Verizon CEO says heavy broadband users should pay more for their servi (1 Viewer)

[Mr. Ected]

If Verizon did this, would you leave?

Verizon CEO says heavy broadband users should pay more for their serviceAre you constantly streaming high-definition video, downloading tons of Xbox One games and sending massive files to friends and family? You should pay more for Internet access than your neighbor, who only uses a 10-year-old PC in his living room to read email and occasionally browse the Internet for cat GIFs. This is the position of Verizon CEO Lowell McAdam, who said this week that heavy broadband users should have to pay more for home Internet access than those who don’t take full advantage of the service for which they already pay top dollar.

Verizon recently made news when it was accused of throttling Netflix in a move that would have danced on net neutrality’s grave mere weeks after a court ruling killed the rule set. As BGR learned, however, the company denied impeding Netflix traffic and the issue was instead thought to be related to peering congestion.

According to recent rumors, however, Verizon is following in Comcast’s footsteps and looking for Netflix to help shoulder the cost of the heavy network traffic its service necessitates.

But it’s not just service providers that should pay more, Verizon’s CEO said.

“It’s only natural that the heavy users help contribute to the investment to keep the Web healthy,” McAdam said on Monday, according to IDG News Service. “That is the most important concept of net neutrality.”

McAdam went on to say that the Federal Communications Commission does need to create a set of rules that govern the Internet, but those rules must also take into account the roles of the wider industry including not just ISPs, but also companies like Apple, Netflix and Google, as well as heavy Internet users. ”Any rules will have to include all of these players,” he said.

On a positive note, McAdam again dispelled concerns that Verizon might employ bandwidth prioritization practices that would see some services throttled while others are provided clear paths across Verizon’s network.

“We make our money by carrying traffic,” McAdam said. “That’s how we make dollars. So to view that we’re going to be advantaging one over the other really is a lot of histrionics, I think, at this point.”

 

[GroveDiesel]

Why is he wrong?

 

[TheIronSheik]

Why is he wrong?

This is my initial thought, too.

 

[glock]

Why is he wrong?

This is my initial thought, too.

Because you are already paying for internet access??

 

[Long Ball Larry]

Why is he wrong?

Because everyone should always have whatever they want on their own terms, especially if it is something that they are used to?

 

[E Street Brat]

Should the household that watches television 10 hours a day be charged more than the house that watches 4?

 

[Cold Dead Hands]

Don't they already sell different levels of speed?

 

[Slapdash]

The US already pays through the nose for crappy broadband access. It is only going to get worse once these monopolies are able to charge even more for using the same infrastructure.

 

[36th Chamber]

I have no problem with usage based fees assuming the base is fair

 

[GroveDiesel]

Why is he wrong?

This is my initial thought, too.

Because you are already paying for internet access??

Why should someone who uses 200MB of bandwidth pay the same as someone that uses 300GB of bandwidth?

If you'd like to argue that the prices for bandwidth are too high in general in the US I would agree. They should drop the prices of low bandwidth users and maintain prices of high bandwidth users.

 

[The Commish]

Don't people have to pay more after they go over their limit? I don't understand how this is different than their existing model

 

[Banger]

makes sense to me.

 

[KCitons]

I don't have a problem with this either. But, if you are going to charge me for 100gb, then I should own those gb's until I use them. (ie they should rollover to the next month)

The problem with these companies, is they want to double dip. They want to charge customers that use 10gb's a month for 100gb's and then they want to hammer the guy's that use 300gb's.

 

[RUSF18]

Why is he wrong?

This is my initial thought, too.

Because you are already paying for internet access??

Why should someone who uses 200MB of bandwidth pay the same as someone that uses 300GB of bandwidth?

If you'd like to argue that the prices for bandwidth are too high in general in the US I would agree. They should drop the prices of low bandwidth users and maintain prices of high bandwidth users.

Which, unless I'm missing something, they don't seem to be going for. While I agree with their overall premise for obvious reasons, actually lowering the price for low to moderate users would be the logical step along with heavy users paying a premium. If they fail to do that, #### em.

 

[The Commish]

If there's anything that annoys me about these companies it's the "use it or lose it" scam they have going on. If you're going to charge me for going over my limit, you should allow me to rollover what I don't use also.

