Usage Based Billing, the big ISPs push for Wireless like profits.

I've had several discussions recently about wireless carrier pricing. The more I thought about mobile pricing strategy, the more I realizes what UBB was really about.
Rogers and Bell are both making huge amounts of money off of their wireless cell phone businesses. In fact, Canadian wireless carriers have some of the highest profits in the world. Why is this? Partially because of lack of competition. Yes, there are three national carriers, Rogers, Bell and Telus. But Bell and Telus are joined at the hip (they share their network), leaving just Bellus against Rogers. Things are changing with the new entrants, but the core of their success is based on the business model that is prevalent in a lot of North American carriers.

Scarred into paying more

All the major North American carriers have a pricing model which is designed to discourage pay for what you use pricing. They all have packages with allotments of minutes and/or bytes of usage. If you go over what your package contains, you are charged obscene amounts in overage charges. These charges are designed to force you into a package which you may not ever come close to using, but will gladly have so you don't get that wonderful two, three or more times your regular bill overage charge. A lot of Americans overpay for cell phone usage as a result.

Changing the rules for Internet Access

So these large carriers in Canada are making money hand over fist in the wireless space. Now they want to bring those profits into their Internet business. So what better way than to put up a smoke screen claiming that bandwidth is getting more precious, just as it's getting cheaper elsewhere in the world? What's worse, is that wireless and land line infrastructure are very different. Wireless frequency allocation is actually a controlled, some might argue artificially scarce resource. Not so with land lines. The only thing scarce about them is that there are a handful of companies that own the last mile infrastructure, and they feel it's their's to overly restrict.

Bell's UBB pricing policy, which was being forced onto independent ISPs who lease the last mile access, had ridiculously low usage allotment, with the option to buy "usage insurance". If you think you are going to go over, buy these packages of extra usage and we won't charge you our crazy high overage rates. So instead of actually being billed for your usage, where if you used less, you'd save money and if you used more, it would cost you more, based on a reasonable markup, we have a situation that mirrors the wireless industry. High overage fees with higher usage packs. Soon we'll all be overpaying for our Internet access. Of course, it's actually worse for a lot of users, as no packs were offered to cover what some people used.