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Summary:

When it comes metered broadband, most consumers don’t understand how its implementation could affect what it costs them to download content. So I decided to compare how much, depending on which of the nation’s top ISPs’ metered bandwidth plans you choose, it would cost to rent the teen vampire flick “Twilight.” And I discovered that in almost all cases, the decision to download the movie will cost more than just the $3.99 rental fee — sometimes much more.

twilight-movie-poster-6When it comes metered broadband, most consumers don’t understand how its implementation could affect what it costs them to download content. So I decided to compare how much, depending on which of the nation’s top ISPs’ metered bandwidth plans you choose, it would cost to rent the teen vampire flick “Twilight.”

First I looked at how many gigabytes “Twilight” eats up. If I download an HD version of the movie from the iTunes store, all of the digital bits and bytes that make up the movie add up to 3.8 GB. Other HD movie downloads on iTunes are also in this range.

I then took the information on consumption-based broadband plans and divided the price a customer pays per month by the amount of data they can consume under the plan. This gets me the price per gigabyte. For example, under its cheapest trial tier, Time Warner Cable offers 1 GB for $15 a month, so the price per GB is $15 (each additional GB over the $15 a month plan costs $2). Finally, I multiplied Twilight’s 3.8 gigabytes by the price per GB under each plan.

And what did I find? That in almost all cases, the decision to download the movie will cost more than just the $3.99 rental fee — sometimes much more.

Time Warner Cable: Time Warner’s price per GB for its proposed tiers ranges from 75 cents to $15 (unless you max out the overage fees on the 100 GB per month tier and default into unlimited service for $150). This means the bandwidth for “Twilight” would cost between $2.85 and $20.60. After adding in the $3.99 rental fee, the evening at home costs between $6.84 and $24.59.

AT&T: In most markets, AT&T offers unlimited service, but for those in trial markets where AT&T meters its service we’ll use AT&T’s U-verse rate of $55 per month divided by the 150 GB cap it’s said it will implement. That nets out to AT&T charging 36 cents per GB, which means the bandwidth for “Twilight” will cost $1.37. Adding in that $3.99 rental fee means my vampire fixation will cost me $5.36 to watch without leaving my couch.

Comcast: Comcast offers a variety of plans but only one cap, which is 250 GB. Price per GB ranges from 17 cents to 58 cents, which translates into bandwidth costs of 65 cents to $2.20 for “Twilight.” So at $3.99 to rent through iTunes, the total price to watch a vampire reluctantly seduce a mortal girl would range from $4.64 to $6.19.

Verizon: Since Verizon doesn’t meter or cap its service (or plan to), the cost to watch Twilight only reflects the $3.99 rental fee. A user still pays for broadband (as they do even without a metered plan), but without a limit on data downloads, its impossible to calculate a per-GB cost for downloading content.

  1. This review is astoundingly dumb. Really. If the cost of the additional GB is $2, how can you consider the cost $15/GB based on the first GB? You need to look at the marginal cost of downloading the extra 3.8GB to watch the movie.

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  2. In the case of bandwidth caps, a per-GB cost doesn’t make sense because you pay a flat monthly fee whether you run right up to your bandwidth cap or not. So you’re not paying any “extra” per-GB rate, and getting the movie isn’t costing you any “extra” either (unless you’re going over your cap and are getting penalized). The only cost is that you can download 3.8 less GB than you could otherwise (this still assumes you end up hitting your cap).

    Just pointing this out because you could use the same argument to say checking email is costing you $x per GB, or you could say the movie costs even more because of your electricity consumption, etc., and in the case of bandwidth caps you’re not actually paying any more.

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    1. Stacey Higginbotham Tuesday, April 14, 2009

      Niraj, yes, we pay a flat fee for the gigabytes under a plan, but because they are now limited, we can calculate a value for each GB and thus a cost to the consumer for bandwidth. It’s no different than dividing out your cell phone plan price by the minutes in order to compare plans.

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      1. Sticking with the cell phone analogy, say you have a $40 plan for 500 minutes, and a $50 plan for 700 minutes. The first plan will be $0.08/min and the latter will be $0.07/min, but if you don’t use more than 500 minutes, it doesn’t make sense to get the second plan even if it’s cheaper per minute because you are paying a flat $50 versus a flat $40. The overall cap and the flat rate still matter (the same reason you’d tell someone you’re on a $40 plan or a 500-minute plan – I wouldn’t say I’m on a “8 cents a minute” plan). The actual cost per minute can’t be averaged because your actual usage will determine the cost, not the cap (again, unless you always hit your cap regardless of the plan). The cost per minute will be different for different people if they are not hitting the cap.

