AT&T Set to Trial Usage-based Internet Pricing
Posted: Mon Jun 09, 2008 2:01 pm
AT&T Set to Trial Usage-based Internet Pricing This Fall
by: Shane McGlaun
AT&T says it's not an attempt to make more money
As online movie rentals and video streaming services are starting to boom in popularity, one aspect of these services that many users don’t think of is the bandwidth needed by the ISP providing the internet connectivity.
John Donovan, AT&T chief technical officer, has indicated that AT&T will begin testing usage-based internet pricing starting this fall. Donovan asserts that the tests of usage-based pricing is not an attempt to make more money, but is simply required to add more network capacity.
Donovan told Wired.com in an interview, “It's almost a taxation issue. Traffic on our backbone is growing 60 percent per year, but our revenue is not.” From that simple statement it’s hard to support Donovan’s previous claim that the testing of usage-based Internet pricing isn’t an attempt to make more money from its users.
Donovan says that usage-based pricing trials are an attempt to encourage more efficient use of a customer’s bandwidth capacity. To a users that may simply sound like another way to say the ability to punish heavy bandwidth users.
Donovan mirrors statements made by Time Warner when it tried to justify the abhorrent new usage-base pricing of its trial in Beaumont, Texas with regards to the small percentage of customers that use the majority of its bandwidth.
According to Donovan, 1% of AT&T customers account for 20% of its network usage and the top 5% of its users account for 40% of its usage. The problem with statements like these is that most internet users know many subscribers simply don’t use the internet that much. If you take into account a customer that simply sends and receives email and surfs the occasional webpage compared to the customer who watches streaming shows on Hulu or rents movies on Apple TV is doesn’t seem like a fair comparison.
Maybe only 5% of AT&T’s customers actually use their connection frequently. The rub for many users is that it seems AT&T and other internet providers are simply trying to find ways to get people to use what they pay for with less frequency.
Donovan does point out that he doesn’t view AT&T customers, under any circumstances as pirates. AT&T declined to comment on pricing or bandwidth caps for its usage-based service trials or in what markets the trials would begin.
by: Shane McGlaun
AT&T says it's not an attempt to make more money
As online movie rentals and video streaming services are starting to boom in popularity, one aspect of these services that many users don’t think of is the bandwidth needed by the ISP providing the internet connectivity.
John Donovan, AT&T chief technical officer, has indicated that AT&T will begin testing usage-based internet pricing starting this fall. Donovan asserts that the tests of usage-based pricing is not an attempt to make more money, but is simply required to add more network capacity.
Donovan told Wired.com in an interview, “It's almost a taxation issue. Traffic on our backbone is growing 60 percent per year, but our revenue is not.” From that simple statement it’s hard to support Donovan’s previous claim that the testing of usage-based Internet pricing isn’t an attempt to make more money from its users.
Donovan says that usage-based pricing trials are an attempt to encourage more efficient use of a customer’s bandwidth capacity. To a users that may simply sound like another way to say the ability to punish heavy bandwidth users.
Donovan mirrors statements made by Time Warner when it tried to justify the abhorrent new usage-base pricing of its trial in Beaumont, Texas with regards to the small percentage of customers that use the majority of its bandwidth.
According to Donovan, 1% of AT&T customers account for 20% of its network usage and the top 5% of its users account for 40% of its usage. The problem with statements like these is that most internet users know many subscribers simply don’t use the internet that much. If you take into account a customer that simply sends and receives email and surfs the occasional webpage compared to the customer who watches streaming shows on Hulu or rents movies on Apple TV is doesn’t seem like a fair comparison.
Maybe only 5% of AT&T’s customers actually use their connection frequently. The rub for many users is that it seems AT&T and other internet providers are simply trying to find ways to get people to use what they pay for with less frequency.
Donovan does point out that he doesn’t view AT&T customers, under any circumstances as pirates. AT&T declined to comment on pricing or bandwidth caps for its usage-based service trials or in what markets the trials would begin.