Wednesday I was running short on time and could not finish the description of the proposed changes to bandwidth utilization pricing. At its core, it is simply a way for the cable companies to increase prices for access to higher speed bandwidth. However, the result may be to push America even further down the list of countries that have broad bandwidth coverage and up the list for the price of our bandwidth. Many others and I believe we need to approach the deployment of broadband with the same strategic intent as we did the interstate highway system. The country will benefit for years to come if deployment is pervasive and its use ubiquitous.
Comcast and Time Warner Cable are already testing tiered usage based pricing. In some ways, all telecom providers have usage based pricing. The difference is that Broadvox and most service providers decrease their pricing as usage goes up. We also decrease our pricing as the customer's commitment to us deepens. We do this because of competitive pressures but also because it makes business sense. It should be noted that Cablevision has rejected the imposition of caps or usage based pricing. They will continue to offer a flat rate for users, which should ultimately increase their users' commitment to them. We'll see.
So how does this blog end? It is all about the next generation of IP related applications. I started this because the cable companies are the primary bandwidth providers that are threatening the expansion of VoIP/SIP Trunking. When they throttle back packets because a SOHO is sending more bytes than average for a given neighborhood, they negatively impact voice quality. That SOHO does not care if the degradation is intentional and not related to the technology. He or she needs good voice quality to conduct business and we, members of the IP Communications ecosystem, discover that we lose.
We do have a means to address this situation. We can do it through competition (thanks, Cablevision). We can do it through regulation (thanks, Mr. President for the $7 billion for broadband deployment). And we can do it through some level of government regulation/direction (thanks to a still without permanent leader, FCC).
See you on Monday with another great recipe! Any ideas?