Let’s see.

100 million potential customers…
at 50$ a month…
that’s 5 billion$ in potential revenue every month from purely internet-based revenue.

Gee, where ever could that money come from. Yeah, the telecomms are totally destitute, what with all the money we gave them to build infrastructure in the 90’s they’re now charging us to use at cartel-rates.

Please, this is the most ridiculous crap. They’re blatantly creating a scarce good on purpose. They’ll have zero incentive to create more infrastructure, because doing so devalues their good in the longrun. Come on, econ 101– this is infrastructure, not goods. This shouldn’t be left to a cartel-based free market because, much like roads and bridges, it doesn’t belong there.

Sad, sad, sad. Shocking they’ve been able to convince as many people as they have that this makes any sense at all.

If only some towns would take it on themselves to build their own network infrastructure– oh wait, the Telecos made that illegal..

If only we could build wireless networks and piggy-back off each other to– oh wait, the Telecos are making that illegal.

Um.
..um…

oh noes.

TWC has already rolled out several different packages in my area surrounding my current service (the lite and turbo versions of the service). I will just have to start looking at DSL alternatives in my area . I think that TWC can easily hurt themselves here if they dont watch how they go about doing this. Consumers need to empower themselves, and hold TWC accountable when their service is not as fast as advertised.

All in all… The idea of charging for high useage goes against the high volume marketing ads I see on TV in my area every day… “Always on. Always Ready. Always Fast! RoadRunner.” And the folks in the ads dont seem to be worried about bandwidth useage, nor do the commercials give anyone the feeling they should.

Also, every commercial they put on TV / radio states how their broadband connection allows fast download of movies, pictures, music, etc. They want to claim how good it is / how cheap their service is - a flat fee. Now when it is used, they complain. Why did they market it this way for years. They should have seen this coming.

No, I certainly don’t. This is a situation where the devil is very much in the details and we run the risk of lumping together significantly different things which likely have significantly different outcomes.

To go back to electricity. I pay $7.5 a month (for billing costs and so on) and 5 to 8 cents a kwh(depending on time of year). I would consider this true metered service. If I shut down the house I would pay $7.5 a month. If I crank the heat up in winter I might pay $150 a month. Water use is similar. No water use, no cost. Cost related to amount consumed.

If the company decided to start charging $100 minimum, regardless of use and 20c per khw above 2000kwh a month this might also be classified as a two part tariff but I hope we would agree that it is a drastically different approach and probably would lead to quite different outcomes. Suddenly the vast majority of people no longer have any real control over their costs. If I upgrade the insulation in the house there is no cost benefit. If I reduce consumption by turning back the thermostat in winter or replace appliances with more efficient models, there is no cost benefit. Neither behavioral changes nor infrastructure spending reduces cost(unless I was really squandering energy before) even though it reduces my energy consumption. In fact, as far as I can see I have no incentive to do anything other than waste energy up to the flat fee limit.

Is this the way markets are supposed to work? Aren’t we disrupting some important signals here?

The reason I posted was because I like the idea of metered service but I see a lot of people not making distinctions between what seem to be quite different approaches. I think it is a mistake to support this time warner experiment just because one supports metered service.

What I think would be most efficient and pragmatic solution is what economists call a “Ramsey two-part tariff.” A two-part tariff (or price) would involve a flat fee for service up to a certain level and then a per-unit / metered fee over a certain level.

I don’t know where the demarcation should be in terms of where the flat rate ends and the metering begins; that’s for market experimentation to sort out. But the clear advantage of this solution is that it preserves flat-rate, all-you-can-eat pricing for casual to moderate bandwidth users and only resorts to less popular metering pricing strategies when the usage is “excessive,” however that is defined.

Yes, this model has been used in other contexts, including electricity and gas. And I believe that most economists believe it has been an effective way of constraining excessive use by some users and keeping prices in check at the lower end of the market. Do you have any evidence to suggest otherwise?

I’m not opposed to new models but there are no indications that this is metered service. With metered service people could control their costs by controlling their consumption. Everything we have heard, up to this point, suggests this will simply be flat fee for the vast majority with overage charges for heavy users. This isn’t metered service at all and it imposes the disadvantages of both metered and flat fee on the customers while giving the company the advantages of both. There is no reason to believe that any price decrease, for light users, is going to accompany this.
It is no more metered service than if the electric companies started charging everyone a minimum of $100 a month for electricity with additional charges for those who use significantly more than average.

Just because you are allowed to rake up as high a bill as you want doesn’t make it “49.99* unlimited!!!!11″.

The whole concept of TW Lowerign prices is laughable.

Most likely they will say the costs are increasing for every one and the new plan will limmit how much they increase

Right… hasn’t been a competitive marketplace since Alexander Graham Bell. I wouldn’t bet on it happening soon.

The only foreseeable competition would be some sort of WiMax-ish or 802.11-based wireless ISPs. There is no business case for putting in parallel wires to people’s houses, so the owners of the lines that are there will always have the upper hand in that space.

are you freaking kidding me?

cable companies and phone companies RAISE prices. they never lower them. ever.

the business model is simple:

1. become a monopoly
2. over charge
3. profit

so, grandma may stop subsidizing your HD movie usage, since you will start paying out the wazoo, but i guarantee you she will not pay a dime less.

this is simply a measure to push internet video out of business to protect their over priced “video on demand” market, pure and simple.

once BT, you tube, netflix, and other services jack up your cable bill with shady overage charges, you will be more likely to use their on demand services since you will know the costs upfront.

it’s the devil you know vs. the devil you don’t.

Is there a robust market of many providers, so we can see if consumers can “vote with their feet”?

Or do we have just one or 2 ADSL providers, in that market?

In most areas of Saint Louis there is just one provider of DSL, and just one of cable, quite a few areas get only one (usually cable).

So is this one of those examples of someone proposing a ‘market based’ solution where there is no market?