Carriers have always loved to meter. They are utilities after all. Of course, then came the Internet, dirt cheap bits, and a generation of consumers brought up on free. Wanting to charge on a piecemeal basis but fearful of consumer outrage on being nickel-and-dimed, the telecom industry has been adopting pricing tiers (see AT&T) as a compromise solution.
With tiers, the meter isn’t running. Instead, customers pay a fixed amount for a given level of service (speed, capacity, quality, etc.) This has traditionally been the arrangement in business telecom—of course, in that world you’re protected by service level agreements that pay out for disruptions, excessive latency, and packet errors.
I was excited to learn about an interesting variation on the pricing tier model that was revealed in a letter from Verizon. In its latest marketing campaign, Verizon promises to lock in a stingy 1 Mbps broadband for its subscribers at $19.99 per month, forever: “...low price you can count on, month after month, year after year.”