Why Metered Broadband Slows Internet Innovation

from the how-to-slow-internet-innovation dept

It's been a while since there's been much debate over the issue of metered vs. flat-rate internet access plans, but it's flaring up for a variety of reasons these days. First, Adam Thierer posted a long essay over at the Technology Liberation Front arguing that piggybacking on WiFi has real costs and that metered broadband would solve many of the problems by convincing access point owners to secure their broadband. This seemed like an odd argument -- adding a significant cost as a method of signaling that there was, in a few very specific circumstances, a tiny little marginal cost associated with some WiFi piggybacking. The second thing thing that's given new life to the metered broadband argument is the sudden reappearance of stories about Comcast's unpublished usage caps. This is an old, old story that's been talked about for many years, but pops up every now and again. Basically, Comcast (and some other ISPs) will cut off certain customers who are using too much bandwidth. The real problem, honestly, isn't that Comcast is cutting off these users, but that they're not at all transparent about it. The services are promoted as "unlimited" and then the usage caps are kept a secret... until you've been kicked off.

Anyway, with the latest barrage of stories about these usage caps, it's common for those supporting ISPs to blame the concept of flat-rate pricing, because it only opens up an opportunity for people to abuse the system. That, inevitably, leads to a discussion about bringing back metered broadband offerings (which are found around the world, but rarely in the US). This is a bad idea for a variety of reasons. First of all, most of these problems would go away if the ISPs in question were more open about their caps. However, much more importantly, if you want to encourage innovation online, it's important to leave flat-rate pricing in place. The second you set up metered broadband, it adds significant transaction costs for both the ISPs and anyone trying to do anything or try anything online. For ISPs, they now have to put in place significantly more tracking equipment and then need to manage the various different levels of service, differential billing and more customer service costs in dealing with customer confusion (or anger if a bill seems too high).

However, the bigger problem is the transaction costs it introduces for users. Suddenly, internet surfers really need to see any particular website or service as being worthwhile. Just the act of making them debate whether or not it's worthwhile to pay up to do something represents a mental transaction cost that will slow down adoption of new services. Furthermore, as bandwidth has increased, many of the newer innovative services have come about to make use of that bandwidth -- which only drives further investment in more bandwidth, driving more innovative uses. It's a virtuous circle. Yet, by metering broadband connections, slowing down adoption of these new services, you slow down the innovation and hold people back from trying out or even creating new, innovative and useful services that would require more bandwidth. It's a recipe for slowing innovation online.

While an executive for the CTIA says that flat-rate pricing only made sense when the internet was first getting off the ground, that represents a false belief that innovation on the internet has slowed down and the internet is now somehow "mature." Instead, internet innovation has been increasing as new apps and services are built on top of older apps and services, leading to greater and greater innovation. If the CTIA exec gets his way and convinces providers to move more to metered bandwidth, then his belief that the internet has plateaued may become a self-fulfilling prophecy, as it'll undoubtedly slow the pace of innovation online. Imagine, for example, that metered bandwidth was common when YouTube first hit the scene? It would absolutely have slowed adoption, because video uses quite a bit of bandwidth and people would have been a lot less likely to test it out. In fact, the same could be said for any kind of non-text multimedia. Podcasts? Why waste that bandwidth? Streaming radio? iTunes would also be more expensive, as every download doesn't just cost $0.99, but your metered bandwidth charge. If you look at history of innovative services, you'll see they tend to move more and more towards flat rate offerings, as it encourages usage and encourages innovation. Phone service and mobile phone service have both trended in exactly this direction -- and in both cases it's because it's opened up a much larger overall market, even if it means less per customer. So, why are we suddenly trying to go the other way with broadband?


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    RandomThoughts, Sep 13th, 2007 @ 9:47am

    I would be a dollar that if ISP's put a meter on all their customers instead of charging a flat rate, their overall billing would actually go down.

     

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    Larry Miller, Sep 13th, 2007 @ 10:03am

    metered access

    My ISP has been doing this for some time. You get a certain amount of data transfer included in the particular service you buy. If you go over that amount it is $10 per 10 gigabytes. They provide a web site so you can track your data transfer. If you regularly go over, you can purchase additional blocks. There is no sudden disconnection problem - you pay for what you use. The maximum transfer for a given rate of service is set at a reasonable level so that only a very small percentage pay for additional data transfer. Since this is exactly parallel to the way the ISPs are charged it makes a lot of sense to me. They don't care what kind of traffic you are sending and receiving, so P2P and such goes away as an issue. They don't have to do traffic shaping and if they need more capacity, they are paid for it.

