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Policy + charging

Rogers Takes Internet Meter to the Masses

Educating the masses
Because of the service's historical all-you-can-eat model, most cable modem customers probably aren't aware of how much bandwidth they're consuming, largely because they haven't had to track their own usage until now. And, for most customers who are subject to these new policies, they still won't have to worry much, because they'll be safely under the threshold.

But, in preparation for policy enforcement, Rogers has been keeping all customers up to speed on their usage, informing users about their monthly data download volumes, how it lines up with their existing tier of service, and, if they're above the limit, how much they would be charged under the upcoming billing plan.

Rogers has also launched a micro-site to demonstrate what a customer could expect to do before encroaching on the consumption thresholds. Those on the flagship Express tier, for example, could expect to download 15,400 songs or 15 "high-quality" movies without exceeding the cap. The MSO has also introduced a Web-based tool that allows registered customers to track their usage at any given time.

Rogers is using an electronic bulletin system from PerfTech Inc. that notifies customers when they have reached 75 percent and 100 percent of their monthly allowance. Rogers and the vendor insist the bulletins do not interfere with Web sessions, but customers can opt out of them if they wish. The opt-out rate to date is less than 10 percent.

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"Quite frankly, not all customers really know or understand what consumption is all about, so we have to step up that notification," Hartling says. "We've taken quite a few steps from a communications perspective to inform customers."

Although there's been a strong, negative reaction to Time Warner Cable's test in Texas, mostly based on the MSO's relatively small caps, Rogers believes it has taken the steps necessary to avoid a big backlash.

"I think you get the reaction you plan for," Hartling says. "Coming into the period we start billing, we're quite comfortable that we've done the right things to inform and educate customers and that customers are quite well prepared."

Rogers won't say what percentage of its customers routinely go over the established usage allowances, but it's more than likely the carrier knows who they are by now. "They [the power users] kind of get it. It's really the masses that we're aimed at in terms of our strategy," Hartling explains.

— Jeff Baumgartner, Site Editor, Cable Digital News

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rjmcmahon 12/5/2012 | 3:38:58 PM
re: Rogers Takes Internet Meter to the Masses re: "I was not big into cell phones in the late 90s, but I remember it was incredibly expensive to get plans with a reasonable amount of minutes and then it was painfully expensive when you went over. And back then no one thought they would displace a POTS line to the home. Take a look at what competition has done today."

Well, this analysis is very poor and the claim that competition has driven mobile prices lower is completely wrong. What caused mobile prices to decrease is that providers are motivated to maximize their profits. In a cellular network the marginal cost vs. marginal revenues drives the decision making and not competition.

http://en.wikipedia.org/wiki/P...

For each unit sold, marginal profit equals marginal revenue minus marginal cost. Then, if marginal revenue is greater than marginal cost, marginal profit is positive, and if marginal revenue is less than marginal cost, marginal profit is negative. When marginal revenue equals marginal cost, marginal profit is zero. Since total profit increases when marginal profit is positive and total profit decreases when marginal profit is negative, it must reach a maximum where marginal profit is zero - or where marginal cost equals marginal revenue.

Since the marginal costs to add a new subscriber is very small and marginal revenue significantly larger (and the early adopters paid for the build out) the perceived price decreases were not related to competition in anyway but rather to the economics described above. It's also what has driven consolidation of the industry. (Note: competition drives profits to zero which hasn't been the case at all.)
nodak 12/5/2012 | 3:39:03 PM
re: Rogers Takes Internet Meter to the Masses I was not big into cell phones in the late 90s, but I remember it was incredibly expensive to get plans with a reasonable amount of minutes and then it was painfully expensive when you went over. And back then no one thought they would displace a POTS line to the home. Take a look at what competition has done today. Operators are offering more minutes for less, roll over minutes, and now the first unlimited minutes plans are coming out. A lot of people no longer have a POTS line at the house, or it was an after thought in some package deal. Back to my Yahoo analogy, I remember when it was 10M storage limit for about 6 years when suddenly GMAIL trials came along with a much higher limit. Even while it was in limited user beta trials, Yahoo started raising their limits to stay competitive, and now it is 1G plus. Same thing will happen with these caps. The $/G cap will become a differentiator and with mobile operators trying to get a piece of the pie, it will force network upgrades and cap increases.

I know this goes against the grain, but I would rather have a slower speed connection and no cap versus a higher speed and a cap. I supposedly have a 6M download speed, but I am lucky if I hit a 1/2M now because something in the middle or at the far end (such as a "free" slow download vs. paid download service) throttles the connection. Providers need to get away from this nickel and dime airline model and price the service accordingly.

And RJ, as far as illegal downloads go, they are not going to stop. If anything, people will start trying to work out ways of defeating the monitoring software. No matter how hard you try to protect something, there will always be a few people who will attempt (and probably succeed) in defeating that protection just for the bragging rights. It is an endless cycle that will not change. Just ask Microsoft.
Gabriel Brown 12/5/2012 | 3:39:03 PM
re: Rogers Takes Internet Meter to the Masses Data caps are allowing mobile broadband providers to take their services down-market very rapidly.

