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Why is Cisco speaking like a tobacco company?

Cisco appears to be taking a page from the tobacco industry with its blog statement today: "The aim is to transform users' addiction to broadband into willingness to pay."

Mon, 7/30/12 - 9:59pm    View comments

Cisco Believes Broadband Access Can Be Priced Like Premium Bottled Water

Cisco Believes Broadband Access Can Be Priced Like Premium Bottled Water

Chris OsikaRoland KlemannIn a blog story today:

If Bottled Water Prices Can Be Differentiated, So Can Broadband Access

Cisco Internet Business Solutions Group (IBSG) executives, Chris Osika and Roland Klemann, appear to take a page from the tobacco industry:

"One only has to look at the price of water to see that it is possible to implement strongly differentiated prices for a commodity product.

"The aim is to transform users' addiction to broadband into willingness to pay.

"Building premium value-based pricing plans will require:

  • "Technical characteristics - Important technical characteristics may include ultra-fast Internet access, turbo buttons, and guaranteed quality of service in terms of bandwidth and latency.
  • "Differentiated pricing - Differentiated pricing strategies may include time-of-day pricing, dynamic or spot pricing, broadband access bundles shared by multiple devices and/or people ('family plans'), or embedded connectivity."
View Cisco's How Service Providers Can Monetize Internet Traffic Growth via Value-Based Pricing.

Well, here are my 4 problems with Cisco's strategy:

  1. I prefer to only drink tap water provided by my local government, so I've never had a need to consume premium bottled water!
  2. I'm totally addicted to broadband, however, there are only 2 broadband providers offering broadband access to my favorite office, Verizon and Cablevision.

    Plus in reality, I actually have only one broadband provider and that's Cablevision. Why? Because Verizon has proven to me that they are totally incompetent (view local, state and federal cable franchise regulation).

    View FCC fines Verizon $1.25M for blocking tethering apps

  3. Since in reality, there actually is no broadband access competition today, broadband providers have now become "Natural Monopolies," and as such, transforming users' addiction to broadband into willingness to pay, is an abuse in my personal opinion.
  4. To see where Cisco's strategy for broadband access is heading (at least in my opinion), recommend that you review, Nicotine Addiction to Disease: Growing Up With the Tobacco Industry.


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