    So the majority of customers get a flat rate and the ones that need high amounts of data transfer are not a problem.

    It does not cost the ISP significantly more to do this - the routers provide the raw data. I track my usage on my system with one line of PERL code.

     

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      W.B. McNamara, Sep 14th, 2007 @ 6:13am

      Re: metered access

      Hey, if you're following comments, Larry, what ISP (and where) do you have? I've been interested in this model for a while, but haven't come across and ISP that uses it.

       

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    Larry Miller, Sep 13th, 2007 @ 10:06am

    and by the way

    And, I might add I am getting 20MB down and 1MB up on cable - and these are real speeds, not "up to" speeds.

     

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      matt, Sep 13th, 2007 @ 11:49am

      way off on metered broadband

      one of the mistakes here should be plainly obvious. The metered amounts work for YOU, not for everyone.

      If they say "we give you fast internet, but you can only use it for 20GB a month" well, good luck with that. As the internet grows, and speed increases, that 20GB is going to seem paltry. Sure, 5 years ago 5GB in a month would be unimaginable but if files get bigger (even office files and such do get bigger, don't think modifications to programs always decrease the size - even optimization can increase filesize), then your bandwith needs are going to get bigger.

      Instead, setting a metered cap is like saying "Well, you might use the internet more and more each year, but we'll pin you to a set value"

      I spit on that concept. That concept is a spit in the face of everyone ho uses the internet.

       

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        Anonymous Coward, Sep 13th, 2007 @ 10:00pm

        Re: way off on metered broadband

        I spit on that concept. That concept is a spit in the face of everyone ho uses the internet.
        You seem to be confused. They're not talking about metered caps but ratehr metered service. Big difference.

         

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    aracne, Sep 13th, 2007 @ 10:09am

    And I know from experience that they don't even know how much bandwith someone consumes. When cable was starting in Spain, we looked into the offer, calculated that the "free" download cap each month covered like four newspaper's frontpages each day, calculated how much it was with some gross estimation of our traffic (on a modem, mind you) and threw it into the trash.

     

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    Anonymous Coward, Sep 13th, 2007 @ 10:39am

    RIAA & MPAA read this!!

    It works greatly to the benefit of RIAA & MPAA if it was metered. Now downloading obscene amount of warez, mp3z & videoz have suddenly a cost.

    As to the web apps not taking off or stifling innovation on the net, it only applies to those applications leveraging video and audio.

    Flip side of the innovation argument is that it would remove a helluva lot of crud from the web!!

     

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    Petréa Mitchell, Sep 13th, 2007 @ 10:51am

    Hang on a minute

    Your underlying premise is that innovation necessarily eats bandwidth. Could you please support that? Why wouldn't metered bandwidth spur new innovation in compression technologies? Why wouldn't a changing marketplace where sites suddenly have to strongly justify the time spent on them result in new ways to reach out to audiences? Can you provide any evidence to show that metered bandwidth has made the countries where it's common less innovative?

    Also, the conservation argument: Imagine what it would be like if everyone had, say, unmetered water or electricity. (Yes, it's not a perfect parallel, but you know what I'm trying to get at here.)

     

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      matt, Sep 13th, 2007 @ 11:58am

      sure, example present!

      Hey, here's an example: Doctors in japan are now able to examine xrays at high enough resolution via internet, due to higher bandwith, that they are comfortable in making medical evaluations, cutting down on travel needed and obvious innovation to do so (we're talking 25+Megapixel shots, whjich would be an easily 500MB + file).

      Is that innovation? yes. Article link? here:
      http://www.washingtonpost.com/wp-dyn/content/article/2007/08/28/AR2007082801990_pf.html

      Is this something we could have done with less bandwidth? Absolutely not. Try that on a 56K modem and it'll take you quite some time. Try that on 800baud and it'll take you months.

