Usage-Based Billing and the Cost of a Gig

Posted: April 6th, 2011   |   Category: Case Studies | Industry News | Planning | Strategy

How Much is that Gigabyte in the Window?

The answer:  not much.

According to a review by Michael Geist, the average cost of a gigabyte of data transfer (that’s the volume of information in bytes that you download or transfer doing things like watching movies online, getting email, doing business, etc) is about $0.08.

That’s right:  eight cents.

Unfortunately, Bell, Rogers, Videotron and other media conglomerates in Canada see fit to charge anywhere from 50 to 150 times that amount (and more) for Internet users.

For the average user, this would amount to an Internet bill of roughly $2.00 per month, based on about 25 GB in monthly usage.  It’s easy to see that Internet bills should be substantially less than they currently are.

Over the past few weeks, I’ve been developing some stories related to the Usage-Based Billing situation created by Canada’s mainstream Internet Service Providers (ISPs) and the central concern is that we’re getting ripped off and it’s having a crushing effect on innovators, small businesses and other organizations that rely on the Internet to entertain themselves, educate themselves or to make money.

In Part I of DIY Digital, I laid out the framework for understanding why Usage-Based Billing (UBB) is so important to companies like Bell and Rogers.  Ultimately, they need to supplement the revenue that they’re losing to the Internet.  Making enormous profits off this migration from traditional to digital media doesn’t hurt.

In Part II of DIY Digital, I reviewed the assets of Canada’s largest media conglomerate – Bell Canada or BCE Inc. – and suggested the theme of ‘Sell Bell’ to get people motivated to cut Bell and its subsidiaries out of our lives.

Of course, I’m not going to take ANY credit for what happened next, but Bell relented and recently withdrew its application for UBB and instead announced that it would pursue Aggregated Volume Pricing (AVP), which is pretty much the same but with a different name to it.

In the coming weeks, I intend to continue to review the progress made in the UBB / AVP debate, but I’m going to focus on how big and small businesses, not-for-profits and other organizations can push themselves away from the traditional environment controlled by Bell.

My focus will be on self-serve technologies that put the marketing functions into your hands instead of those of an agency or large media companies that don’t seem to care about the prosperity of Canada’s Internet.

If you have a specific topics that you’d like me to discuss, please post them in the comments below.  It would be a great pleasure to address how we can help you get found online.

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