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While residential customers face the threat of Internet Overcharging schemes designed to ration their use of the Internet with excessive pricing combined with usage limits, business customers are finding the opposite: providers rolling out several new innovative services designed to control costs and increase broadband flexibility.
Verizon Business‘ Ethernet Virtual Private Line Service customers, who enjoy enormously fast speeds over a fiber-based network, will now have the ability to customize their bandwidth on-demand, through an online control panel.
Verizon EVPL Dynamic Bandwidth enables customers to raise or lower their broadband speeds as needed, and pay for their broadband service based on the speed they select. The service is designed to maximize savings for businesses that have a periodic need for higher bandwidth, but don’t feel justified paying for a higher tier of service that will go unused at other times. A customer accesses an online control panel, reviews pricing for different levels of speed, and then selects the option that best meets their needs.
Customers can raise or lower both the upload and download speeds once every 24 hours. The requested capacity is provided within 60 minutes, and the control panel lets customers schedule bandwidth needs in advance.
The Dynamic Bandwidth service supports speeds between 1Mbps all the way up to 1000Mbps, depending on available facilities in your area.
“There is an insatiable hunger for bandwidth as technologies such as video transmission become more widely adopted by enterprises,” said Blair Crump, worldwide president of sales with Verizon Business. “Our self-service dynamic bandwidth capability allows our EVPL and Private IP customers to make the most of their networks, at their convenience.”
David Hold, senior analyst, network services with Current Analysis, said: “Verizon Business is delivering a unique value proposition to the Ethernet services market with their new dynamic bandwidth capability. With the proliferation of sophisticated, bandwidth-intensive applications, most organizations are demanding greater network capacity, and this new capability will help customers improve their return on investment in EVPL by only paying for greater speed when needed.”
Speed-based tiered pricing is familiar to consumers, and does not raise the same level of concern that consumption-based billing schemes do. It is based on the premise that those heavy users of broadband will naturally gravitate towards higher speed, more expensive tiers of service to enjoy faster speeds. The provider’s premium pricing also guarantees premium profits.
While residential customers bear the brunt of Internet Overcharging experiments based on data consumption, most business-class customers curiously escape such limits and fees. Indeed, if the rationale for such pricing is based on demands placed on the network infrastructure, business customers, who face pricing commensurate with their anticipated higher usage, should be the natural first candidates for experimentation, not the ones exempted from it.
Verizon Business’ new speed based tiering demonstrates that there is money to be made providing customers with their choice of speed, without alienating them with unwarranted usage limits and the penalties and fees that follow those who exceed them.
Other stories of interest:
- Rochester Business Journal Survey Finds Western NY’ers Overwhelmingly Opposed to Tiered Pricing Plans
- BREAKING NEWS: TW Questioned on Usage Based Pricing
- MediaPost’s “Online Media Daily:” ISPs Still Likely to Push for Metered Pricing
- So-Called “Expert Network” Guy Suggests “Do-Gooders” Made Bandwidth Providers Throw Caps On Customers
- Revisited: Laurel Lane Is The Central Front Of The War On Bandwidth Hogs
Ok then my question is this a good thing or a bad thing?
Are you listening Time Warner? THIS IS A GOOD BUSINESS PLAN! It’s only a shame that it’s focused solely on business customers.
Perhaps with some modifications (and maybe a few more restrictions on the frequency of changing the speeds – like once a month) this could be adapted for residential customers as well. That way the _customer_ can “experiment” with what speeds they actually want vs. what they can afford and more accurately shape their own bandwidth mostly likely to the benefit of the ISP (I’d be willing to guess most customers would keep their service between 1Mbps and 7Mbps for responsive but not extremely fast access at a reasonable price.)
ISP’s won’t give this control to residential consumers because the typical residential consumer don’t understand bandwith and speed and gigs. All they really know is that faster is better until it hurts in the purse. Who wants yet another thing to worry about…
Wife: “Honey, are you a sleep?”
Husband: “I was…”
Wife: “Did you turn off the lights downstairs?”
Husband: “Yes”
Wife: “Did you turn down the bandwith for the night too?”
Husband: “I don’t remember”
Wife: “Well, someone should go check.”
Husband: “Yes, someone should.”
You’re saying ISPs are actually *concerned* about their customer’s well-being as opposed to their pocketbook?
Somehow I highly doubt anyone at Verizon or TWC or Comcast will lose sleep worrying about whether Joe the Plumber is subscribed to the right speed tier so as not to go broke.
Besides, I have no illusions that residential customers would not have nearly as fine-grained control over their bandwidth as enterprise customers, but the ability to change it from month to month might be acceptable. You can make a change at any time, but whatever the speed settings are set to on midnight of your billing cycle is when it actually changes. Or maybe it always gets set on the 1st of the month for self-service and you have to call customer support to change it mid-cycle for extenuating circumstances (like your kid boosted it to 15Mbps and you can’t afford the bill if it stays that high all month).
Obviously there are kinks to work out and some protections need to come into play (perhaps it can warn you what your bill will be for the following month if the requested speed change is made — easy to calculate because it’s not usage-based), but generally speaking this is a MUCH better idea than consumption based billing.
