Comments on article found at: http://online.wsj.com/article/SB10001424052748703384204575509640930858752.html?mod=WSJ_Tech_LEFTTopNews
Okay, Verizon has announced it will move towards metered pricing. Good.
I know folks think all-you-can-eat plans are good for the consumer. All-you-can-eat plans are easier for customers to manage and deal with. All-you-can-eat plans are even easier for carrier billing departments. However, all-you-can-eat plans are a major network nightmare to manage.
Building a network to handle an unimaginable amount of traffic at any time of the day is difficult to engineer and expensive. Keep in mind it is not just a matter of switching but also a matter of network bandwidth. Bottom line the network of networks is already approaching overall capacity constraints. Usage based pricing may provide an opportunity to ratchet down the traffic usage.
Bear in mind I am no fan of pricing discrimination, however, I am a big believer in building a network to meet customer needs.
I do not have any specific data on hand to point to, but I believe that the carriers can create more revenue opportunities for themselves and create higher quality content for consumers by moving to metered pricing. Today’s flat rate plans do not generate sufficient revenue for the content creator and owners. A couple of years ago I had supported prepaid plans for wireless media; I had viewed prepaid media plans as being flat rate for voice and value priced for media. I had not been thinking usage based pricing for media but rather media pricing based on the content’s value. My thoughts were and still are that traditional minutes-of-use based pricing could not properly represent the value of online (wireless and landline) media. I still believe advertising is a component of wireless media that will be forthcoming. If people want to see quality content then you need to pay the people who create it.
Current pricing plans do not afford the content creators and the artists the revenue opportunities they are entitled to.
Will consumers have to pay more for their content? Probably, but I believe that the content will be superior than what we see today.
In the end, I think Verizon’s plans to move towards metered pricing are sound.