It's Captastic! Cable One Embraces Congestion Pricing

[qi:004] Cable One, a cable provider serving 720,000 customers in 19 states, has apparently brought congestion pricing for broadband access to the U.S., according to a post over at DSLReports. Such pricing plans limit speeds at certain times based on the assumption that the network will have more traffic during specific hours of the day. It’s similar to the traffic management plans in various cities that require commuters to pay more to enter a locale during certain times.

A few European ISPs have played around with congestion pricing, offering certain services or speeds based on the time of day, and most in the wireless industry think congestion pricing is the way to go, but it’s still relatively rare. BT recently got in trouble with subscribers for slowing its speeds on video between the hours of 5 p.m. and midnight. Overall, these pricing changes and caps are both a way to manage traffic and increase revenue for ISPs. Last year, I talked about the use of different tiers, caps and usage policies in determining pricing with Kurt Dobbins, the chief technology officer of IP services at Arbor Networks, and he said:

Carriers are all seeing a fundamental growth in traffic, and very few of them are seeing the equivalent growth in subscriber acquisition, so they’re spending billions more on bandwidth capacity but are seeing no new revenue…This is an answer to how they will grow revenue.

Cable One’s charts show that the provider is both throttling speeds between 4 p.m. and midnight (offering “standard” speeds that are about half of the advertised “extended” speeds) and is limiting the amount of data a user can download between noon and midnight. Basically, the all-you-can eat broadband buffer is only open at advertised speeds between midnight and noon. After that, you’re stuck watching what you download — and for eight hours, surfing at half speed.

There are two problems with this plan, beyond the main issue that it is consumption-based and a threat to innovation. First, instead of throttling back speeds when the network is actually congested as Comcast does, it assumes congestion all the time. If that’s the case, then a network upgrade or at least a few node splits may be in order.

Second, it’s terrible marketing. This is a confusing plan for any consumer. I would say it’s a revenue grab, but instead of charging overage fees when users download more than they are supposed to, Cable One says it will terminate the account. If it wants to implement a plan like this it should take a page from wireless carriers, and create packages with easy-to-understand names that help consumers figure out what they can and can’t do on their broadband connection. My suggestions include, “I Can’t Believe It’s Broadband” and “Get One-Half the Speeds, One-Third of the Day!” Readers, feel free to submit your own.

CableOne

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