 

[MattFancy]

It would make sense to lower the prices for people who don't use more, but with Verizon, I don't see that happening. This is the same company that took away unlimited data on wireless plans only to charge the same price for 2GB as it did for unlimited. So I have less data and pay the same price? Makes sense!

 

[Gator Shawn]

I think the concern is that companies like Netflix produce a product that put incredible stress on network infrastructure without paying for the infrastructure. It's a reasonable concern IMHO. Maybe there should be a cost incentive for companies like Netflix to improve compression and try to reduce their overall footprint on bandwidth. But I don't know that there is. It's all on the owners of the infrastructure to absorb the costs and invest into capacity.

 

[RUSF18]

I think the concern is that companies like Netflix produce a product that put incredible stress on network infrastructure without paying for the infrastructure. It's a reasonable concern IMHO. Maybe there should be a cost incentive for companies like Netflix to improve compression and try to reduce their overall footprint on bandwidth. But I don't know that there is. It's all on the owners of the infrastructure to absorb the costs and invest into capacity.

And I'm assuming part of this is also because people are cutting the cable and using Netflix as a replacement. So those who are providing the access are losing revenue and increasing their expenses.

I can't say I wouldn't be getting an appropriate amount of value out of my Netflix subscription if I was paying $8/month to Netflix for the content and $8 to my ISP to stream it. At over 30 million subscribers, that's just shy of $3 billion annually going to the providers of the broadband. Probably not much in the grand scheme but add some more costs for Amazon Prime, Hulu, etc and it could add up.

 

[pats3in4]

Don't people have to pay more after they go over their limit? I don't understand how this is different than their existing model

This is what I was wondering. For my in-home internet access, I have AT&T U-Verse which has a 25GB/month cap for the baseline fee. For my cellular data service, I have a 2GB/month cap. Seems like the caps were put in place for heavy users.

 

[mquinnjr]

Should the household that watches television 10 hours a day be charged more than the house that watches 4?

I don't get why the two are mutually exclusive.

 

[Slapdash]

Should the household that watches television 10 hours a day be charged more than the house that watches 4?

Once cable companies figure out how to do that, they will.

The costs to using the internet are largely fixed; they do not fluctuate much based on usage. This is just another way to nickle and dime people who think broadband is similar to normal products.

 

[Long Ball Larry]

Should the household that watches television 10 hours a day be charged more than the house that watches 4?

I don't get why the two are mutually exclusive.

I assume that the amount of bandwidth to transmit the television show is negligible compared to internet service, but that is just a guess.

 

[Long Ball Larry]

Should the household that watches television 10 hours a day be charged more than the house that watches 4?

Once cable companies figure out how to do that, they will.

The costs to using the internet are largely fixed; they do not fluctuate much based on usage. This is just another way to nickle and dime people who think broadband is similar to normal products.

Don't they need to improve infrastructure as usage increases? In economic terms, I guess you're right that it's a fixed cost, but it still requires a lot of improvements, right?

 

[Mr. Ected]

I guess I was thinking if only Verizon did this and you lived in an area where you could switch to xFinity or something like that, would you?

 

[mquinnjr]

I guess I was thinking if only Verizon did this and you lived in an area where you could switch to xFinity or something like that, would you?

I get the feeling that, like some posters have discussed above, once one TV/internet provider does this, they all will eventually just like cell phone data tiered usage pricing.

 

[BassNBrew]

Should the household that watches television 10 hours a day be charged more than the house that watches 4?

Once cable companies figure out how to do that, they will.

The costs to using the internet are largely fixed; they do not fluctuate much based on usage. This is just another way to nickle and dime people who think broadband is similar to normal products.

They have. Everyone around here is going 100% to digital boxes. Now if you have a home with 6 TVs, you'll get tagged an extra $4 to $5 bucks for the sets that currently don't have a box.

 

[[icon]]

My biggest complaint is that Americans already pay some of the highest costs for internet access (land and cellular) in the world. These corporations are VERY healthy, churning out record profits, yet somehow they're lobbying the government like Netflix and little Jimmy gamer down the street are bankrupting them.

I am fine with tiered pricing but let's be more fair... this should be a two way street. Let's fix BOTH ends of the spectrum.

