Report Spotlights Broadband "Power Users" and Usage-Based Billing

The OpenVault Broadband Insights (OVBI) report for the fourth quarter of 2020 estimates broadband consumption growth amidst the pandemic and lockdowns. It also offers updated comparisons of data consumption habits of subscribers to flat-rate billing (FRB) and usage-based billing (UBB) plans.

According to the OVBI report, "[t]he monthly weighted average data (both FRB and UBB) consumed by subscribers in 4Q20 was 482.6 GB, up 40% from 2019." OVBI calls this an "explosion in data consumption." Moreover, 53.6% of all subscribers now regularly consume more than 250 GB of data every month. And OVBI's "power user" category showed continued acceleration, as more than 14% of weighted average subscribers now consume in excess of 1 TB of data each month – a 94% increase from just 2019. Meanwhile, "extreme power users" – who consume over 2 TB per month – grew 184% compared to the last quarter of 2019 and 120% compared to the third quarter of 2020. As of the last quarter of 2020, extreme power users constituted 2.2% of all subscribers. 

These stunning increases in monthly subscriber data consumption are enabled by faster broadband Internet connections. According to the report: "For the first time, over half (50.6%) of subscribers are now provisioned for the 100 – 200 Mbps speed tier." Also, overall subscribers provisioned for gigabit broadband speeds climbed to 8.5% in the last quarter of 2020 – up more than 300% compared to a year before and up nearly 51% compared to the third quarter of 2020.

 

Additionally, the report estimates that broadband Internet service providers offering unlimited FRB packages have about 30% more extreme power users than providers offering UBB packages.  According to the report, "[m]oving to a UBB approach has proven to curtail extreme power users and the network management challenge they create." Given that the average monthly broadband data consumption per-subscriber is about 483 GB and far below average monthly consumption of power users and extreme power users, UBB offers a way for broadband Internet service providers to address network congestion and also to charge less to subscribers who use less while charging more to subscribers who use much more.  

As I noted in a December 2020 blog post, it is important that the FCC continues to uphold the entrepreneurial freedom of broadband Internet providers to offer billing plans that match the differing demands of both lower-volume and higher-volume users.