Carrier Evolution
It is an unquestioned fact that a small percentage of broadband users, on virtually any network, use vastly more data than typical users do. The top one percent of data consumers account for 20 percent of the overall consumption, for example.

In the absence of mechanisms–or demonstrated end user demand–to price by value, rather than on a flat rate, most service providers rely on simple monthly data caps to attempt to regulate usage overall. But that doesn’t necessarily affect peak-hour usage.

One issue is that users vastly prefer “buckets of usage” with predictable recurring costs, to metered pricing. So peak-hour pricing would introduce some element of pricing uncertainty, which consumers presumably would not prefer. Presumably a better tactic would be creation of “additional fee” services that provide quality of service at peak hours, for users willing to pay.

Some will object to such policies as creating a “two-tier” Internet. Others will simply say it offers consumers choice.

But are heavy users the problem? The question might seem silly. If the big problem for an access provider is peak hour congestion, then heavy users would seemingly have to be part of the analysis. But the question some would ask is “who are the heavy users, at peak hours?” That might be a different question than “who are the heavy users, over a billing period?”

Some argue that bandwidth caps do not necessarily alleviate congestion problems. Do data hogs cause congestion? If not, then it makes more sense to use other pricing and value mechanisms to shape demand.

It isn’t immediately clear whether users would prefer such a value-based scheme. It isn’t clear whether regulators will allow such value-based pricing, which might price at “peak” rates and off-peak” rates, as electrical power services often do. But there has been quite a lot of thinking about the utility of pricing broadband access differentially, according to its value, rather than as a flat-rate commodity.

The first step, though, is to better understand actual usage, whether by typical users or power users. Analyst Beno

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