      Also yes, do you think HDTV over the internet (which is an innovation, albeit a small one) is not only groundbreaking indicative of high resolution possibilities on the internet, but also eats bandwidth?

      Yeah, so logic > stupidity, although we know which has it's limit.

       

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        Chris, Sep 13th, 2007 @ 12:28pm

        Re: sure, example present!

        You're comparing a commercial entity using it for commercial reasons versus a someone in their home. Who the hell owns a 25 Megapixel digital camera in their home? It's not very common, I can assure you.

        I find it amazing that most are willing to pay for the electricity they use, the water they use and the gas they use, which are metered, yet don't want to pay for the bandwidth they use, which costs money to provide in addition to the costs of providing you access to the Internet?

         

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          Buzz, Sep 13th, 2007 @ 12:37pm

          Re: Re: sure, example present!

          Electricity cost is negligible unless you are eating up a huge amount of power (such as heating all night). Water, gas, and electricity are all tangible resources. Internet is an intangible resource; it is data flowing over a wire. A spike in data does not cause the wire to bulge and burst. It simply slows the system down until the transfer is complete. Increases in bandwidth use is NOT proportional to the increase in cost.

          If metered broadband became the standard once again, I would demand compensation for the broadband eaten up by Windows updates, software patches, virus protection, etc. (I use Ubuntu, but my wife is still a Windows user.) So many services today depend on a freely usable Internet connection. Going back to metered usage would destroy everything.

           

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    Joel Coehoorn, Sep 13th, 2007 @ 11:04am

    IIRC, the 'cap' was finally discovered. It turned out to be the top 1% of customers each month. They don't publish a number because at the beginning of the month they don't know the number.

    Of course, this is still insane. You could simply publish the 1% figure and provide a way to see your percentile over the course of the month, or least warn people before the end of the month they are in danger. And that's assuming the 1% cutoff is a good idea at all, which is asking a lot. I understand the idea to have some kind of downward pressure on users to help keeps costs down, but their policy as it stands will only piss people off.

     

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      Do the math, Sep 13th, 2007 @ 10:17pm

      Eventually

      IIRC, the 'cap' was finally discovered. It turned out to be the top 1% of customers each month.
      It's a game of attrition. If they keep it up month after month, after some time they'll have eliminated the top 50% of users. All the while advertising "unlimited" service.

      I have a friend who is a manager for a large US corporation. Every three months he is required to fire the lowest performing 10% of his subordinates on each team based on competitive evaluations. After a few rounds he has found himself in the position of firing very some competent people just to meet corporate churn goals. Sadly, he knows that someday his boss will probably have to do the same to him as well. That's how these games of attrition go.

       

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    doug m, Sep 13th, 2007 @ 11:16am

    pay for premium

    it looks like everything is going to turn toward a pay for premium kind of service sooner or later, allowing people that want more, to pay more and the average person is either going to have to deal with it, or they are going to have to band together and come up with a way to fight it.

     

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    Overcast, Sep 13th, 2007 @ 11:19am

    Only if I get to charge them when I get a lot of latency, slow downs and problems with connecting - and I'm able to charge them for any spam they let through into my Inbox, since it's using bandwidth.

    Of course, it wouldn't bode well for advertisers, with charges on bandwidth, I surely won't click on an ad and I'll be very sure to install the toughest pop-up blocker I can find, to help reduce garbage using up bandwidth.

    Oh but wait - my ISP doesn't suck that bad. That's why I continue to use them!!

    Sure - go ahead and charge for use - that's what made compuserve so very popular and AOL so un-popular, right?

    Such short memory some people have.

     

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    Chronno S. Trigger, Sep 13th, 2007 @ 11:37am

    OK, this is going to be a fun one

    First, the Technology Liberation Front needs to change their name. Their not liberating anything their trying to lock it down.

    Second, I have 20-24M down and 1.5M up on my comcast and I use it. Between Youtube, Xbox Live, and however many hundreds of other legal things I use, I'm probably downloading a few dozen Gig a month and never got cut off. And that's just the stuff I can count. God only knows how much information is crossing for an online game.

    Third, If they started metered usage, most companies will pretend that it saves money where in reality they made sure that the average usage will pay as much if not more than what the current prices are.

    Forth, aren't Google and Microsoft coming out with completely online office suits? I can imagine that will take up a lot of bandwidth.

