Broadband Pricing Proportional To Speed Delivered

I'm considering moving home soon and checked broadband avaialability via BT. The available broadband for that area is 4 times slower for the same service. This prompted me to think, "is this a good deal" and "surely, slower should be cheaper" - This is the real world and no it is not.

But should it be..................

It would be your choice to move there, same way you might consider a property based on local schools, and the like.

If a provider can sell an up to 16 Mbps for £6.50 a month how much would you pay for
4 Meg, 8Meg, 12Meg etc

As the market stands the effort in terms of marketing is on getting us to pay more for the faster (FTTC) services now.

Most charging is based around the amount of usage since 2004

I don't know why I'm replying to what is probably a troll post, but....

Lets say the standard service is up to 24mb for £24. You decide you want to live in the countryside and be surrounded by sheep, only get 2mb, pay £2.

My great grandma lives in town, coincidentally right next to the exchange. She only uses email, but gets 24mb so has to pay £24, even though 2mb would be plenty for her.

How is that fair? You could be a heavy downloader keeping that 2mb maxxed the whole month.

Further, most of the ISPs costs are fixed per subscriber. The cost of billing, the cost of invoicing, the cost of support, a port on the DSLAM, SMPF rental from BT, the cost of the free router they give you, etc. How fast you get, makes no difference to their costs.

How much you use is the one variable cost, and someone having 4x the speed does not use 4x as much.

In your world, ISPs would just refuse to service the people who could only get slow speeds, as they would lose money on them.

Edited by nemeth782 (Sat 16-Mar-13 10:24:12)

I think there is a case for somebody paying less for slower speeds if they are disadvantaged with, for example, video streaming: on a medium length line streaming HD 720/1080p should be possible but on a long line SD 360p may not even be playable in real time.

So what happens when, due to incorrect set up/poor house wiring, the punter gets way less than the speed the ISP believes can be achieved ? Who pays what to whom ?

In reply to a post by Zarjaz:

So what happens when, due to incorrect set up/poor house wiring, the punter gets way less than the speed the ISP believes can be achieved ? Who pays what to whom ?

Well don't ISP's generally advise folks to use the test socket and isolate, where possible, house wiring if they have concerns about downstream sync speed? If, as sometimes happens, the supplied router, ethernet lead, adsl lead, micro filters and setup instructions don't provide a sync speed based on estimated attenuation then the costs fall on the ISP for investigation and line repair.

Of course there are exceptions to this DIY principle for punters where a NTE5 is not fitted, there has been a cowboy house wiring installation or the computer is not allowing full potential throughput, but surely sync speeds should be about right and if not it is the responsibility of the ISP to put it right?

There are two major cost types in providing ADSL broadband..

Last mile charges which are the same regardless of speed

Provision of backhaul. The cost of that is more closely related to the quantity of data delivered than the speed of delivery.

Within reason it costs no less to deliver 2Mbps that it does to deliver 20Mbps.

In fact as the slower speeds are generally caused by longer lines and with long lines there is probably going to be more support cost - not least from answering complaints about the speed.

In reply to a post by MrSaffron:

Most charging is based around the amount of usage since 2004

I've been wondering how providers like BT and PlusNet supply unlimited usage for a fixed fee? Is there a 'real' cost of providing every GB of data or is it just marketing?

Is it likely does anyone think that the price of FTTC will come down to a price point equivalent to what we pay for ADSL or should we just get used to paying more for a data connection?

It is actually a 95th percentile charge (if brain working) on the peak usage, so as long as that is not too big for the amount of customers they have then fine.

ISP's know the aggregate data use patterns very well

If you consider how the pricing of ADSL came down to dial-up levels then yes, I think that is more than likely.

In reply to a post by techguy:

Is it likely does anyone think that the price of FTTC will come down to a price point equivalent to what we pay for ADSL or should we just get used to paying more for a data connection?

Well not many unlimited ADSL packages are available at the £19.99pm I pay for unlimited FTTC.

