ISPA Meet BT - Usage Based Charging
Posted: 15th Sep, 2004 By: MarkJ
The UK Internet Service Providers' Association (ISPA) has posted a summary of its recent (10th Sep) meeting with BT regarding the operators proposed Usage Based Charging (UBC) broadband prices:
The UBC scheme is due to complement the recently introduced Capacity Based Charging (CBC) scheme. Many ISPs hope that UBC will offer an affordable alternative CBC given that IPStream services were recently subject to significant price increases.
At the meeting, BT provided calculations on three possible price points - £0.33, £0.45 and £0.58 per kilobit per second per month. At present BT cannot give a commitment that the final price will be within this range. BT also stated that any final price they propose will be subject to scrutiny and possible change by Ofcom. ISPA is concerned that BT will not be able to make the final price available for some time.
ISPA is calling on BT to revisit the proposed UBC pricing model that at present places UBC at 65 per cent more expensive than CBC and puts the existence of small ISPs (SME ISPs) in jeopardy.
ISPA is also concerned that whilst end users expect retail prices for Internet services to remain the same for anything up to a year, BT can change any of its wholesale prices by giving only 28 days notice.
ISPA would like BT to answer the following questions on the indicative prices the carrier outlined.
1) At present the suggested price range is quite broad, and the upper end of the price range is nearly double the lower end. Why is BT unable to provide a narrower range of prices that will effectively indicate where the final UBC price will lie?
2) Why are the indicative prices so high when international transit prices imply they should be a lot lower?
3) BT seemingly wants to charge a premium because it believes it is bearing a risk in providing the bandwidth, but at the same time BT is proposing to charge on peak usage. How can BT justify this and why can't charging be based on average usage rather than peak usage?
Once again BT has agreed to meet with ISPA at the end of this month to answer those questions and, hopefully, offer some concrete measures to alleviate the IPStream price increases. Wed strongly recommend reading the full press release as there are some interesting examples:
http://www.ispa.org.uk/html/media/ispa_proposedUBC.html
The UBC scheme is due to complement the recently introduced Capacity Based Charging (CBC) scheme. Many ISPs hope that UBC will offer an affordable alternative CBC given that IPStream services were recently subject to significant price increases.
At the meeting, BT provided calculations on three possible price points - £0.33, £0.45 and £0.58 per kilobit per second per month. At present BT cannot give a commitment that the final price will be within this range. BT also stated that any final price they propose will be subject to scrutiny and possible change by Ofcom. ISPA is concerned that BT will not be able to make the final price available for some time.
ISPA is calling on BT to revisit the proposed UBC pricing model that at present places UBC at 65 per cent more expensive than CBC and puts the existence of small ISPs (SME ISPs) in jeopardy.
ISPA is also concerned that whilst end users expect retail prices for Internet services to remain the same for anything up to a year, BT can change any of its wholesale prices by giving only 28 days notice.
ISPA would like BT to answer the following questions on the indicative prices the carrier outlined.
1) At present the suggested price range is quite broad, and the upper end of the price range is nearly double the lower end. Why is BT unable to provide a narrower range of prices that will effectively indicate where the final UBC price will lie?
2) Why are the indicative prices so high when international transit prices imply they should be a lot lower?
3) BT seemingly wants to charge a premium because it believes it is bearing a risk in providing the bandwidth, but at the same time BT is proposing to charge on peak usage. How can BT justify this and why can't charging be based on average usage rather than peak usage?
Once again BT has agreed to meet with ISPA at the end of this month to answer those questions and, hopefully, offer some concrete measures to alleviate the IPStream price increases. Wed strongly recommend reading the full press release as there are some interesting examples:
http://www.ispa.org.uk/html/media/ispa_proposedUBC.html
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