Metered Broadband Requires Smart Back-Office

Last week AT&T made waves, confirming it would institute monthly data caps on its fixed broadband services. Starting May 2, it will impose a monthly data cap of 150 gigabytes (GB) on users of its DSL broadband service and 250 GB on subscribers to its U-Verse service. Consumers who go over this limit three times across the life of their accounts will be charged $10 for every 50 extra GB.

Metered billing and usage caps are not entirely new in the wired broadband ecosphere. AT&T, itself, ran trials from 2008-2010. Time Warner Cable briefly instituted consumption-based billing in 2009, but backed-off under extreme bad publicity. And other MSOs, such as Comcast, have caps on usage that are so high they affect only the top one or two percent of users.

In fact, AT&T claims its new usage caps will affect only a small percentage of its users that consume a disproportionate amount of bandwidth. But AT&T’s move may presage a new seriousness about metered billing among broadband providers. This was all forecast last fall when Sandvine released a report, showing that Netflix represents more than 20 percent of downstream traffic during peak hours on fixed-access networks. (For more, see Netflix Delivers One-Two Punch to Video/Data Providers).

For OSS/BSS companies such as Amdocs, the prospect of metered billing among fixed broadband providers could mean new business opportunities – for operators, as well as Amdocs. Ray Bennett, director of marketing/BC&S Division, Amdocs, says operators can leverage metered billing to provide more personalized services and upsell more usage.

"Not only is this metering a strategy for keeping my costs in line with the usage of my pipes, but also to more highly personalize my services," says Bennett. "I want to offer the ability to give video consumption capability to a subscriber on my network across all the devices they consume on, because it’s less bandwidth intensive on an iPhone than it is to a TV. I can allow you to tailor your package."

But keeping track of usage across myriad devices will require some sophisticated technology to recognize the device, verify the owner, authenticate the service, apply the charge and notify the user if he’s nearing his consumption limit.

Bennett says, "Devices are the pain points you see in cable. Some devices are too stupid; all the pre-EBIF stuff is useless. Even some EBIF stuff is going to seem pretty old. New IP-based technologies need to be leveraged in cable to unify the architectures."

He also says providers should stop speaking about gigabytes and start speaking the language consumers understand: gigabytes should be translated to movies. If a subscriber is about to exceed his data limit, the operator can advise and ask if he’d like to purchase more movies.

-Linda Hardesty