You can get a 1GB/month service for just -ú5 ($10) on 3 UK, so long as you take their voice service.

ItGÇÖs not a huge amount of data, but enough for email, web, etc. It makes it affordable alongside a fixed broadband connection, rather than instead of.
gbennett 12/5/2012 | 3:39:04 PM
re: Rogers Takes Internet Meter to the Masses Comrades,
Not sure how mobile data is marketed in the US, but one of the more popular services in the UK is from Vodafone, and they're very clear that there are download limits. Specifically it's 3GB per month for 15 pounds, and 5GB for 25 pounds.

I use this service when I'm on the road and it's pretty good. 3G access is common in the major cities around Europe, so I get 3Mbps or even 7Mbps. This is fine for email and "normal" web browsing.

Cheers,
Geoff
miar70 12/5/2012 | 3:39:05 PM
re: Rogers Takes Internet Meter to the Masses We've had caps for quite some time in Canada. Bell was the only one holding out, but that was mainly because they had slow DSL lines and needed a differentiator, but even at 1-3Mb/s they started to feel the pain of 24/7 transfer. They have moved to a capped model recently.

Reality is that it's inevitable. For those holding out hope that the cellular providers are coming to your rescue, consider that they use the fixed networks for their backhaul, so it will not get any cheaper than 1.50/GB anytime soon. Those wireless unlimited plans, mostly come with some 'reasonable limit' which in the case of Vodafone's 7.2 Mb/s service is 5GB/month.

Sprint has an unlimited plan and yes they have a few subscribers that are costing them thousands dollars / month in back haul costs. You can expect that to change in line with the other cellular providers and 5GB seems to be the number which is significantly less than the ~100GB you get with your fixed subscription.
http://www.intomobile.com/2008...

and for those south of the border wondering what it is like to be a subscriber of Rogers, a quick browse here should incite the right 'feelings'...
http://wirelessnorth.ca/2008/0...

Pete Baldwin 12/5/2012 | 3:39:05 PM
re: Rogers Takes Internet Meter to the Masses >It is odd Internet providers are going in the opposite direction of mobile operators...

Are they? Mobile guys look like they might end up with caps too:

"...several operators have now capped usage at 5 GBytes a month. Why? Because the GÇ£tailGÇ¥ of the subscriber load ...is now in the tens of gigabytes a month for some users, or, for more wacky users, even north of 50 GB a month."

http://www.unstrung.com/blog.a...
rjmcmahon 12/5/2012 | 3:39:05 PM
re: Rogers Takes Internet Meter to the Masses re: "One last question: how long before TWC starts losing customers to the local Baby Bell who does not currently have a cap?"

If the customers that are defecting are free loaders and intellectual property thieves maybe it's not a big loss to a media conglomerate? Baby Bells will effectively be out of the media distribution business unless they can guarantee things like broadcasting rights. It's really not much different than the evolution of over the air radio and TV where, at the end of the day, rights were enforced and only then did a viable business model find it's equilibrium.
spelurker 12/5/2012 | 3:39:06 PM
re: Rogers Takes Internet Meter to the Masses How upset are customers really going to get? 99% of them are not going to hit their caps. I think it will hit those MSOs when signing up new subscribers who have the choice between a simple plan and one that's a little difficult to understand (I couldn't tell you how much I download in a billing period)

I don't see mobile providers' behavior to be a good indication of what an MSO should do. Mobile providers don't have the same network issues -- telephony bandwidth is well understood and well constrained [1 phone will never use more than 1 DS0 of voice bandwidth], and a cell phone is hardly a reasonable platform to download a hi-def netflix video to. Also, very few consumers consider mobile internet to be a viable alternative to a broadband landline.

I think upload limits are probably more helpful than download limits for a cable shop, due to the way those networks run, but I disagree with the UPS analogy -- the internet is essentially a system where the end user pulls data from network servers. Since end user nodes can get assigned floating domain names, a server push model is not very practical.
thebulk 12/5/2012 | 3:39:07 PM
re: Rogers Takes Internet Meter to the Masses you bring up a good point, wireless providers have been improving there networks, and if they continue to do so they could offer an unlimited plan and pull customers away from the big MSOs.

if the current big providers do not watch there step they could end up alienating there customers; and that is never a good thing for a business.....
nodak 12/5/2012 | 3:39:08 PM
re: Rogers Takes Internet Meter to the Masses It is odd Internet providers are going in the opposite direction of mobile operators (and for that matter email providers like Yahoo, MSN and Google). While the mobile operators are busy trying to provide you more minutes/data access, ISPs are trying to cap it. How long are these caps really going to last? If people can turn to mobile networks for unlimited data transfer, don't you think the local Baby Bell and the local cable provider will have to react to avoid losing customers?

One last question: how long before TWC starts losing customers to the local Baby Bell who does not currently have a cap?
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