For Example (purely pulling numbers out of the hat):

If current offerings are :

Unlimited 25Mb/sec data for $50/mo
Unlimited 50Mb/sec data for $70/mo

Let's not just cap those and add more to it. If you're going to ask for more from the big users while still raking in record profits, let's ask for less from the casual users. It's only fair given the quasi-monopoly that these pipleline corps are forming...

I'd be all over something like:

50GB at 10Mb/sec for $20/mo with $0.10/GB overage

100GB at 25Mb/sec for $30/mo with $0.10/GB overage

300GB at 50Mb/sec for $50/mo with $0.10/GB overage

1TB at 100Mb/sec for $90/mo with $0.10/GB overage

Tier the speed/data caps and charge for overages. If you have a guy who streams Netflix 6 hours a day, it will cost him more. But pass along the benefits to people who don't need ultra-fast pipes, or don't clog up the pipes with tons of video streaming or torrents.

What's good for the goose...

Of course... this would provide ample motivation for Google Fiber to expand rapidly and gobble up market share at their Unlimited Gigabit $70/mo plan

 

[Sarnoff]

Personally, I love the idea of usage-based fees.

We pay for electricity in kilowatt-hours based on usage. We should charge for internet the same way. Gigabyte-hours or whatever. Tie it into a media marketplace and the whole system of streaming video and getting people to pay vs. pirate is solved. Have the studios put everything online and stream for "free", except they get a cut of the usage fees. The more people stream from you, the more gigabytes they're accumulating, the more bandwidth they're using, the more they pay, the more the studio earns from the content. You want to stream the entire catalog of some record company all day? Fine with the studio, have it as much as you want. You'll just pay the usage fee for all those gigabytes. Want to watch a 2 hour move? Should be about 1.5GB, fork over $5 for it and call it even.

 

[Mr. Ected]

There might be some benefit for a company like Verizon to 'bundle' it with TV and such; if you paying for TV you'd be less likely to be a 1000/hr a month stream of Netflix.

 

[Slapdash]

Should the household that watches television 10 hours a day be charged more than the house that watches 4?

Once cable companies figure out how to do that, they will.

The costs to using the internet are largely fixed; they do not fluctuate much based on usage. This is just another way to nickle and dime people who think broadband is similar to normal products.

Don't they need to improve infrastructure as usage increases? In economic terms, I guess you're right that it's a fixed cost, but it still requires a lot of improvements, right?

They already charge based on the bandwidth available to each user.

They are currently investing very little in improving infrastructure while posting quite high profits. This is just more of the same.

 

[Slapdash]

Personally, I love the idea of usage-based fees.

We pay for electricity in kilowatt-hours based on usage. We should charge for internet the same way. Gigabyte-hours or whatever. Tie it into a media marketplace and the whole system of streaming video and getting people to pay vs. pirate is solved. Have the studios put everything online and stream for "free", except they get a cut of the usage fees. The more people stream from you, the more gigabytes they're accumulating, the more bandwidth they're using, the more they pay, the more the studio earns from the content. You want to stream the entire catalog of some record company all day? Fine with the studio, have it as much as you want. You'll just pay the usage fee for all those gigabytes. Want to watch a 2 hour move? Should be about 1.5GB, fork over $5 for it and call it even.

Why would you ever stream as opposed to download in this scenario?

 

[Sarnoff]

Personally, I love the idea of usage-based fees.

We pay for electricity in kilowatt-hours based on usage. We should charge for internet the same way. Gigabyte-hours or whatever. Tie it into a media marketplace and the whole system of streaming video and getting people to pay vs. pirate is solved. Have the studios put everything online and stream for "free", except they get a cut of the usage fees. The more people stream from you, the more gigabytes they're accumulating, the more bandwidth they're using, the more they pay, the more the studio earns from the content. You want to stream the entire catalog of some record company all day? Fine with the studio, have it as much as you want. You'll just pay the usage fee for all those gigabytes. Want to watch a 2 hour move? Should be about 1.5GB, fork over $5 for it and call it even.

Why would you ever stream as opposed to download in this scenario?

