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Sonic.net CEO: Tiered Pricing ‘Doesn’t Make Sense’ | Multichannel

In the view of Sonic.net CEO Dane Jasper, ISPs that charge based on speed tiers and data usage are employing policies that some consumers might view as fair, but are likewise artificially contrived by those service providers.

Installing tiered broadband services is “just configuration. That’s cost-less,” Jasper said in a recent interview, noting that his true costs are in elements such as the loop, the building out fiber, the consumer premises equipment, providing customer care, and the sales and marketing of the product.will

But he acknowledges that many consumers believe that tiered pricing is a fair proposition, because they are used to a pay-more-to-get-more model. For example, they’re typically willing to shell out more for a porterhouse steak than for a petite filet.

“The difference is that in the steak [example], there’s more cow. It’s not artificial. There’s a higher materials cost,” Jasper said. “But when it comes to broadband performance and speed, the limits are artificial. They sound fair, but they’re entirely contrived. There isn’t a cost around speed. We believe that tiered pricing doesn’t make sense.”

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Sonic.net CEO: Tiered Pricing ‘Doesn’t Make Sense’.

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