[sliverstorm]

What informed consumer would agree to this?!

Informed consumers that know they don't use that much data? Not everyone streams movies or what have you.

If I cancel my Netflix subscription and switch back to physical media, as I have contemplated doing, I will be < 5GB.

[stevep98]

> Informed consumers that know they don't use that much data?

This is part of the problem. It's very difficult for normal customers to understand how much data they're going to use. When choosing a phone data plan, my dad asked me what plan to go for. How much does google maps use? No idea..

Also, extremely difficult for the customer to dispute the particular data usage, because they don't have access to the audit data that comcast has, and they don't have the technical skill to determine that they really accessed "turnerhd-f.akamaihd.net" when visiting cnn.com anyway. Contrast this with the relative ease of checking phone numbers you don't recognize on your itemized phone bill.

Lastly, most objectionable is this idea of charging penalties for overages. In most industries, if you get more, you pay incrementally less. If I buy a hamburger, soda and fries, I get a discount on the price. If I buy 1000 widgets I get a better price than 10 of them. Comcast and the telcos turn this on its head by charging penalties for overages.

Regulators could force carriers to pro-rate based on the price you paid for your service. For example:

ISP offers 3 packages: 100 GB for $10/mo (overages charged at $0.10/gb) 300 GB for $20/mo (overages charged at $0.06/gb) 750 GB for $30/mo (overages charged at $0.04/gb) 2000 GB for $40/mo (overages charged at $0.02/gb)

EVEN better, offer automatic price brackets... Why make people worry about choosing the right plan. People don't want to make this decision.

First 10GB: $0.10/gb Next 20GB: $0.07/gb Next 50GB: $0.05/gb each GB after that: $0.02/gb

(for illustrative purposes only.. I haven't done the math to see how it compares with current comcast offers)

I don't understand why the telcos think massively penalizing people for going over is a useful pricing model.

[sliverstorm]

Have you ever read your electricity bill? They do just that. Your first 1000kWh cost 0.07$ apiece, your second 1000kWh cost 0.12$, your third 0.14$ (for example)

[ars]

Where do you live? I've never seen a bill like that.

If anything, if you agree to use a lot of power you will have a larger fixed price, but a lower per kWh price.

[tzs]

It works that way in California for households using PG&E, Southern California Edison, or San Diego Gas and Electric Company [1].

Same up here in Washington for service to a single family residence through a single meter for customers of PSE [2].

[1] http://www.cpuc.ca.gov/NR/rdonlyres/6AF20251-011C-4EF2-B99D-...

[2] https://pse.com/aboutpse/Rates/Documents/elec_sch_007.pdf

[yusyusyus]

quite a few of the providers in Texas are exactly the opposite strangely.. they bill a surcharge for using less than some fixed KWh. i.e. I get charged $5 if i use less than ~500KWh in a month.

[sliverstorm]

That's demand pricing, which is the other pricing option.

The two models I am familiar with:

- Normal tiered pricing. Low usage is cheap per kWh; high usage is expensive per kWh. This is because of inflexible production capacity.

- Demand rates. You pay a large fixed price, get a lower kWh price, and (this is key) contractually agree to never exceed X amperes. The higher X is, the higher your fixed price. This is a special plan structured for people who need a lot of power, but only at a modest rate of consumption- think baseboard heaters. Again, this model is constrained by inflexible production capacity.

[qnr]

Not the parent poster, but it works the same way in Thailand. Here in Bangkok first 150 kWh are cheapest, 150-400 are more expensive and 400+ is the most expensive tier.

[slavik81]

Is this actually how electricity bills work? Mine has always been included in my rent, but I don't see anything like that on the sample bill for my local utility. Nor does that pricing scheme make any sense to me. Why would the utility charge you more for your second 1000kWh than for your first?

> (grandparent) I don't understand why the telcos think massively penalizing people for going over is a useful pricing model.

It makes no sense to me, either. It's like they don't actually want to sell more bandwidth.

Maybe demanding big penalties from people who accidentally go over is more profitable than actually selling to people who actually want more bandwidth.

[jarek]

British Columbia, where hydroelectricity is cheap and plentiful, has a two-tier structure like that. The cut-off isn't exactly 1000 kWh, of course.

The logic is that the utility company plans for generating a "usual" baseline amount, and peaks and use beyond anticipated "norm" are more expensive since you have to spin up/buy additional capacity. In B.C. at least the tiers are set up so that the first category will cover most "average" use.

Also in many places electricity prices are government-regulated to a greater or smaller extent, and a government might structure pricing like that to try to reduce overall energy use or subsidize the lowest users who might be presumed to be poorest.

[meowface]

But still, the only benefit is you save $5/month. And if you accidentally go over, perhaps when someone links you a video, then you'll be losing a lot more than you might save.

I don't really see any advantages. It would make more sense if they said they'd cut your bill by 50%, or something.

[EStudley]

If you go over 5 GB you actually lose that $5 savings, so no matter how much over you go you are losing out.

[johnward]

At 5GB it's going to be hard for my grandma to stay under the data limit and she doesn't even have a computer.