You are taking in the same number of bits, so you pay the same price either way. If you download it, you could replay it forever, sure... But the thing is that you're paying however you get it. Stream a 1.5GB movie straight from the studio, pay $5. "Steal" it via 1.5GB torrent download from a pirate site, pay $5. The ISP would divvy up the collected usage fees and spread them out among the legit content providers and copyright holders only, though. So the pirate site wouldn't actually get the $5, the legit owner would. I kinda oversimplified the idea but that's the basics.

 

[sn0mm1s]

Should the household that watches television 10 hours a day be charged more than the house that watches 4?

I don't get why the two are mutually exclusive.

I assume that the amount of bandwidth to transmit the television show is negligible compared to internet service, but that is just a guess.

I don't believe this is correct. I would assume that HD to your TV is pretty comparable to streaming HD to your PC.

 

[Slapdash]

Personally, I love the idea of usage-based fees.

We pay for electricity in kilowatt-hours based on usage. We should charge for internet the same way. Gigabyte-hours or whatever. Tie it into a media marketplace and the whole system of streaming video and getting people to pay vs. pirate is solved. Have the studios put everything online and stream for "free", except they get a cut of the usage fees. The more people stream from you, the more gigabytes they're accumulating, the more bandwidth they're using, the more they pay, the more the studio earns from the content. You want to stream the entire catalog of some record company all day? Fine with the studio, have it as much as you want. You'll just pay the usage fee for all those gigabytes. Want to watch a 2 hour move? Should be about 1.5GB, fork over $5 for it and call it even.

Why would you ever stream as opposed to download in this scenario?

You are taking in the same number of bits, so you pay the same price either way. If you download it, you could replay it forever, sure... But the thing is that you're paying however you get it. Stream a 1.5GB movie straight from the studio, pay $5. "Steal" it via 1.5GB torrent download from a pirate site, pay $5. The ISP would divvy up the collected usage fees and spread them out among the legit content providers and copyright holders only, though. So the pirate site wouldn't actually get the $5, the legit owner would. I kinda oversimplified the idea but that's the basics.

So if I'm paying the same price either way, why would I chose the legitimate means outside of any moral obligation to further prop up the entertainment industry?

 

[17seconds]

For the last few years the wireless carriers have been in a constant battle with over-the-top services. They spend millions building networks and then in swoops Google, youtube, Netflix, Facebook etc to pound the #### out of it. It's the price Verizon and other carriers are paying for failing to innovate in software after 3G came out about 10 years ago. They could have owned all of it but iOS and Android eventually took it over.

I agree with his statement, Verizon needs to adjust their pricing if they want to get a bigger piece of what their network is being used for.

 

[pats3in4]

Should the household that watches television 10 hours a day be charged more than the house that watches 4?

I don't get why the two are mutually exclusive.

I assume that the amount of bandwidth to transmit the television show is negligible compared to internet service, but that is just a guess.

I don't believe this is correct. I would assume that HD to your TV is pretty comparable to streaming HD to your PC.

Depends on the delivery mechanism. Someone like Comcast who transmits QAM-modulated channels (digital cable) compresses the content in MPEG-2 which is not as efficient as H.264, VC-1, VP8 and other newer compression schemes used by Netflix, YouTube, HBO Go, Hulu+, Vudu and the like. Someone like AT&T U-Verse has an IPTV model (fetches the selected channel from a server like one would fetch other internet content) uses the newer codecs.

This is also why cable companies are looking at switching to the IPTV model...to reduce bandwidth allocated to TV channel packets.

 

[Sarnoff]

Personally, I love the idea of usage-based fees.

We pay for electricity in kilowatt-hours based on usage. We should charge for internet the same way. Gigabyte-hours or whatever. Tie it into a media marketplace and the whole system of streaming video and getting people to pay vs. pirate is solved. Have the studios put everything online and stream for "free", except they get a cut of the usage fees. The more people stream from you, the more gigabytes they're accumulating, the more bandwidth they're using, the more they pay, the more the studio earns from the content. You want to stream the entire catalog of some record company all day? Fine with the studio, have it as much as you want. You'll just pay the usage fee for all those gigabytes. Want to watch a 2 hour move? Should be about 1.5GB, fork over $5 for it and call it even.

Why would you ever stream as opposed to download in this scenario?

