Pay-as-you-go Internet

A couple of months ago I was in a hotel in Stavropol’, Russia and experienced “Pay-as-you-go Internet.” To those carriers who are rabid to introduce this to America (AT&T, Verizon, Time Warner Cable…you know the crowd), I say, “I think you have identified a tremendous opportunity–in Russia.”

There I was just happy to have broadband Internet at almost any price. The fact that I had to go to the hotel desk every few hours with my roubles in hand was but a minor inconvenience.

Here it will be a different story. Now I understand why the big guys want to do this. With the imminent arrival of IP-video, the cable industry’s only hope of preserving its revenue stream will be to choke the streaming of video, keeping this from demolishing their carefully architected video pricing tiers. And if voice traffic is allowed to flow unimpeded over the Internet, traditional phone companies will be in for a depressing series of earnings calls as well.

And of course, I’m conflicted. If they do this, Avid Communications will benefit. Everyone would switch to us because we wouldn’t charge this way. It doesn’t match the underlying costs of providing the service, and the rates they are charging (from $0.40 to $1 per gigabyte of data in a current AT&T plan), are somewhere between 10 times and 50 times too expensive. We could slash our marketing budget to zero and still be overwhelmed with business.

…so the more I think about it, I say to AT&T, Verizon and Time Warner, “Go for it, comrades!”