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	<title>CableTechTalk &#187; Time Warner</title>
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		<title>On Testing Consumption-Based Pricing Models</title>
		<link>http://www.cabletechtalk.com/tech-discussions/2009/04/15/on-testing-consumption-based-pricing-models/</link>
		<comments>http://www.cabletechtalk.com/tech-discussions/2009/04/15/on-testing-consumption-based-pricing-models/#comments</comments>
		<pubDate>Wed, 15 Apr 2009 16:46:38 +0000</pubDate>
		<dc:creator>Kyle McSlarrow</dc:creator>
				<category><![CDATA[Broadband]]></category>
		<category><![CDATA[Cable Companies]]></category>
		<category><![CDATA[Tech Discussions]]></category>
		<category><![CDATA[Time Warner]]></category>
		<category><![CDATA[consumption based billing]]></category>
		<category><![CDATA[Free Press]]></category>
		<category><![CDATA[metering]]></category>

		<guid isPermaLink="false">http://www.cabletechtalk.com/?p=370</guid>
		<description><![CDATA[So, my friends at Free Press recently announced a petition to gather signatures to call on Congress to “investigate” plans by Time Warner Cable to conduct trials in four U.S. cities to test customer response to “consumption-based” billing for its high-speed Internet access service. Great. Hundreds of billions of dollars have been and continue to [...]]]></description>
			<content:encoded><![CDATA[<p>So, my  friends at Free Press recently announced <a href="https://secure.freepress.net/site/Advocacy?cmd=display&amp;page=UserAction&amp;id=311">a petition</a> to gather signatures to  call on Congress to “investigate” plans by Time Warner Cable to conduct trials  in four U.S.  cities to test customer response to “consumption-based” billing for its  high-speed Internet access service.</p>
<p>Great.  Hundreds of billions of dollars have been and  continue to be invested by our industry in the deployment of broadband and now  the deployment of next generation broadband; speeds have doubled or tripled in  just the last few years; new and spectacular applications keep getting  launched; no anti-competitive conduct has remotely occurred; and, in fact,  compared to many other industries, the Internet ecosystem seems to be one of  the few really healthy, growing, and creative parts of our economy with  continued investment and innovation taking place every day.   At a time of economic and financial challenges  for our country, I for one would rather Congress spend its time on real  problems, not fictional ones.</p>
<p>Despite  Free Press’s hyperbole, the facts are these:   Time Warner Cable has merely suggested that they are interested in  conducting a limited set of trials of a new pricing model – in a careful and  transparent manner – that may serve the vast majority of their customers better  by reflecting the growing reality that some consumers utilize far more high  speed bandwidth than others.  They have  engaged in an open conversation with their customers and other interested  parties about how they are thinking through their plans, and I would expect  that only after gathering input would they announce more specific plans for  what, where and how such tests would be conducted.</p>
<p>While it  is certainly appropriate for all of us and anyone interested in the deployment  and use of broadband technology to monitor the results of these and similar  experiments, we should recognize the Free Press petition drive as the publicity  stunt it so obviously is.</p>
<p>Let’s  not forget that <a href="http://gullfoss2.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&amp;id_document=6519825121">Free Press previously suggested that consumption-based billing could  be an appropriate pricing model</a> for network providers in a filing on network management at the FCC:</p>
<blockquote><p><em><strong>[T]hey could also  charge by usage</strong></em> (emphasis mine),  provide more bandwidth to all users, or actually offer high <em>symmetric </em>broadband speeds.</p></blockquote>
<p>As well as <a href="http://www.washingtonpost.com/wp-dyn/content/article/2008/07/29/AR2008072902077.html">to the media</a>:</p>
<blockquote><p>&#8220;I don&#8217;t quite see [metering] as an outrage, and in fact is probably the  fairest system going &#8212; though of course the psychology of knowing that you&#8217;re  paying for bandwidth may change behavior,&#8221; said Tim Wu, a law professor at Columbia University  and chairman of the board of public advocacy  group Free Press.</p></blockquote>
<p>And,  while they have every right to <a href="http://www.freepress.net/files/Blocking_or_Metering_A_False_Choice.pdf">change their minds</a>, what hasn’t changed is that  it is entirely appropriate for any actor in the Internet eco-system to test and  examine new ideas and approaches that promote consumer choice and enhance the  Internet experience for broadband users before making any permanent decisions.   The right approach, as Time Warner Cable has  done, is to conduct such tests in a transparent way, with full notice and  explanation to their customers.</p>
<p>I don’t hold a brief for or  against any particular pricing model.  I simply do not have all the data  to make an informed judgment about consumption-based billing; nor, with all due  respect, does anyone else.  The whole point of tests, it seems to me, is  to learn what works and what doesn’t, and the details matter a lot.</p>
<p>But  the “shoot, ready, aim” mentality seems all too prevalent these days.  For example, it is somewhat tiresome to have  Free Press repeatedly assert that every effort by network providers to examine  any new approach or idea in our or related industries is somehow designed to  protect against the supposed “threat” of “Internet video.”  This is so  stale, and so at odds with the facts, that it really should not be necessary to  point out the obvious:</p>
<ul>
<li>Over  the last few years, the use of broadband connections to view Internet video has  grown at a faster rate than any other application.   According to one estimate, traffic generated  by YouTube video in 2008 alone was more than the sum of traffic crossing the Internet  backbone in 2000.</li>
<li>Far  from fearing online video, our industry is courting and exploring partnerships  to bring Internet video to the television screen;</li>
<li>Our  industry has worked &#8212;  and continues to  work &#8212; cooperatively with consumer electronics manufacturers to ensure TVs can  receive Internet video by building in the necessary ports;</li>
<li>Our  industry is the largest provider of broadband in America, and we view the health and  growth of the Internet ecosystem as fundamental to our success, which means the  applications and services on the Internet must thrive too;</li>
<li>Our  industry is aggressively deploying next generation broadband across America in  order to enable, not restrict, new applications.</li>
</ul>
<p>Any one  of these basic facts would have been evident simply by touring The Cable Show  in Washington, D.C., earlier this month.</p>
<p>I would  respectfully suggest that this is precisely the time in which we can and should  test new ideas, especially when the evidence demonstrates that such tests are  being planned with care and transparency.</p>
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