AT&T has announced a trial in the USA for usage based broadband charging for its customers in Reno, Nevada. This follows on from a similar trial in June by Time Warner Cable and also a 250GB cap on usage placed by Comcast on its customers. The move towards metered charging is I believe inexorable.
We are in for interesting times here in the UK. BT has just hiked it’s ADSL bandwidth costs to service providers. This will make ADSL more expensive in the UK. Whether this price rise gets passed on to end users remains to be seen. It certainly makes life more difficult for service providers who were already likely to move to usage based charging.
Of course BT increasingly has more competition in the guise of companies installing their own kit in BT exchanges – what’s known as Local Loop Unbundling. This competition is largely in the consumer space with broadband sometimes being packaged as a “free” element of a deal that might include line rental, minutes and, in some cases, TV. The level of service that this “free” broadband brings is unlikely to cut the mustard with most businesses.
So what does this mean?
- In the first instance a quality broadband connection is likely to get more expensive. Most LLU players don’t have a wholesale offering that B2B service providers could resell.
- Secondly broadband customers in rural areas are likely going to have to pay more for their connectivity because the LLU operators don’t provide broadband in these “uneconomic” areas. This will exacerbate the so called “digital divide”, already a hot topic in the light of the high anticipated cost of rolling out Next Generation Access to rural areas.
BT recently removed the installation costs associated with (some) new connections to their ADSL network. On the face of it this latest move looks like they have simply shifted these costs onto the line rental. The country would certainly benefit from more competition in the wholesale space.