Washington

Roberts On Usage-Based Pricing: This is Only a Test

Points to exploding bit consumption as reason for experimenting with business model 5/28/2014 02:19:00 PM Eastern

Comcast chairman and CEO Brian Roberts said the company is testing usage-based pricing in only two or three markets, but did suggest it was a way for web users to share the costs of surfing an exponentially growing tidal wave of bits.

In an interview with CNBC from the Code Conference in Rancho Palos Verdes, Calif., Roberts continued Comcast's effort to tamp down the usage-based pricing kerfuffle that followed comments by executive VP David Cohen at an investor conference two weeks ago. Cohen said later he had been misinterpreted.

Roberts was asked whether usage-based pricing would frustrate Netflix users who "don't want to pay more." He said Comcast did not want to frustrate customers and pointed out that Comcast had gotten rid of usage caps.

Roberts emphasized that Comcast had only "experimented" with usage-based pricing in two or three markets. He said that was part of an ongoing search to find ways to "share the cost of this network."

He said that network was "exploding," with a 30% to 40% yearly increase in the number of bits being consumed, compounded, over the last 20 years and maybe the next 20. "He called that an "exciting, high-class opportunity." But there are clearly "opportunity" costs. He said Comcast would "continue experimenting," but had nothing new to add on where those tests might lead, and when.

It has been over two years since Comcast announced it was phasing out its 250-Gigabyte monthly broadband-limit, saying it was moving, over time, to a usage-based pricing model. Apparently, that time has still yet to come, except in those handful of test markets.

The change from caps came after Comcast was criticized for allowing unlimited usage of its IP video-on-demand service on Xbox 360, while applying the limits to other Internet-video services.

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