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Frontier: Now With Prices Up To $10.80 Per Gigabyte, Limit Five GB

Phillip Dampier August 4, 2008 Competition, Data Caps, Frontier 13 Comments
Your Money = Their Money

Your Money = Their Money

With the imposition of a 5GB monthly cap across their nationwide service area, consumers might find it useful to break down the cost of what different broadband services charge for service per gigabyte, and what kinds of profits companies can expect to receive from those charges.   The average cost of traffic for most national broadband providers amounts to pennies per gigabyte transferred.   But what will you pay?

Frontier offers different pricing across several promotions, ranging from $19.99-$49.99.   The lower priced tiers correspond with service contracts that require multi-year commitments, with a substantial penalty for early cancellation.   They also charge a monthly modem rental fee (MRF) of $3.99.   In some areas this fee is levied even if you wish to use your own DSL modem.   Since this fee is universally imposed in many areas, its cost has been included in the price breakdown.   Excluded from the review are additional taxes, surcharges, and fees which are imposed by various taxing authorities but are outside of Frontier’s control.

Frontier High Speed Internet Cost Review
(per  GB downloaded,  5GB per month)

Your Monthly Price      Per GB     Frontier Pays Per GB
$49.99 + $3.99 MRF      $10.80            less than 10c
$39.99 + $3.99 MRF      $ 8.80            less than 10c
$29.99 + $3.99 MRF      $ 6.00            less than 10c
$19.99 + $3.99 MRF      $ 4.00            less than 10c

The cost for watching an average 4GB high definition DVD quality movie over Frontier DSL is $43.20.   One DVD will be all you get, because any more than that puts you over the limit.  With a growing number of Americans using the Internet to access multimedia content online, exceeding 5GB of usage per month is easier than ever.

Stop the Cap! challenges Frontier to make public their own study which sources have told us show up to 40% of their existing customers already exceed 20GB of usage per month using Frontier DSL.   How does the company justify calling nearly half of their loyal customers bandwidth piggies and abusers?

Since low usage customers represent enormous profits for broadband providers, as the above chart illustrates, kneecapping the average user and beheading the high bandwidth customer with a draconian limit on monthly usage allows Frontier to vastly expand profits.   As their own financial reports to shareholders illustrate, Frontier’s investment in their network does not come close to corresponding with the massive profit taking a 5GB usage cap allows.

Cherry pick the weekend e-mailer and occasional web browser, throw everyone else under the nearest bus, and  high five one another all the way to the bank.   That’s the Frontier way.

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Stephen
Stephen
15 years ago

Phil, Great data here. Of course they will have to deal with some loss of the 40% of the base at the same time. They will not need as much bandwidth or as many employees either as the customer base changes.

I’m sure that Time Warner in Rochester is doing well with new activations now also.

J Bart Gordon
15 years ago

Excellent story, and the Talking Points are excellent.

Visit my rant at:

http://bartgordon.net/2008/06/17/cable-companies-suck/

Solar Dave
Solar Dave
15 years ago

Thanks for creating a blog on this issue. I would like to include my rant on the cap issue.

The caps will ruin the growth of video on the web, my site does some video and I would hate for people to think twice about watching one of my videos.

Dave

Michael Pellegrini
Michael Pellegrini
15 years ago

Great website. This issue is the future of the internet. Everything hangs in the balance. I’m glad to see other people taking up the fight against metered bandwidth. I’m sure from the cable provider’s perspective, this is a fight for their lives. Within a very short period of time, streaming and downloadable video will be widely available. Right now, you can buy or stream HD movies to your PS3, and I believe Xbox360 has a similar competing service. Amazon is starting to do downloads, so is Netflix. Blockbuster is supposed to be getting into the act soon. And then there’s… Read more »

Dave Burstein
Dave Burstein
15 years ago

Good to see reporting looking closely at the issues. Feel free to pick up any reasonable amount of my work that’s helpful. Writing the DSL industries news, I’ve often reported on bandwidth costs. I’m confident that 10 cents is a reasonable and possibly high figure for the marginal cost of bandwidth That should be accurate for Frontier in Rochester and their larger centers, a majority of their customers. The total cost for bandwidth at one European carrier about twice the size of Frontier is 55 cents per user per month, and their average user does 10 gigabytes per month. These… Read more »

Kyle G
Kyle G
15 years ago

You can enjoy your “free” access to espn360!

rreay
rreay
15 years ago

Well I just tried to opt out or cancel my contract without ETF.

In order I was told:
“It will be almost impossible to reach that cap”
“The cap is in place to help your computer” (???)
“There is nothing to opt out from”
“We aren’t currently monitoring or metering usage so we can’t not apply it to you”
“There is no one who can cancel your contract with out a fee”
“I’ll have a supervisor call you in 24 to 48 hours”

Sigh…

Stephen
Stephen
15 years ago

“It will be almost impossible to reach that cap”

I hope I get that one when I call and cancel after my new service is ready. All of them are actually pretty good.

“I’ll have a supervisor call you in 24 to 48 hours”
It will be interesting to hear if you get a call back.

rreay
rreay
15 years ago

I did not get my callback.

kevin
kevin
15 years ago

this is bullcrap. i know im going to get rid on my service as will other people. there should at least be a unlimited plan for like 10 bucks more. im going to warn people. u have started a war frontier!

Phone TV Internet
15 years ago

I can understand charging by usage when it comes to broadband over a wireless network such as Sprint, or AT&T, but there is no justifiable cause in my mind for cable, or landline phone companies who are really only connecting user homes to the internet grid, (also referred to as the last mile) and not actually supplying internet service. After looking for a good resource on “last mile”, I came across this site that has a very interesting concept of the community working together and sharing the cost of building their own last mile. http://www.pbs.org/cringely/pulpit/2006/pulpit_20060629_000351.html It might also be time… Read more »

Martin
Martin
14 years ago

And why don’t you have Digg and stuff on here so we can promote your site??? Why no petition or other action?

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