That's not a bad price but alas I could not take advantage of it round here as BT has chosen to deploy FTTP which they want to charge an as yet undecided rental for (and I contacted several ISPs to ask but the indication seems to be more than FTTC) and I'd never want to go back to a traffic managed service.

Edited by techguy (Sat 16-Mar-13 18:52:51)

At the wholesale level the FTTP product has the same price points for various speeds. Only gets more expensive if you go for something faster than 80 Meg

Alas FTTP does have a very low take up, so apart from BT Retail currently you will just one or two selling both versions of the GEA service.

I shall prob stick with the unlimited O2 Wholesale based DSL I am using at the moment as I now pay the equivalent of what I used to for an old FRIACO dial up account with Eclipse and my connection is now rock solid compared the frequent drops and speed increase and decrease due to BT's DLM and my long line.

Just hope Sky leave the configuration alone.

What exchange supplies your next home?

Im thinking of moving to Stonehaven, Aberdeenshire and as the crow flies the distance to the exchange is approx 0.85 km [checked distance using this handy site, used for running http://www.usatf.org/routes/map/] or 1.56 km approx.

I'd checked BT and the figures given for that particular telephone number are estimated 3.5mb Downloaded & 2-6mb download speed range [ BT knows the figures! ]

Their infinity package offers 16.6mb downloaded and 1mb uploaded [ This is comparative to ADSL speeds at my present address, not yet upgraded for fibre yet ]

I understand the arithmetic involved I mean yeah if you want to be pedantic then you could draw lots of parallels to this argument saying BT have to pay to maintain the lines etc.......

"BT have made their money".

I'm sure there are a lot of people who have spent a lot of money on BT's support just to get their "line' working properly - were the support staff qualified technicians?

Lets not argue about facts and figures all I'm merely saying is the customer if he\she is not receiving a full product then the price should be reduced or the customer could downgrade to a cheaper and less reliable package and so on......?!

In reply to a post by denk:

.....
all I'm merely saying is the customer if he\she is not receiving a full product then the price should be reduced or the customer could downgrade to a cheaper and less reliable package and so on......?!

Oh yes ? OFCOM thinks exactly the opposite !
Small exchanges are designated Market 1, which means BT is allowed to charge the full whack, which was supposed to bring in the competition.
I many cases this has not happened, and now it never will (competition is chasing more profitable fibre )
So may of us are paying DOUBLE the price we could get from PlusNet (BT owned !) on Market 3 exchange.
That's for measly 2Mb/s. 21CN ? No chance !
And we are just 8 miles from the centre of Kent's capital, Maidstone...
Martin

Found this

http://www.weeklygripe.co.uk/a1054.asp

How many GB per month do you download?

but surely sync speeds should be about right and if not it is the responsibility of the ISP to put it right?

no, because it's a wires only product so the emphasis is on the end user to get it installed correctly.

I've had to remove RJ11 phone line connections from LAN sockets before now, so I'm aware of end user limitations

In reply to a post by yarwell:

but surely sync speeds should be about right and if not it is the responsibility of the ISP to put it right?

no, because it's a wires only product so the emphasis is on the end user to get it installed correctly.

I've had to remove RJ11 phone line connections from LAN sockets before now, so I'm aware of end user limitations

Didn't they even get a 10/100 Network LOL!

In reply to a post by denk:

I'm considering moving home soon and checked broadband avaialability via BT. The available broadband for that area is 4 times slower for the same service. This prompted me to think, "is this a good deal" and "surely, slower should be cheaper" - This is the real world and no it is not.

But should it be..................

Would you expect Ferrari to give you a discount just because you live in a city and never get the chance to move beyond 2nd gear? Or should they give all UK citizens a discount on account of all the potholes that must make driving a high performance sports car an expensive and painful experience at the moment?

Or an even better analogy - would you expect a taxi driver to charge you less because it takes longer to get you into the town centre?