Does Cablevision's Uncapped 101-Meg Tier Mean Metered Billing Is Dead?

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No, even if the folks at Free Press think it does.

Cablevision is getting up in FiOS’s face with a DOCSIS 3.0-based service that promises 101 Mbps downstream — letting the cable operator, for now anyway, brag about having the fastest broadband in the nation (albeit with a comparatively paltry 15 Mbps upstream).

Anyway, Cablevision is making this huge amount of bandwidth available for a flat rate of $99.95 per month, and without any kind of usage caps.

At the Cable Show earlier this month, Cablevision’s Jim Blackley said the MSO has no plans to implement consumption-based pricing: “We literally don’t want consumers to think about how they’re consuming high-speed services. It’s a pretty powerful drug and we want people to use more and more of it.” (See Broadband Junkies.)

Meanwhile, there’s the brouhaha over Time Warner Cable’s proposed usage caps and pay-per-gigabyte plans, which the company suspended April 16 after the issue was threatening to become a federal case.

Free Press, the consumer-advocacy group, links these events and suggests that Cablevision’s uncapped 101-Mbps tier “puts an end” to the “bandwidth bogeyman.”

Cablevision’s introduction of the service raises the question of “why Cablevision can offer fast access with reportedly no caps or overage fees, when others claim such a plan would cause the sky to fall and an exaflood to break the Internet,” Free Press’ S. Derek Turner said in a statement.

First off,it should be self-evident that different companies decide to price and package services differently, based on a number of different factors.

Cablevision is looking to hold on to subscribers in the face of the FiOS marketing machine, and it may be willing to (for now) absorb higher operating costs to retain/attract subscribers who might be tempted by the fiber-to-the-home pitch. Note that Verizon is hawking a triple-play for $99/mo. — aimed squarely at cable. (See Verizon Targets Cable Customers With $99 FiOS Promo.)

But, the all-you-can-eaters might wonder, isn’t the fact that Time Warner Cable was going to test these metered plans in four non-FiOS markets proof that usage-based pricing was anti-consumer price-gouging?

Well — no. The DSL services in those markets still would have (most likely) continued to offer unlimited, flat-rate plans. Slower than cable, but still unlimited.

My guess is that Cablevision recognizes that even talking about capping usage (again: for now, given its unusually competitive situation) is a third rail they don’t want to touch. This, I think, will change in the years ahead once the number of extremely heavy Internet users becomes big enough to make usage-based tiers the only fair and reasonable option. (And, of course, after other service providers in the U.S. successfully introduce the concept.)

Even Verizon, which has delighted in touting its uncapped FiOS Internet services, has not ruled out usage-based pricing.

Broadband “is a competitive market and pricing packages and offerings are an important part of the market,” Link Hoewing, the telco’s assistant VP of Internet and technology issues, wrote in a blog post last week. “Companies can try different pricing approaches and consumers will decide what they think. I can see ways that usage packages could be priced that could really help many segments of the market, such as low level users. I can’t predict what will happen in the future as the market evolves.”

In short, Cablevision’s current offer does nothing to change my suspicion that consumption-based pricing for Internet services is inevitable. This issue also came up at the American Cable Association conference today — see ACA Summit: Metered Bandwidth Pricing Is Coming.

Listen, as a consumer, I’m not thrilled to consider the possibility that my broadband access will be metered.

Just as I hate paying an extra $15 to check a bag with most airlines these days. Don’t even get me started on the Ticketmaster “convenience fees.”

But I understand that businesses need to recover their costs, in order to continue providing the services they do. How can anyone disagree that a person who uses more of a finite resource should have to pay more for the privilege?

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