The concept of consumption based billing

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Many new ways and payment systems seem quite complicated for some people. A vast number of consumers tend to panic whenever something changes, regardless if it’s for better or worse. Consumption based billing method is useful for a few reasons. If you’re interested in switching to this system, go ahead and read the article, you might find something helpful. Being informed and updated can’t harm you.

The explanation

The good thing about this billing method is that it’s very simple and straightforward. You only pay for the amount of data spent. It is the same thing used in water and electricity bills. However, in this model, a provider may charge a pre-determined rate on a monthly or yearly basis depending on your usage level. In simpler words, a consumer who’s only checking their email once a day won’t pay as much as a client streaming HD content daily.

CABLE-TV
Photo Credit: Huffington Post

Is it good or bad?

It all depends on several factors. The first thing is that it doesn’t hit everybody equally. Many people use massive amounts of data on a regular basis, which could cost a lot more than their current subscription. Also, if you hit a certain point of consumption, you move to a next level which is slightly more expensive. As you can see, heavy consumers have no benefits at all. However, consumers who don’t spend much data have the opportunity to take advantage of it.

The speeds have doubled in the past couple of years, the prices of the service dropped, and it’s almost inevitable to happen. The big question is – are the consumers going to welcome it or not. Luckily, there were some studies and researches conducted by many cable providers and companies, both to test the market and try out the model. However, it didn’t go so well.

Photo Credit: http://www.digitaltrends.com/computing/internet-connection-speeds-rising-globally/

The public’s opinion

Paying extra for higher speeds and measuring your data consumption isn’t very well accepted among the clients. It’s because of the price difference and the fact that you cannot predict how much data you’ll spend. Also, it would have an enormous impact on the industry, considering that a large part of the Internet consists of video material, which requires high speeds and a stable connection. For example, the amount of monthly YouTube visits would drop significantly. The consequences include job loss and an unpredictable impact on the economy.  The worst thing is that it slows down the evolution of the Internet because people don’t have enough resources to research and ultimately improve and help the industry.

Is it coming in the future?

It is hard to predict such occurrences. However, keeping in mind the bad reception with the people, it’s going to take some time. The more people start using broadband networks, the higher the cost for ISPs. So, it’s possible to happen; it depends on the overall agreement of the public, consumers, and individuals who run provider companies.