    Fifth, Metered Internet was around when the Internet was new. Any one remember dialing in to download your E-Mail, disconnecting, writing the replies, and then reconnecting to send them? Unlimited is just simply the next step. look at home phones and now cell phones.

    Sixth, I would bet that the **AA would want a cut of the bill to cover possible illegal downloading. Remember the media tax?

    Damn, I could go on forever, and I probably will depending on future comments.

     

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      Chronno S. Trigger, Sep 13th, 2007 @ 3:02pm

      Re: OK, this is going to be a fun one

      I think I just thout of something to add that no one seems to see.

      When I start downloading something from say Microsoft, Say SP2 for Windows XP, Comcast is just providing the connection. Their servers are doing nothing. The only way they are doing anything is if they're monitoring what I'm doing or how much I'm using. Once that connection to Microsoft's download servers is made, that's it. Microsoft is paying for the servers, I'm paying for the PC, we are the only ones that will see any increased degradation of hardware. Any one who has advanced knowledge of networking would know that. I'd assume comcast douse.

      So would someone please explain to me why this is even debated, and why downloading something is costing comcast money. If you use more water, the water company has to work harder to produce more clean water. You use more electricity, the electric company has to work harder to produce the electricity. You download more information... There is no added work that needs to be done, at least on the ISP side.

       

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        Petréa Mitchell, Sep 13th, 2007 @ 3:15pm

        Re: Re: OK, this is going to be a fun one

        "When I start downloading something from say Microsoft, Say SP2 for Windows XP, Comcast is just providing the connection. Their servers are doing nothing. ... So would someone please explain to me why this is even debated, and why downloading something is costing comcast money."

        So, if Comcast just switched off all their equipment right then and there, you'd be able to download your SP2 fine, 'cause all that stuff is doing nothing, right?

        "You download more information... There is no added work that needs to be done, at least on the ISP side."

        More packets have to be switched, more electrons or photons have to be sent to you, more CPU usage, more cooling needed. Basically, data movement costs energy, and energy is darned expensive these days.

        And higher and higher network usage degrades everyone's experience unless your ISP keeps adding or upgrading equipment.

         

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          Chronno S. Trigger, Sep 13th, 2007 @ 3:53pm

          Re: Re: Re: OK, this is going to be a fun one

          "So, if Comcast just switched off all their equipment right then and there, you'd be able to download your SP2 fine, 'cause all that stuff is doing nothing, right?"

          Not saying that, I'm saying that if they shut down all their equipment except the gateway I'm using it will still work. The Internet is based off of IP address, not names. Every time you type in www.techdirt.com your computer goes out to your ISP's DNS servers and asks for an IP address. once that IP address is obtained, it is stored on your computer for future use. all transactions to www.techdirt.com no longer pass threw the DNS servers. you are only using the nodes between the servers. Comcast only owns one or two. Working with networks for years, running a hub at 1% of its capability or 100% is only a negligible difference.

          "More packets have to be switched, more electrons or photons have to be sent to you, more CPU usage, more cooling needed. Basically, data movement costs energy, and energy is darned expensive these days."

          First, Photons, someone has been watching too much star trek

          second, the CPU usage and electric usage is also negligible. The major difference is on the sending server that has to read the data off of the hard drive and the receiving computer that has to wright it. Both are probably not being payed for by the ISP. The cost there is also negligible.

          "And higher and higher network usage degrades everyone's experience unless your ISP keeps adding or upgrading equipment."

          Go tell that to Japan that offers their users 80M down. This would fall under the monopoly thing that techdirt has covered in so many previous articles.

          I have a small network at home. Web server, media server, security camera server, gaming PC, mobile PC. I know about CPU usage, heat usage, and power consumption. I also know that all together with my LCD TV, Gaming consoles, Regular light bulbs, I use less electricity than my air conditioner alone. Streaming media or copying (Approx 5-20M/s) or not. And in this argument that's all that matters, the difference between transferring and not.

          I got a great example. Vonage, Their servers do much more than an ISP's. They offer unlimited local and long distance for $24.95 a month. So no matter how much you talk you don't pay more. I believe that they would have taken into account the data transferring if that was such a big problem.