You are taking in the same number of bits, so you pay the same price either way. If you download it, you could replay it forever, sure... But the thing is that you're paying however you get it. Stream a 1.5GB movie straight from the studio, pay $5. "Steal" it via 1.5GB torrent download from a pirate site, pay $5. The ISP would divvy up the collected usage fees and spread them out among the legit content providers and copyright holders only, though. So the pirate site wouldn't actually get the $5, the legit owner would. I kinda oversimplified the idea but that's the basics.

So if I'm paying the same price either way, why would I chose the legitimate means outside of any moral obligation to further prop up the entertainment industry?

You don't have to. You can download by any means you want. Your usage, though, will mean your ISP charges you more. The extra money you pay will go to the entertainment industry either way. Download all your movies via pirate sites and the usage fees still go to Disney and Paramount Pictures.

 

[lod01]

This POS CEO can go #### himself with his FIOS.

 

[NutterButter]

The person that just sends emails and occasionally browsers the internet would be better off without broadband and just have a 4G connection. I doubt the CEO would ever say that though b/c they are just killing these people with the price they charge for such limited consumption. I agree that heavy users should pay more, but my idea of heavy is someone that's consuming I'd say 250+ GB's per month. If you're gaming some and watching a movie here or there, that seems perfectly inline with what broadband providers are currently charging. Otherwise, what the hell are you paying for.

 

[NutterButter]

Personally, I love the idea of usage-based fees.

We pay for electricity in kilowatt-hours based on usage. We should charge for internet the same way. Gigabyte-hours or whatever. Tie it into a media marketplace and the whole system of streaming video and getting people to pay vs. pirate is solved. Have the studios put everything online and stream for "free", except they get a cut of the usage fees. The more people stream from you, the more gigabytes they're accumulating, the more bandwidth they're using, the more they pay, the more the studio earns from the content. You want to stream the entire catalog of some record company all day? Fine with the studio, have it as much as you want. You'll just pay the usage fee for all those gigabytes. Want to watch a 2 hour move? Should be about 1.5GB, fork over $5 for it and call it even.

Why would you ever stream as opposed to download in this scenario?

You are taking in the same number of bits, so you pay the same price either way. If you download it, you could replay it forever, sure... But the thing is that you're paying however you get it. Stream a 1.5GB movie straight from the studio, pay $5. "Steal" it via 1.5GB torrent download from a pirate site, pay $5. The ISP would divvy up the collected usage fees and spread them out among the legit content providers and copyright holders only, though. So the pirate site wouldn't actually get the $5, the legit owner would. I kinda oversimplified the idea but that's the basics.

So if I'm paying the same price either way, why would I chose the legitimate means outside of any moral obligation to further prop up the entertainment industry?

If I can find a good stream, I'll do that any day over downloading. There's very few movies that I'd ever watch twice so there's typically no point of downloading other than quality. I pretty much watch all movies streaming b/c there's a few sites out there that have solid stuff.

 

[Sabertooth]

So mostly people stealing movies think this is bull#### right?

 

[T Bell]

Why is he wrong?

This is my initial thought, too.

Because you are already paying for internet access??

Not a good argument

 

[Rooster]

For the last few years the wireless carriers have been in a constant battle with over-the-top services. They spend millions building networks and then in swoops Google, youtube, Netflix, Facebook etc to pound the #### out of it. It's the price Verizon and other carriers are paying for failing to innovate in software after 3G came out about 10 years ago. They could have owned all of it but iOS and Android eventually took it over.

I agree with his statement, Verizon needs to adjust their pricing if they want to get a bigger piece of what their network is being used for.

This is on the right track, Verizon and the carriers don't want to be "dumb pipes" and turn themselves into some sort of commodity (not that there's enough competition for them to truly be a commodity, but whatever). The truth is it's the Xbox Ones and Netflix and all the service providers are the ones creating value on the Internet and Verizon, AT&T and all the carriers want to extract some of that value even though what they provide is a very tiny piece of that value. If there was a true market for internet service, it would be a commodity and delivered at razor thin margins like almost every other commodity out there. The carriers would be dumb pipes that competed based on reliability, speed and customer service. It's only because of the lack of choice most people have with regard to broadband that these companies get away with charging so much. They should keep quiet and enjoy the market inefficiencies that allow them to be so profitable now, lest they push too far and get some sort of anti-trust investigation going and find out first hand what a true market or extreme regulation would do to their profits.

