Policy + charging

Rogers Takes Internet Meter to the Masses

Whether you agree or disagree with recent moves by U.S. cable operators toward consumption-based Internet business models, it's becoming clear the genie is out of the bottle.

Among larger MSOs, Time Warner Cable Inc. (NYSE: TWC) is taking its first stab at it in Beaumont, Texas, while Comcast Corp. (Nasdaq: CMCSA, CMCSK) is mulling over a more generous model that would cap consumption at 250 gigabytes per month.

BendBroadband , a smaller operator in Oregon, has introduced a usage allowance of 100 gigabytes per month, charging $1.50 per gigabyte beyond that limit. Insight Communications Co. Inc. , meanwhile, has no current plans to deploy a usage-based model but has left the door open, according to a recent blog entry by Insight's CEO, Michael Wilner.

But if you're wondering which North American cable operator is leading the way, look no further than Canada's largest MSO, Rogers Communications Inc. (NYSE: RG; Toronto: RCI). As other operators develop models of their own, it's likely that they'll study the Rogers model closely and even steal an idea or two.

Rogers, which has about 1.5 million cable modem subs, initially launched an "additional use" policy (a cap of 90 gigabytes, and $1.25 per gigabyte after that) more than a year ago for its high-end, 18-Mbit/s Extreme Plus tier.

In July, following a three-month grace period, the MSO will begin enforcing a new consumption-based model across its entire high-speed Internet customer base, with different data volume caps and charges for its various Internet access packages. That new model includes a small rise in the usage limit for the MSO's Extreme Plus users, who will be able to consume 95 gigabytes of data as part of their monthly subscription package.

Although Rogers will charge its broadband users for any bandwidth consumed beyond their allotted threshold, the operator has built in a $25-per-month limit for additional payments.

"We are moving quickly from one tier and from a concept to full implementation across the entire base," says Phil Hartling, the MSO's consumer market VP. "It's a natural evolution of the [service] category, and one that treats customers fairly. It's a critical step for ISPs."

The table below outlines the new Rogers policy and how it stacks up for most of its customers.

Table 1: 'Additional use' rates for live billing*
Tier Allowance GB Rate Ceiling
Extreme Plus 95 GB $1.25 $25.00
Extreme 95 GB $1.50 $25.00
Express 60 GB $2.00 $25.00
Lite 25 GB $2.50 $25.00
Grandfathered** Lite 60 GB $2.50 Unlimited
Ultra Lite 2 GB $5.00 $25.00
Grandfathered** Ultra Lite 60 GB $5.00 Unlimited
* Starting July 3, 2008
**Customer qualifies if signed on prior to Jan. 14, 2008
Source: Rogers Communications

Customers who signed up for the operator's "Lite" or "Ultra Lite" cable modem service tiers before January 14, 2008, are "grandfathered" into the MSO's initial consumption levels. That means that they are given a higher threshold than those who have signed up since January 14. Those "grandfathered" customers will have a larger allowance, but won't get the benefit of the $25 ceiling. To Page 2

1 of 2
Next Page
<<   <   Page 2 / 2
sunfanz 12/5/2012 | 3:39:08 PM
re: Rogers Takes Internet Meter to the Masses Let's move on. Free internet has to change some how to move forward. Metered internet access with cap is the de facto in Australia since day one there is Internet.

It's just a matter of time for this to happen. There is no free lunch. Sometimes, free things on the surface may indeed be the most expensive one.
thebulk 12/5/2012 | 3:39:09 PM
re: Rogers Takes Internet Meter to the Masses I would have to say that a pay for usage model would be the best way for the provider to make money if they were indeed the only provider of the service. I can not see many subscribers being all that happy about service plans like thatGǪGǪ
rjmcmahon 12/5/2012 | 3:39:09 PM
re: Rogers Takes Internet Meter to the Masses Everyone would keep their own shared directory empty to avoid having to pay for uploads and that'll be the end of it.

Sometimes self interested and ethical behaviors align, though not always.
yarn 12/5/2012 | 3:39:10 PM
re: Rogers Takes Internet Meter to the Masses If you start charging the sender per bit using a net neutral charging model I think that would kill the P2P model overnight. Because which calculating consumer in his right mind would want to subsidize other people in getting content from their PCs? Everyone would keep their own shared directory empty to avoid having to pay for uploads and that'll be the end of it.
rjmcmahon 12/5/2012 | 3:39:10 PM
re: Rogers Takes Internet Meter to the Masses Moving to a usage based model seems like a perfectly good approach to me. Though it seems preferred if the billing party were a separate entity. Also, the idea that consumer pays for all traffic over the access network won't work well. Sender has to pay too. Imagine if UPS delivered packages only charging the recipient after dropping the package off. Advertisers would have field day and UPS trucks would be filled with garbage instead of real goods.
berty 12/5/2012 | 3:39:11 PM
re: Rogers Takes Internet Meter to the Masses Rogers have had considerable complaints about this intiative, however they know they are on safe grounds with Bell and Rogers having it all to themeselves in much of Canada. The tame regulatory authority let them do what they want with most services, as a result prices are twice as much as they are in the US. Unfortunately Canadians appear not to worry about these expensive services.

One wonders if there is a cartel between the 2 main players.

<<   <   Page 2 / 2
Sign In