished. If they go to metered or raise the price too high, people will find another way to connect.

    This is one market where it's really tough to maintain an expensive monopoly. I say if Verizion wants to do that they should. I'll miss my FIOS, but I'll switch over to someone else

  • a company exec with a more appropriate name.
  • I live in Japan, and it only cost $60-80 USD a month to have a 100MB up & down fiber optic connection in every room of my house. I know Japan is only the size of California, but come on. Seriously, the US spends millions on beach sand [sundancevacations.com] and damn near nothing on real connections.
    • main problem is the sheer size of the US, coupled with a much older infrastructure. when you consider how cheaply the major telecoms operate in the US, and their unwillingness to use gov't subsidies to do something like actually investing in infrastructure, you know there's going to be a problem. i gather Japan has a slightly more modern infrastructure, plus an easier geographic area to cover.
      • Re: (Score:2, Interesting)

        by iCantSpell (1162581)
        That's probably the reason. You also have to factor that Japan is 90% middle class, 70% jungle, and mountains with 0% deforestation. So technically the whole country isn't really wired for the net, and everyone can afford it in the places that are wired.
      • Problem is that US telcos have received plenty of gov't. subsidies in the past for the specific purpose of expanding and building their infrastructure and the money has been wasted and not utilized for the purpose in which it was intended.
  • ... it ought to be for the right reasons. I doubt that it is this time around. Nevertheless...

    Is there anyone who honestly thinks there's something immoral about people paying specifically for what resources they actually consume, whether it's electricity, medical services, or Internet bandwidth? I'm a pretty solid socialist/consensualist, and even I think it's a very rational concept. It was once the way people paid for pretty much everything, until certain entrepreneurs discovered they could amass eve

    • Is there anyone who honestly thinks there's something immoral about people paying specifically for what resources they actually consume, whether it's electricity, medical services, or Internet bandwidth?

      You can't consume bandwidth, its a fixed amount. That is what people are confusing here. If an ISP wants to charge based on usage, that is fine, but it seems very likely they will charge on speed and usage, which is not fine. The major telecoms have been given billions in tax benefits and grants to build communications infrastructure and now they want to double dip. That is what is immoral about these ideals, not the concept of metered usage itself. If an ISP wants to sell data by the byte, they better wel

      • by macraig (621737)

        Please don't split hairs over semantics I used in one paragraph, when the others that followed make it clear I was referring to usage. We don't disagree. If the basic fee structure is to be based upon actual usage, then there should at most be a VERY small fixed monthly fee in addition; otherwise it would amount to double-dipping, as you said. OTOH, I'm very publicly on record advocating forcing all the telecom companies to give/sell ownership of the wires back to the public domain, which might be too ex

  • The harder thing ISP's need to do is set up some sort of reporting to show how much you have used up so far. Nobodies going to believe what the ISP tells them if there's no way to check themselves. Also I'd welcome something like this as long as it's per GB not something daft like per hour (and fairly cheap, aka £1 per GB max)
    • Thankfully the better ISPs already do, complete with projected usage!


      During the time period 2009-09-01 to 2009-09-29 your bandwidth use was:

      40.83 GB Download - (Peak: 9.87 GB | Off-Peak: 30.96 GB

      These figures cover 28 days. If your previous 7 days rate of usage continues for 30 days then the total for the month will be:

      40.83 GB Download - (Peak: 9.87 GB | Off-Peak: 30.96 GB)

    • Internode [on.net] (Australian ISP) does this. You can access your current usage through their website. They also provide an API for accessing the usage data. A subscriber written usage meter dock thing being the most popular way of measuring usage.

      Internode Monthly Usage Meter [on.net]

      Monthly
  • Metered pricing is used in many other places in the world. South Africa is a good example. It's just a great way for the providers to make lots of money and users to get the shaft. It limits innovation and provides zero incentive for service providers to increase capacity or quality of service.

    Once metered Internet gets it's ugly, smelly foot in the door, it's nearly impossible to make it go away. Just say no.

  • "Lynch said during that press conference according to reports that in the future wireless service will likely be sold in packages based on the speed of service a customer needs. This un-metered approach is similar to how the wired broadband industry has operated."

    Fixed it for you. I don't know if you've heard about this "iPhone" and it's unlimited data plan? The traditional model is that customers get more features for less money. We're not really interested in spending more money to get less features. Comp

  • However, now the burden of proof is on the provider part.

    This means I want detailed billing telling me exactly what you are biling me for. When the downloads took place down to the minute/second, how many bytes were transfered. Legally, if they are charging your on a per use basis, they need to be able to document everything they are billing you for.

    Dear Telco/Cableco, I'll take my 409 page printout monthly. Thanks, and enjoy the postage.
  • It seems that Mr Lynch wants to redefine bandwidth from the current meaning Verizon uses to charge more for faster connections (ie. transfer rate), to meaning usage (bytes transferred), for which they would also like to charge. In fact, it seems that all of the "providers" want to be paid for existing, and then overcharge for anyone who want to actually use their connection.

    This is the same Verizon which first dropped all binary groups from their usenet offering, because about 1% of the groups might have c

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