With a little tuning I’m sure I can find a speed that’s right for me and as my finances allow and my demands increase I’ll eventually bump up my connection speed. I have friends I know right now who would start at 15 or 20Mbps and pay whatever rate (within reason) because they: run their business from home, play a lot of online games, watch Netflix or other streaming video online, simply want the fastest Internet they can afford, any number of other reasons.
On the other hand there will be plenty of people who will likely turn down their speed because it’s not as important to them as a manageable bill.
As always realistic and acceptable pricing will be the key here, but speed-based tiers as opposed to consumption-based tiers are one thing many of us on this site (and elsewhere) have stated zero opposition to.
The current scheme is speed-based but with only two or three very course “tiers” if you will — slow and cheap, fast and moderate, slightly faster and slightly pricey. Creating a customized (or at least far more granular) tiering system based on speed is the only way I can see consumers accepting by and large. Some accept the CBB plans for now because either they’ve been convinced they’re funding the high-use users down the street or they simply don’t think they’ll ever be affected (most likely because they have no real idea of how much they use and we still don’t have a gas gauge for the Common Man to help put that into perspective).
Frankly I think the best option is provide the opportunity to customize your speed but still offer basic service levels as they do today. People who aren’t interested in tweaking their connection can pick a basic service level. Others (the more technologically savvy or the “heavy” users) will more likely than not opt to tweak their connection to suit their lifestyle and their wallet.
In the end the ISPs win. Their pricing scheme should be set up in such a way that they’re not losing money (and if they are then their sales & marketing team isn’t worth anything) and customers feel they have control over their Internet spending without the stress and hassle of watching a meter and paying overage fees at a outrageous markup.
Brion: Some times I don’t understand what was was written. Seems to me a business class service is the way to go. Something like $79. Sorry sometimes I can be real stupid You younger guys always can figure it out and I depend on you. Thanks
This is something that providers have been doing for years. It’s much better than PowerBoost, and unlike restricting how much data you use, this actually pleases people by allowing them to adjust their line speed on the fly, with them only paying for that extra speed ONLY when they need it, that plus they’re not forced into anything as the user can control the line, and if you’re only using the line for very light things you can lower your bill by turning down your line speed. Sounds good to me, that with no caps forced upon you as well. Just think about it. Take a resort for example. Many times, T1 speeds or even 6Mbps would satify the bandwidth needs for the entire building, but say a load of people come in, a technology convention takes place, or demand for internet is high on demand for days. Instead of the resort paying for a connection for a month or two that’s excessively large for the normal demand, when the connection starts to be stressed out, just boost the speed, take on some extra charges for the boost, and then turn the speed right back down, without the hassle Residential customers typically deal with, with having extra charges for speed adjustments charged to your bill, sometimes waiting days/a week to get your speed adjusted, having to go through a billing department, etc. That, plus it saves the resort tons of money as well.
For those wanting the direct link to the burstable speeds and such, this should be it.
http://www.verizonbusiness.com/products/internet/dedicated/#details-ethernet
“…lower your bill by turning down the line speed…”
Sounds like lowering your water or power bill buy using less or turning the lights down lower (first setting of 3-way bulb for example).
Bad analogy I know, but it’s actually much closer of an analogy in terms of user control than CBB is. The theory about consumption based billing is that if you use less, you pay less but the reality is you can’t keep from using some bandwidth (advertisements, viruses, spam, bots, modem chatter to/from the ISP). If your costs are predictable (i.e. not based on usage, but based on a flat rate for speed), then people can budget Internet access.
I’d argue that if you’re in a family on a budget and Internet changes from predictable to relatively unpredictable (due to CBB) then the Internet will become an unnecessary luxury for those households. On the other hand, if the costs can be controlled and limited by simply subscribing to an unlimited (but slower) access plan, then the Internet remains in the budget, the ISP continues to get money it would have otherwise lost, and everybody’s happy.
If in the future that family has more money in the budget, maybe the ISP will get a little more.
To me CBB vs. speed-based billing (SBB) is about the ISP imposing itself on your wallet vs. the ISP working with you to find an acceptable plan.
But I’m just too “customer focused” as some CEOs have been accused of being by their board of directors.
This basic approach–speed-based tiers vs. volume-based tiers–makes a lot of sense. In fact, I’d go so far as to say that makes SO much sense that we can just about guarantee that TW won’t adopt it unless forced to by law or competition.
The best part of it, in my opinion, is that it eliminates the need for customers to constantly monitor their monthly running total of bandwidth used. Even with some serious restriction, like a subscriber being limited to changing the speed setting twice per month, I would still consider this vastly better than what TW is planning for us all.
I like this idea. Of course TW is never going to go with a plan like this. They rather screw customers. I need to more into an area that has FIOS.
[...] This post was Twitted by BrionS [...]
No Rob: What we need is Verizon here now. I don’t care what
Phil says. Phil and I both live in a golden area plenty of wire and
Plenty of money and if it is being blocked by government or local
bs that needs to be uncovered and brought to court. I won’t
Back down on this. There is no reason. That Tel com bill says
Anybody can join the club and it includes Verizon. No one can
Tell me they get a better return in Pen Yan then they could get
Here. Why do I see myself getting worked up and angry?
Stupidly and stubborn comes to mind along with politics.
May I add speed is no issue… So I just put it in the background and let it
simmer. Data is Data not a big deal. I still get the same things in the end
no matter how long it takes.