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It makes sense: you pay for what you eat. But if a restaurant offers an all-you-can-eat buffet, then decides you’re eating too much and should be charged more, it doesn’t go over too well. It seems something similar is afoot with Internet providers: the promise of the all-you-can-eat buffet is cutting a bit too deeply into their bottom-lines, and now they think you should pay more.
The problem is one of expectations. Internet providers set up unlimited access as a method to attract people onto the Internet. And it worked. The Internet not only became populated, it began to offer a wealth of services that changed the nature of the retail marketplace, and is on the verge of doing the same for the media industry. Unfortunately, as the opportunities to be online expand, so to did our appetite for bandwidth. Meeting those demands has become something of a problem for Internet providers.
Because the federal government won’t allow Internet providers to differentiate traffic that moves over its hardware: porn and The New York Times must be treated with equal deference, Internet providers must find other ways of limiting the use they encouraged. "A flat-rate, infinitely expandable service is unachievable," Dick Lynch, chief technology officer of Verizon Communications Inc. (So to is a flat-rate, infinitely expandable brick of cheese.)
Earlier this year some Internet providers put monthly caps on usage. Comcast, for example, said no more than 250 Gbs a month. Comcast says this only impacts a small number of high-usage customers. AT&T, in Beaumont, Texas and Reno, Nevada, is offering tiered-pricing structures, with penalties for going over your monthly allotment.
More radical are plans by some, AT&T and Time Warner Cable, Inc. for instance, involve a return to usage-base pricing: you pay for what you eat. The problem with this approach is customers don’t like it. They really, really don’t like it. So much so that Time Warner was forced to shut down a pilot metered Internet program last year. Further, online businesses won't be thrilled. It could put a serious crimp into online browsing, leading to a downturn in Internet business. And Netflix probably won’t be too keen on the idea, with all it has invested in streaming video.
No resolutions as yet, but it seems certain that something is bound to happen. Maybe not metered usage, but something that involves taking more money out of our wallets is a given.
Image Credit: Stujoe/flickr
Comments are closed on this article
I Jedi
October 21, 2009 at 7:42pm
Let's not forget that competition will ultimately always lead to a better deal for the end-consumer. Right now, as it is, the ISPs in America have a strong hole of monopolies in their own areas. Many people in the United States don't have the luxury to choose between more than one ISP. It's an unfortunate thing, yes, but in the coming years those monopolies will continue to shrink as ISPs continue to move into other ISPs area. We will eventually start to see prices lowered and bandwidth caps (if they are widely adopted by this time.) increase ever more to include 250GB as minimum to estimates as high as a whole terabyte...
ISPs spend a lot of money on their infrastructures, but not NEARLY as much as they make in profits and pocket it. Net Neutrality is an issue that will greatly affect the Net here in America. In my opinion, it is very important that the Net stay open to competition, so innovation and market can continue to grow. I would never support a pay-as-you-go plan, nor would I support an ISP's action to place a low bandwidth cap of 40 gigabytes a month. (See: Road Runner)
The best thing we can do now to show ISPs we mean business is to simply switch to a different ISP with a better plan, if possible, AND to continue to support the FCC and other organizations, like FreePress for Net Neutrality.
1337Goose
October 21, 2009 at 6:56pm
I live in Canada. I have a 95Gb cap, which is one of the higher tier caps. If you live in the States, fight the Internet caps with all you've got, they're never fair.
~Goose
Biceps
October 21, 2009 at 4:55pm
I have no problem with a REASONABLE cap of something like 250 GB. I would have to download almost 10 GBs a day to hit that... I don't even know if I could watch that much video in a week, much less a day. I do, however, take issue with the idea of metered broadband, low caps like AT&Ts and the idea of metered broadband. I would change ISPs every month if needed to stay away from those kinds of pricing schemes.
This whole push by ISPs is not because they are afraid of losing money... they just want to make sure they can continue posting INCREASED profits each year. It is time for our government to do something about this... the FCC is/was on the right track with net neutrality. It is up to the FCC to keep the ISPs from neutering the net, it looks like.
Anyway, if you look at any other country in the world, you can see that American ISP executives are lying through their teeth. Greed is the motivating factor here, plain and simple.
rook
October 21, 2009 at 4:28pm
As far as I know, European ISPs have little problems with flat-rate plans. They even have better speeds and prices. How can American ISPs be so sucky and greedy?
UndeniablyPC
October 22, 2009 at 4:51am
For starters, countries in Europe are a lot smaller in comparison to the United States. And I really hate that when people seem to forget this when talking about infrastructure, because that is a large part of infrastructure. Also, Europe has a lot more competition in the ISP department whereas in the U.S. the conglomerates like Comcast, AT&T, and Verizon all own the assests and backbones in the U.S., so they are in control of what goes on behind the scenes when it comes to who can and cannot connect to their infrastructure. See, like what happened to AT&T in the 1980's where they were cut off from providing local POTS, they sat back and built up their infrastructure across the U.S. So when in the late 1990's they got that ability to provide local access back, we are again stuck with not so many choices, because these larger ISP's have monopolized the market because there is no competition. So suffice to say we are reaching a crossroads again, because these huge ISP's are unwilling to give up profit margins to small businesses who need their infrastructure to provide service.
destruya
October 21, 2009 at 10:04pm
American ISPs can be a lot suckier and greedier because of lobbying and the fact that if an ISP wants to screw over Europeans, they have to get it past the entire EU. Here, all you have to do is give key politicians money to vote your way on something they don't even understand (i.e. "the internet is not a truck, it's a series of tubes."
They *are* going to do this.
nekollx
October 21, 2009 at 4:24pm
ATTICA! ATTICA! ATTICA!
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