           

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            Petréa Mitchell, Sep 13th, 2007 @ 7:33pm

            Re: Re: Re: Re: OK, this is going to be a fun one

            "First, Photons, someone has been watching too much star trek"

            Star Trek, bah! I watch classic Doctor Who, which famously allows neutrons to have polarity.

            Seriously, fiber-optic Internet access is an option in my neighborhood. (If I want to pay Verizon a buttload more money and give up my static IP address, anyway.)

             

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    TechieZero, Sep 13th, 2007 @ 12:48pm

    Broadband is a Luxury --- Not a Necessity

    "Yet, by metering broadband connections, slowing down adoption of these new services, you slow down the innovation and hold people back from trying out or even creating new, innovative and useful services that would require more bandwidth. It's a recipe for slowing innovation online."

    How do you come to that conclusion? Clearly innovations will be made to perform services with far less waste. Amazingly people cope. For example they have figured out that they can not afford multiple connections to a physical address so the DHCP router was born just like the PBX takes care of telephony connections.

    And don't worry about billing issues. The Telcos have had that down for a long time now.

    Also Broadband is not a necessity, but a luxury. I do *not* want to pay for others luxury comrade.

    In the end we are just talking out of our a-- as the markets themselves will determine who is successfull at whatever scheme they implement. The power is still with the consumer.

     

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      Anonymous Coward, Sep 13th, 2007 @ 10:34pm

      Re: Broadband is a Luxury --- Not a Necessity

      Broadband is a Luxury --- Not a Necessity So's everything else. Life is a luxury. So what?

       

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    Miha, Sep 13th, 2007 @ 1:27pm

    Slovenia

    well here in the small Alpine country of Slovenia a national ISP just announced a price drop in FTTH prices.. 10mbit symmetric for 14EUR ($19) and 20mbit symmetric for 28EUR ($38) .. flat rate ofcourse. glad im not living in the states or australia ;)

     

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      TechieZero, Sep 13th, 2007 @ 2:09pm

      Re: Slovenia

      What do you mean by national ISP? Government subsidized? Where do you think your taxes are going to? How do you like paying for the guy who doesn't work to surf pr0n?

       

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    David Canton, Sep 13th, 2007 @ 2:16pm

    metered broadband

    I agree totally. To illustrate the point, I find that I don't use my smartphone for as many things/as much as I could/should, because I know that if I do much more than email (eg any web surfing, document downloads, or sending photos), it is probably going over my plan and going to cost big $. The only time I do get that extra use is when I can shut down the data radio, and connect with wifi.

    That's bad enough, but to have to get into that mindset for the web would be disastrous on many levels.

     

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    Petréa Mitchell, Sep 13th, 2007 @ 2:40pm

    Flat fees as overcharging

    And another thing: how do you argue that people who don't partake of these bounteous fruits of innovation should pay like they're watching streaming HD video 24/7? Is it a good thing when overall bandwidth usage, and thus the flat fee, rises so far that it starts pricing people who only do low-bandwidth but essential (to them) things out of the market entirely?

     

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    Mark, Sep 13th, 2007 @ 3:06pm

    Caps

    Here in NZ we are restricted by caps no matter what ISP you go to, this is because all broadband services here go through Telecom which currently holds a monopoly in this country. We are ranked 22nd in the OECD for broadband, is it any wonder why...

    Hopefully this situation will be alleviated after the local loop is unbundled and competition increases. This is meant to start occuring from December.

     

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    michael dean, Sep 13th, 2007 @ 3:14pm

    metered broadband

    You don't think ISP's already throttle back your so called "broadband". They would love to charge per byte, just like the cell phone companies who have thier names on so many high rise buildings. Here is an example: a small phone company offered unlimited local cellular service for 25 dollars a month and did well for themselves and thier customers. The other big phone companies quickly bought the 25$/month company out and continue to this day to line thier pockets while we pay twice that much. Thier is a fair and equitable way for both users and providers to open up bandwidth while opening up bandwidth but it absolutely does NOT include choking/metering/price per byte pey structures. Thanks for listening.

     

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    Jeebus, Sep 13th, 2007 @ 3:40pm

    Massive Confusion

    Believe it or not Chrono S Trigger, your ISP has a certain amount of total bandwidth out to the internet.

