Almost by definition, the industry analyst profession puts one in the business of (modestly) saying “I told you so” on a fairly regular basis—one would hope more than 50% of the time. So, it was gratifying to see yet another broadband service provider abandon plans for so-called “Usage Based Billing” (UBB ).

AT&T has reportedly ditched its “usage based billing” trial underway in Beaumont, TX and Reno, NV. A company spokesperson says they are “reviewing data from the trial, and this feedback will guide us as we evaluate our next steps." Hmm…wonder what the feedback will be?

That customers just can’t get enough of it?

As my industry colleague from Fierce Telecom, Sean Buckley, correctly pointed out in a recent article, AT&T can expect “an earful” of feedback from customers who don’t want to be penalized for going over on their home DSL use.

Gettin’ Hosed in Texas?

Does Beaumont, TX have a target on its back?

The city of just under 50,000 households can’t seem to catch a break these days. As if sitting in the path of major Gulf hurricanes wasn’t bad enough, the city for some reason has been selected by several service providers as a prime testing ground for misguided broadband pricing experiments.

Readers might remember that Time Warner Cable  chose Beaumont as the test bed for its 2008 usage-based billing experiment. Amid intense public outcry and in an attempt to avert a public relations tsunami, the company ultimately abandoned those plans. AT&T (perhaps emboldened by TWC’s success?) decided to follow suit.

I seem to recall having a word or two to say about TWC, way back in 2008. In fact, I remember that I caught some flak for calling Time Warner’s move an “operational misstep.”

Here’s an excerpt from the January 2008 report (cue harp glissando)

“As such, we expect TWC's trial to go over like a lead balloon,

resulting in a major public relations headache.”

--Usage-Based Broadband Billing: Where's the Love

Strategy Analytics, January 2008

Sounds about right.

Well, There You Go Again…

As my five year old nephew likes to say when he wants the floor, Hear my voice!

So here goes, hoping all can hear it…

Usage-based billing was, is, and will always be a dog of an idea.

It goes against the way consumers are accustomed to and prefer to pay for broadband. It angers, irks, and alienates customers. It’s a crappy idea. In a commodity business like broadband, it’s self-destructive.

The spirit of it is analogous to what’s going on in the airline industry where, apparently, we’re about to pay a fee to avoid paying a fee.

Brings Me to Tiers

There’s a solution to this problem.

By offering tiered or `package' offerings, whereby occasional users sign up for bandwidth and heavier users sign up for more, broadband service providers can arrive at the same goal-getting a handle on traffic without alienating or angering the customer base. Furthermore, a tiered offering allows the BSP to tailor the Quality of Experience (QoE)-whether it be in delivery or customer service

Continued broadband penetration depends on the BSP's ability to win customer "wallet share." Customers have grown accustomed to paying for their broadband service in a certain way, and appreciate and expect a predictable monthly bill. Dramatically altering the model, with no discernible added value, may prove to be a big mistake.

Told you so.