Digital Home Thoughts: Cost Analysis of Metered Broadband

"When it comes metered broadband, most consumers don’t understand how its implementation could affect what it costs them to download content. So I decided to compare how much, depending on which of the nation’s top ISPs’ metered bandwidth plans you choose, it would cost to rent the teen vampire flick “Twilight." And what did I find? That in almost all cases, the decision to download the movie will cost more than just the $3.99 rental fee — sometimes much more."

While I understand the sentiment, the conclusions are inherently flawed since it does not differentiate between fixed and variable costs. If you don't go over your allotment, there is zero extra cost involved in the download. This is similar to your cell phone plan, sure there is a variable cost per minute if you go over your allotment, but if you don't you really don't care what the variable cost is. If anything, I think metered broadband is a good idea as long as the included base bandwidth is high enough to cover the needs of 99.9% of customers. The remaining 0.1% is probably so far from the norm that it seems reasonable for them to pay extra for their much higher than average usage. But, the concept of metered bandwidth will probably create a huge amount of confusion and fear amongst customers, that it may not be worth the effort, case in point, Time Warner just decided to back of on their attempts at metering service.