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      2. Thats why I have roll over minutes.

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  3. I can’t help but think, if carriers charge based on bits which they have no copyright over, wouldn’t they be committing piracy? I elaborate on this here http://twothirty.am/blog/2009/04/13/isps-charging-usage/

    Another thing that worries me, how would web services that have rich content, or service that depend on server communication like DRM, autoupdate be affects? Is the user liable for paying for services that auto communicate with server or updates? or should the service providers pick up the tab? I think metered broadband will be a mess, and carriers, blinded by greed, don’t have the foresight to see the implications of their moves. I think they will kill the internet as we know it if they agree to this move. They might make a quick profit, but the impact will be far reaching in the broader economy.

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    1. This whole thing is going to end up like electricity. Pretty soon we will all be hearing all about “bandwidth vampires” that use your connection when you don’t think it is and we’ll be told that we have to shut these things off and not use RSS feeds because it is contributing to global warming, etc. etc.

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      1. I dont think it can ever be like electricity due to the networked nature of the internet.
        The electric grid is interconnected and electric companies could buy capacity from one another, but it really doesnt matter where the electricity comes from because its all the same.
        Information bits on the other hand, although seem quite standardized in the eyes of the ISP, to the users, the content which it conveys is highly customized and specific.

        Say I retrieve content from a server in Australia, how would carriers who have the bits go through their networks be compensated? wouldn’t this needs to be resolved first? I think the closest a metered internet would resemble will be wireless networks, where international phone calls are expensive. I don’t expect the two to be exactly similar because of the nature of routing in the internet which is more unpredictable.

        I think carriers should charge based on Capacity and QoS rather than metering.

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  4. [...] The Twilight Problem: Why Metered Broadband Could Suck When it comes metered broadband, most consumers don’t understand how its implementation could affect what it costs them to download content. So I decided to compare how much, depending on which of the nation’s top ISPs’ metered bandwidth plans you choose, it would cost to rent the teen vampire flick Twilight. And what did I find? That in almost all cases, the decision to download the movie will cost more than just the $3.99 rental fee — between 65 cents and $20.60 more. For more on the math and the costs under each ISP, check out the story at GigaOM. [...]

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  5. I would like to see a few comments from your Australian readers as they have endured metered broadband for years.. Like everything in the free world.. soon enough those in charge will find ways to destroy anything good..

    Imagine the world today if we really lived in a free society..

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  6. Stacey – could suck? Yeah, I guess you could say that in the same way that getting cancer of the eyes could suck or being mauled by a pack of rabid wolverines could suck. Caps, limits, metering – all very bad and moving in the wrong direction. The path to technical greatness is not going to be paved with mizerly limits on web access. Bandwidth is the fundamental mojo, the fertilizer, the feedstock, the root of all goodness and caps, even caps which today look rather generous, will eventually be stifling limitations.

    “640 K ought to be enough for anybody.”
    – Bill Gates, 1981

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  7. This is a silly commentary that does nothing but detract from good debates about metered broadband.I I’m afraid this is what happens when technology meets policy. You get technology experts (the reason I read GigaOM) who are ignorant of economics and basic policy and there are policy experts ignorant in technology.

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    1. I disagree. Putting it into a different perspective may help those that don’t see the big issue with monthly transfer caps. So here, it shows that by increasing the cost of the individual rental from any other source, TWC has then made their own movie rental service the better option.

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  8. The answer is simple, don’t watch Twilight. It was an awful vampire movie. :)

    Joking aside, I live in Rochester, NY and will be greatly affected by bandwidth caps. The real cost to compare are the ones TWC is losing to customers not subscribing to Digital Cable and movie channels. Unsurprisingly it matches up quite well.

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    1. Stacey Higginbotham Tuesday, April 14, 2009
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  9. Scott Skibell Tuesday, April 14, 2009

    Caps will stifle innovation just when America needs it most.

    It’s not just the renting of Twilight that will be impacted. It’s the download of educational videos from YouTube. It’s the automatic Microsoft software updates that consume bandwidth. It’s back-ups to Amazon S3. It’s VoIP services, collaboration services, and conferencing. It’s distance learning, tele-medicine, and entertainment industries. All of these new services will suffer when usage is metered and families have to choose which services to use for fear of going over their cap.

    This needs to stop and I thank GigaOM for being so outspoken about it.

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