AT&T warns: usage based broadband charging "inevitable"

Stuart Corner
Monday, 16 June 2008 02:03

Opinion and Analysis

The latest suggestion from a US telco, this time AT&T, that usage based charging for broadband services is "inevitable" has sparked the usual flurry of indignation and denigration of service providers, but Blind Freddy should be able to see that inevitable it is.

An AAP report on Thursday 12 June quoted AT&T spokesman Michael Coe saying: "A form of usage-based pricing for those customers who have abnormally high usage patterns is inevitable." He went on to explain that the top five percent of AT&T's DSL customers use 46 percent of the total bandwidth and that overall bandwidth use on the network is surging, doubling every year and a half. However he said that AT&T does not have any specific plans or fees to announce. Yet.

His comments follow the announcement by Time Warner Cable earlier this month that it was planning to start a trial of usage based charging, but only to new customers in one area of Texas.

Heavy individual usage of cable infrastructure has a more immediate impact on other users, and hence on investment needs because local infrastructure is shared. However th AAP report said that AT&T was concerned about congestion higher up in its DSL network. And so it should be. The growth of attractive, free or low cost video services is putting enormous demands on bandwidth and under present pricing models ISPs and telcos received no additional revenue whatsoever.

In the UK last year ISPs got upset about the BBC's new video distribution service that lets people watch recent programmes over the Internet. They claimed it was going to cost them by gobbling up bandwidth. And, in the US, the AAP report noted that DVD-by-mail pioneer Netflix had launched a TV set-top box that receives an unlimited stream of Internet video to a TV set for as little as $US8.99 per month.
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