Telstra calls for bandwidth congestion pricing

Telstra has called for congestion pricing for both fixed and mobile broadband services.

Such a move would mean charging more for bandwidth at high demand times of day, a system which would be somewhat analogous to toll-road pricing during peak-hour.

Speaking at the Communications Day forum in Sydney today, Telstra’s group marketing director for innovation, products and marketing, Kate McKenzie, said the telco giant is already trialling different methods of congestion pricing with select groups of customers. 

McKenzie emphasised the need for complete transparency around congestion pricing as a means of not disenfranchising customers. 

To this end, McKenzie called for industry co-operation as a means of avoiding telecommunications regulation. “We need to explore issues of customer transparency and agree on the principles used to provide that level of [pricing] transparency,” she said.

She also raised potential meaures such as traffic revenue sharing with application developers, such as video streaming sites. Application providers could also provide services such as offering toll-free access for higher quality of service, or some other type of subsidy to customers.

Interestingly, McKenzie noted the top one percent of users are responsible for the vast majority of traffic on the network, particularly at peak periods. “Some of these users can get through in excess of 130 gigabytes per day,” she observed.

The way to manage these users, and to provide fairness and the capacity for ongoing investment in the network, is to offer clear pricing signals to customers.

“We need to give an indication of service quality, and give consumers the ability to control their experience by altering the plan they are on,” McKenzie said.

Tweaking price settings, she said, was preferable to bandwidth rationing, which deprived customers of the ability to decide what levels of service they want to have, and when.