GCN: Network: Broadband: Borson Proposal:

Usage-Based Pricing

The case for charging by the byte

See also: Technical details | Broadband Provider Agreement | Subscriber Agreement | Request for Proposals

Introduction

Compared to October, 2002, users are consuming more bandwidth.

• Average consumption is up 25% from 124 MB to 156 MB.
• The proportion of light users (less than 150 MB) is down from three quarters to two thirds.
• The number of heavy users (more than 600 MB) is up from 2 to 9.

The disparity in usage by different users is growing:

• The lightest two-thirds of users together consume less than a quarter of the bandwidth.
• The heaviest 6% of users consume just under a third of the bandwidth.

So even though the number of paying subscribers is up, each is using more bandwidth. GCN will soon need to pay its Internet Access Provider more because of the increase in total usage.

Currently, the heaviest users have to work hard to consume a gigabyte (1 GB) or more; they are on-line up to 300 hours/month. When broadband access becomes available, it will be much easier to use large amounts of bandwidth. We anticipate performance of at least 500 kilobits per second (Kbps). This is 62 kilobytes per second (KBps) and at this speed it will take only 4 to 5 hours to download 1 GB instead of the 77 hours it takes over a modem. Entirely new uses of the Internet will become possible, including streaming video, Internet radio stations, and downloading music.

Because of our remote location, GCN pays much more for Internet access than other Internet Service Providers (ISPs) do. And we are billed for usage; We have reached our limit for use at the "Tier 2" level and will soon be billed another $500/month for an additional 10 GB/month. As broadband becomes deployed we will soon consume that amount and have to pay even more. So Broadband access will greatly increase the need to charge GCN subscribers more to cover the cost of increased Internet use. We need to raise at least another $500/month based on current usage to pay for Tier 3 from our provider.

The two-thirds of users who still use less than 150MB/month are not contributing to this need and I propose that their rates not increase. Following is a proposal for usage-based pricing that would raise another $959/month based on June, 2003 usage. As subscribers switch to broadband and increase their usage they would move to higher tier levels and pay more, allowing GCN to pay its provider for the increased use.

• See usage-based pricing proposed in July, 2004.
• See more detailed usage report and pricing options.

GCN: Gustavus Community Network: Of, by, and for residents of Gustavus, Alaska
Last Revised: 11/03/2007 - Send feedback to webmaster@gustavus.ak.us