 

[Tiger Fan]

The $60 I'm paying for internet is giving me a lot better value than the $120 I'm paying for tv

 

[T Bell]

The $60 I'm paying for internet is giving me a lot better value than the $120 I'm paying for tv

That's why I got rid of the latter 3 years ago. It's a complete waste of money nowadays.

 

[FreeBaGeL]

I don't know why more power companies don't get in the game. Back in Chattanooga the local power company piggy-backed fiber onto their existing power lines and were able to get nearly the whole city connected in a matter of months. They offered 100mbps with no data cap for $50/month and in 3 years of having that service I never experienced a minute of downtime. It was heaven.

Magically, that was one of the few areas where Comcast didn't have a data cap. Competition forced their hand. The problem in general is the complete lack of competition in most areas due to the mind-boggling anti-capitalism behind the cable industry. I have no idea why they're allowed to get away with it, but it leads to a terrible product where their best strategies to make more money are to offer less services and charge more money instead of improving their product, because the government has told us that we have to either use them or have nothing.

Technologies that use more bandwidth are coming out daily, and instead of spending any of their obscene profits to support those new technologies lest we move to a competitor that does, since we have no option of a competitor they just opt to cut out those new technologies through regulation.

My current ISP throttles by both the day AND month. At 12mbps for $60/month I get 250gb before I'm charged for overages. On top of that, if I use more than 500mb in a day I'm throttled down to 5mbps for the rest of that day, and if I use 6gb in a day I'm throttled down to 1mbps for the rest of the day. Hideous. To back up my several terrabytes of raw camera photos onto an infinite cloud storage solution like Bitcasa would cost me $5560 in overage charges, and probably take a year to upload. Now imagine them trying to get away with that crap back in Chattanooga where I could back all those files up with no additional charges and about a day's worth of time. They'd be out of business, as they deserve to be.

The idea of heavy users paying more is fine, but of course they'll demand they have their cake and eat it too by charging casual users the heavy user rate and inventing new even higher tiers for actual heavy users. I have no pity for these companies, which are posting obscene profits by offering us worse products for more money than virtually every other first world country. I only hope that one day something better will drive them completely out of business and all of their greedy, appauling executives end up completely bankrupt.

 

[acarey50]

Just treat like electricity service:

Pay $X for access to the service.

Then pay $Y/MB used up to a certain amount - say 5GB

Then pay $Y+10% for the next 5GB and so on

Heavy users pay more to use more, light users pay less to use less but all customers pay a certain base amount to maintain infrastructure, etc.

 

[Mr. Ected]

Good news is there currently does not seem to be a cap on FiOS. Yet. They seem to leave the window open in their TOS.

4.3 Restrictions on Use. The Service is a consumer grade service and is not designed for or intended to be used for any commercial purpose. You may not resell, re-provision or rent the Service, (either for a fee or without charge) or allow third parties to use the Service via wired, wireless or other means. For example, you may not provide Internet access to third parties through a wired or wireless connection or use the Service to facilitate public Internet access (such as through a Wi-Fi hotspot), use it for high volume purposes, or engage in similar activities that constitute such use (commercial or non-commercial). If you subscribe to a Broadband Service, you may connect multiple computers/devices within a single home to your modem and/or router to access the Service, but only through a single Verizon-issued IP address. You also may not exceed the bandwidth usage limitations that Verizon may establish from time to time for the Service, or use the Service to host any type of server. Violation of this section may result in bandwidth restrictions on your Service or suspension or termination of your Service.

 

[Tiger Fan]

The $60 I'm paying for internet is giving me a lot better value than the $120 I'm paying for tv

That's why I got rid of the latter 3 years ago. It's a complete waste of money nowadays.

yeah, i'm working on this. hopefully will be able to pull it off in the next few months (at least for non-football season)

 

[Schlzm]

If service providers start doing this it's going to suck to be neighbors with the scriptkiddie who jumps your WiFi instead of running up his own account. Also I don't see how they can validate usage like electricity. Verizon isn't burning coal to produce internets for it's customers.

Schlzm