Usage-Based Broadband Billing vs "Channels"

[Commentary] The usage-based broadband billing model seem reasonable enough, but it is destined to fail for a number of reasons: 1) Consumers don't understand it, 2) Bills could get really big, 3) ISPs would be changing price without improving service, and 4) even wireless carriers are moving away from the model.

The good news is that hidden within the Federal Communications Commission's recent Comcast slap down is a path forward for broadband operators yielding superior traffic management while also enhancing revenue opportunities. FCC Chairman Kevin Martin specifically states that "We do not tell providers how to manage their networks. They might choose, for instance, to prioritize voice-over-IP calls." The Order clearly opens the door for service providers to promote certain traffic classes in order to obtain the service quality necessary to satisfy consumer expectations. As a result, many broadband service providers are experimenting with service models wherein subscribers may optionally purchase quality of service (QOS) -specific "channels" that operate over basic broadband Internet access. Channels could be tailored to applications such as video, VOIP, gaming, or corporate VPNs. Channels shouldn't be thought of as merely prioritization, rather they are specific allocations of bandwidth.

In some ways QOS-specific channels are actually a form of usage-based billing but the metric is expressed in such a way that subscribers can more readily understand what they're getting. It is also a compelling improvement in the service and therefore more palatable to consumers. This model has the potential to please all parties. Net socialists get a basic broadband service in which all packets are treated the same. Broadband operators get better engineered networks and new revenue opportunities. Consumers can purchase service bundles that best reflect their needs. And, best of all, regulators have blessed this approach.

(Kevin Walsh is vice president of marketing at Zeugma Systems.)