Last year it was noted how Netflix was planning to offer stand-alone broadband video streaming in certain unspecified countries, as long as you’re not spelled with the letters U, S and A where Netflix oddly claims there “isn’t a demand” for this kind of service. The mystery country Netflix mentioned last year appears to be Canada where Netflix is launching their broadband streaming service without tying it to DVD rentals (in fact they’re not offering DVD rentals at all). Netflix says the service officially launches this fall:

In addition to representing its inaugural international market, Canada will also mark the first streaming-only service promoted by Netflix. At the time of launch, the Netflix Canadian service will be available in English only, but the company said it expects to add French language capability over time. Canadians interested in Netflix can go to www.netflix.ca and sign up to receive an email from the company when the service launches in Canada this fall.

The press covering this announcement seem to have forgotten Canadian broadband users face some of the most restrictive cap and overage penalties anywhere, with companies like Cogeco and Rogers charging up to $5 per extra gigabyte of usage, despite paying pennies for bandwidth, plummeting hardware costs, and being perfectly profitable under the flat-rate model.

Heavy Netflix HD streaming potentially eats bandwidth like popcorn shrimp, so you can do your own math.

Of course the result will be more timid usage of the new service as an alternative to cable and greater revenues for cable and phone companies… which is exactly why low caps and high overages are imposed in the first place.

Link to the original article…

AT&T executive comments yesterday that the carrier might be ditching the current “all you can eat” iPhone data plan for usage-based pricing didn’t go over very well with either the company’s users or the press.

Many felt AT&T was blaming its customers for the company’s inability to adequate meet iPhone bandwidth demand. Others felt AT&T was continuing the industry trend of pretending that the flat-rate pricing model doesn’t provide enough revenue for network upgrades. The coverage has had echoes of Time Warner Cable’s botched attempt to hoist usage-based billing upon their customers earlier this year.

As has repeatedly been the case when it comes to AT&T’s 3G network this year, AT&T again found itself in the unenviable position of having to do damage control. As such, AT&T’s been going around to various news outlets insisting that AT&T Wireless boss Ralph de La Vega’s comments were “taken out of context.” As such, they’re providing a link to the one hour presentation where the comments were made. Here’s the transcript of the relevant bits:

I think one of the first things that we need to do is we need to educate the customers. And it s something that customers today have not been used to doing, so we ve got to get them to understand what represents a megabyte of data. And so what we re doing now is we re improving all of our systems so that we can begin to give customers real-time information about their data usage and begin to get customers educated. And I think longer-term, there s got to be some sort of a pricing scheme that addresses the usage, but that s going to be determined by industry competitive factors, regulatory factors and customer successes.

The idea that “user education” will somehow magically compensate for the capacity and network reliability AT&T failed to provide iPhone users is the kind of disingenuous language Time Warner Cable used when they tried to impose a new pricing model that lacked consumer value. Like Time Warner Cable, AT&T investors and executives are chomping at the bit to impose an unpopular usage-based billing model on both their wireless and wireline networks — simply because it generates more revenue than flat rate pricing. “User education” plays no part in the equation. User disinformation does, and there’s been a lot of it.

The argument that an already hugely profitable company wants to charge even more money for bandwidth isn’t one that sits well with consumers. As such, AT&T’s tried to sell the idea by arguing that usage-based billing is about being fair to grandmothers, while their lobbyists have spent a lot of money arguing that unless you embrace their new pricing vision, the Internet will explode. As with Time Warner Cable, AT&T’s customers see this “consumer education effort” for what it is: an effort to impose higher prices on consumers. As de la Vega himself notes, the issue will be whether regulators and consumers sign off on the idea.

Link to the original article…

The article makes no mention of publicly available financial reports from broadband providers like Time Warner Cable that prove that at the same time their profits on broadband service are increasing, the company s costs to provide the service continue to decline, along with the dollar amounts they spend to maintain and expand that network to meet demand.

Dampier also notes how the Journal misidentifies Rep. Eric Massa (who is pushing for laws protecting consumers from over-charging) and omits the potential conflict of interest in ISPs pushing for high overages while at the same time crafting massive new Internet video empires. While the Journal does note that the average user consumes just 15 GB a month (that number is even less, according to a recent Cisco study) it omits just how low many of these proposed caps have been (Frontier thinks 5 GB a month is reasonable for an entire household).

The Journal also also helps the industry make caps sound more reasonable by measuring them in e-mails sent, an annoying and silly metric used by ISP marketing departments. Most importantly though, the Journal helps sell the idea that a shift from flat-rate pricing to the industry’s version of metered billing (not to be confused with pure per byte billing) is both necessary and inevitable. In reality, it’s neither, and the metered billing models we’ve seen proposed by carriers so far are little more than price hikes disguised as altruism and fairness.

It doesn’t inspire fresh confidence in the American press when a consumer covers the full scope of the metered billing discussion far better than the nation’s supposed top business paper and its corral of staff writers.

Link to the original article…