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12
Aug
2014

Providers Are Turning the Internet Back Into Cable Television Styled Bundles for Profit

by Bill

ISP confusion with tiered pricingBefore the internet existing consumers subscribed to cable television services and purchased plans that included bundles of channels at a variety of tiered levels. One of the biggest gripes was always that customers were forced to pay for many channels they never intended to actually watch, just to get access to a handful of channels only available as part of the larger package. Even after the internet became incredibly popular, cable networks continued to provide tiered subscriber plans while pundits repeatedly claimed that they would inevitably have to move toward À la carte pricing to keep pace with the wide open standard being set by the World Wide Web.

At the core of the rocket fuel propelling internet use toward ubiquity was the notion of Net Neutrality. Since every provider was required by regulation to serve up site content from any source in an agnostic way, without giving preference to one florist website over any other for example, the web automatically took on the sort of À la carte existence that cable packages have never evolved into. Newcomers and entrenched stalwarts alike were left to battle for market share based solely on their own merits – and while deep pockets are always advantageous, a massive number of new start-ups became leviathan brands in their own right thanks largely to an ecosystem that promoted innovation through competition.

Now, as Net Neutrality quickly fades into history and massive bandwidth backbone carriers seek to plump up their profits, some are seeing a trend toward repackaging the entire internet into tiers much the same as the loathsome ones cable companies have preserved. It should not surprise anyone that many of the internet carriers are exactly the same cable companies that have long fostered the packaging of content and inclusion of undesirable channels in prefabricated plans.

How can the internet be repackaged as tiered plans? Through the power of free data. As examples, T-Mobile recently announced it will be allowing its customers to stream and unlimited amount of music from popular platforms like: Spotify, iTunes, and Pandora without any data charges. Sprint has likewise announced a new offer as part of the Virgin Mobile pre-paid service to provide unlimited social site access to Facebook, Twitter, Instagram, or Pinterest for $12 per month with unlimited access to all four priced at $22 monthly. At first these sound like great deals, until you begin to unravel the plan it all leads to eventually.

What happens when you buy a phone, get “free” data from any of 100 or 200 different sites and services while having them all pre-loaded onto your device as app icons that cannot be moved or deleted? Yes, sure you can still browse the internet or add new apps in poorer placement on your own device and while the sites are free to use, every time you access them you end up getting charged for data transfers to and from your handheld mobile device.

The result is a phone or tablet or other device that essentially gives you a package of channels for included, with every other channel out there suddenly being offered as part of a premium tier. Adjust the pricing a bit, create a few more pre-made packages with a few overpriced plans and you suddenly start to have a new paradigm that looks frighteningly familiar to anyone who has ever wanted to watch a movie on HBO and found out it’s somehow cheaper to do so if you also pay for the Golf channel and the Eastern Slovenian Kabuki Ballet Network as well.

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