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Broadband pricing is naturally evolving to usage tiers (Part 7 in a series)

 

Exploding overall broadband usage, combined with increasingly varied usage between average users and heaviest users, is naturally evolving the broadband market towards the flexibility of tiered usage-pricing over time.

Yesterday, Verizon Wireless indicated that it will begin to move its wireless data users away from unlimited data plans for single users that upgrade to its 4G LTE wireless broadband network, towards more-shared, tiered usage-pricing data plans, where with the potential added-price comes the added-flexibility of combining the usage of multiple devices of a family or a small business.

Today Comcast announced a transition from its current very-high, but static 250G monthly data usage cap, to a more flexible and expandable 300G monthly usage threshold, where a user would then have the option of buying additional usage above 300G -- at the likely cost of about an additional $10 per additional 50G used in a month. So in addition to choice of broadband speeds, the heaviest-use Comcast consumers will now also be able to choose how much more capacity they want to use/buy as well.

Both companies, which invest billions of dollars in their broadband infrastructures, are naturally evolving their pricing and competitive business offerings over time to address the exploding high-bandwidth usage of smart phones and tablets, market segments that did not even exist five years ago.

Netflix' Net Neutrality Corporate Welfare Plan (Part 10 of a Series)

Apparently Netflix is angling to become Silicon Valley's king of corporate welfare. We learn from a New York Times economics column advocating for an Internet industrial policy that "Netflix is trying to build a coalition of businesses to make the case for… net neutrality." And that the "online video powerhouse Netflix started a political action committee to complement a budding lobbying effort in support of the idea that all content must be allowed to travel through the Internet on equal terms" -- translation: always at no cost to Netflix.

But Netflix isn't in need of public assistance; it is America's video subscription leader with 23 million subscribers. Netflix has $3.3b in annual revenues, $1.2b in gross profits, $800m in cash, a 34% return on equity, and a market valuation multiple over twice the market's. And Netflix flexed its exceptional pricing power last year in raising its prices 60% without losing many subscribers.

Is Netflix the AOL of Web Streaming?

 

Netflix' erratic and panicky behavior this past year is telling us that Netflix' leadership fears they may becoming the AOL of web streaming.

Remember AOL was the company that led the dial-up narrowband market, but fell way short in transitioning to broadband success. (Investors remember AOL-Time Warner, dubbed the worst merger of the century.) Meanwhile, Netflix is the fallen star company that led the mail-DVD business, but now is struggling to repeat its offline success online with web streaming.

If one looks at Netflix' panicky behavior over the last year or so, a clear pattern emerges that Netflix' own management is very concerned about how it will successfully transition from DVD mail-order leader to successful web streaming provider.

Consider the cumulative evidence.

 

Why the Verizon-Cable Agreement is in the Public Interest

 

The evidence below shows the Verizon-Cable agreement is clearly in the public interest, if the FCC fairly reviews the agreement and all of the relevant facts, in the full context of the highly competitive wireless ecosystem.

Top Reasons Why Verizon-Cable Agreement is in the Public Interest

Increases competition: The agreement increases competition because it enables:

 

Obsolete Television Law Needs Modernization

Important free market communications legislation introduced in mid-December warrants flagging because it brings needed attention to a real and growing problem, how obsolete communications law stifles innovation, growth and consumer benefit.

See my Forbes Tech Capitalist post on the DeMint-Scalise bill, “The Next Generation Television Marketplace Act.

Top Ten Flaws in FCC’s AT&T/T-Mobile Competition Analysis

The unprecedented release of a FCC draft staff analysis opposing the the proposed AT&T/T-Mobile transaction could backfire legally, undermining its intent to backstop the DOJ's pending lawsuit against the merger.

See my Forbes Tech Capitalist post here on the "Top Ten Flaws in the FCC's AT&T/T-Mobile Competition Analysis."

 

The Politics of Regulating the Internet

As the Senate prepares to vote on the fate of the FCC's net neutrality regulations this week, it's instructive to look more closely at the politics of regulating the Internet.

Read my Forbes Tech Capitalist post here.

Netflix' Negative Growth Story

Netflix has self-torpedoed themselves a third time in just the last three months.

See my Forbes Tech Capitalist post here to learn how.

The Metamorphosis of Communications Competition -- A New Framework

For those seeking to better understand how communications competition has evolved, expanded, and accelerated to cloud communications competition, don't miss my new six-chart powerpoint presentation: "The Metamorphosis of Communications Competition," here.

My bottom line conclusion: The transformation of communications competition requires a transformation in communications law.

  • Specifically, the world has changed with technology, but obsolete technology-specific laws have not.
  • Communications policy obsolescence undermines infrastructure's utility and value and renders property less attractive and competitive.

I presented this new easy-to-understand framework for understanding exploding communications competition at a NetCompetition event today on Capitol Hill, which also featured excellent presentations by Jeff Eisenach, Managing Director of Navigant Economics, and Ev Ehrlich, President of ESC Company.

Netflix the Unpredictable

Netflix own actions have established the company as "Netflix the Unpredictable."

  • See my Forbes Tech Capitalist post "Netflix the Unpredictablehere.

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Q&A One Pager Debunking Net Neutrality Myths