Are consumers getting a raw deal from their ISPs?—Posted on May 22, 2008

Lets face it, everyone likes getting a good deal and when it comes to internet services, there appears to be no shortage of ‘good deals’ on the market – at least on the surface. However, the way we are using broadband is changing as more and more people organise their work, home, life and leisure around online services.

The fact is, if you provide a service, people will want to use it. In the case of broadband they want to use it for data-rich video and audio applications – and why shouldn’t they! Some consumer ISPs, however, are throwing their toys out the pram as this does not fit with their “stack ‘em high, sell ‘em cheap” business model. They want to put as many customers as they can onto a network so they can sell their products cheap and undercut the opposition. This is all well and good as long as their users only want to check a bit of email or do a spot of online shopping; heaven forbid that consumers may actually want to use the Internet for something more, something that may actually require low contention and a bit of bandwidth.

So, this goes back to the age old saying - you get what you pay for. If you opt for a cheap Internet service then you need to be aware that you will be sharing your bandwidth with lots of other users. If you have a broadband connection of up to 8Mbps, then if you’re close to an exchange, theoretically that’s the download speed you’ll get. However, if all your neighbours are online at the same time playing World of Warcraft or downloading large video files then you’ll be lucky if you get 1Mbps, let alone eight!

Let’s face facts – it is the consumer ISPs’ business models that are fundamentally flawed. With strong competition between consumer ISPs all wanting to provide the cheapest broadband, the service customer’s get is going to be severely compromised. While you’re getting that cheap deal, you’ll be suffering from high contention, usually with a very restrictive fair usage policy slapped on for good measure – all working to limit the amount of content that you can download.

It is time for consumer ISPs to wake up to the reality of the modern Internet. Consumers need to be offered packages based on how they want to use it - if someone only requires basic surfing with a small amount of download capability, then offer them a basic package. If customers want to download or stream from iPlayer or similar high bandwidth services, then a different type of package is required.

Consumer ISPs need to stop focussing on offering the lowest prices to secure the most customers and need to adopt more of business ISP model, providing a scalable range of products and services that meet the needs of the customer depending on the usage that’s required. By making it clear to customers exactly what they will be receiving for their hard earned cash, ISPs can sell products that actually meet the customers needs. That’s not just a business model approach – it makes good business sense.