    When you are downloading from Microsoft, you are indeed using Microsoft's upstream bandwidth, but your ISP is using its own DOWNSTREAM bandwidth to deliver that content to you.

    ISP's most certainly pay for ALL bandwidth, at ALL times, regardless of usage. But because of this, they can also OVERSELL the bandwidth, which is the WHOLE reason you can get 6MB for dirt cheap.

    You call your local phone company and ask them to quote you the price for a T1 line (1.5 mbps up and down guaranteed) and then compare that to your "guaranteed" 6 mb connection from comcast. HUGE difference.

    I work for a medium sized local ISP, I watch the traffic on an OC3 line all day long....

     

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    TomS, Sep 13th, 2007 @ 6:47pm

    We had metered usage 20 years ago ...

    Yes, sure ...

    ... metered usage surely spurs innovative services!
    Just look back to 1987, when we used dial up modems.

    We called local BBSes at 2400 baud ... paying phone line charges and access subscription fees.

    Or we connected to Compuserve and paid $1.95 an hour for 2400 baud service, so we could snag text messages, GIF and binary files.

    Let's go back to the golden days of metered usage and see how innovation mushrooms and the economy explodes (or is that implodes?)

    Oh, one other measure of progress -- let's watch the balance sheets of the backbone providers and local CLECs to see if their MARGINS grow, while total data (bit) volume and usage drops. The only winner will be the large service providers, at least until network use drops because technology finds an alternate path to the data we want. The negative feedback of higher prices for increasingly more limited and useless access will kill internet usage.

    We'll go back to using FAX and snail mail, or direct dial connections to private VPN nodes. Communities will launch wifi mesh networks to provide neighborhood LAN's, local clusters of a few thousand users, joined by edge routed links.

    Google will cache data locally, using their own fiber backbone to network local nodes, bypassing AT&T, ComCast and Verizon, forming a "second internet".

    See how easy it is to argue the proposition by advocating the opposite? It leads to preposterous results.

     

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      Geeeze, Sep 13th, 2007 @ 10:39pm

      Re: We had metered usage 20 years ago ...

      Yes, sure ...
      ... metered usage surely spurs innovative services!
      Just look back to 1987, when we used dial up modems.
      We called local BBSes at 2400 baud ... paying phone line charges and access subscription fees.
      2400 baud was a limitation of the technology at one time. It's wasn't due to the billing method. Flat rate billing wouldn't have made it any faster.

      Geeeze.

       

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        TomS, Sep 15th, 2007 @ 1:02am

        Re: Re: We had metered usage 20 years ago ...

        The point was not that 2400 baud was the norm,
        but that 2400b/s*3600 s/hr cost $1.95

        Once you apply a cost metric to usage, users will either reduce use, force you to lower cost per unit or work around you.

        The point is, metered usage at THIS POINT is a step back. It's a ploy to increase price per unit and their will be a market response equal to the relative impact.

        Flat billing hides the fact that most users have low total usage and high cost per unit. Metering may be more fair, but the human perception will that they have lost more than they gained.

        Greed will kill the business, or the provider.
        Life will go on.

         

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    Reddy, Sep 14th, 2007 @ 12:17am

    I Want Metered

    Actually, I think metered service could be good. Please note that I'm not talking about "capped" service that some confuse it with. As far as spurring innovation and better service is concerned, I think that it could do that well. Look at it from an ISP's viewpoint. With flat rates, the slower the service is, the less the customer can get out of it which encourages ISP's to keep the service as slow as they can get away with. And considering the lack of broadband competition in the US, they can get away with a lot. With metered service, the faster the service is the more the customer can use. In this case, the ISP stands to make more money by offering better speeds. This is the exact opposite as with flat-rate.

    There also seems to be some assumption by many that metered service would be be more expensive than flat-rate. I see no justification for that assumption. As an example consider another common information service: the cell phone. Have you ever checked out the flat rate for unlimited cell service as compared to metered service? It's available from most carriers. How many people opt for it? Not many. Why? Because it's usually much more expensive than the metered rate plans. And I'm talking about the truly metered plans and not the monthly-block plans which appear artificially low in cost because they plan to either hit you with overage charges or take some of those minutes you paid for back. The same basic economics apply to wired and wireless information/communication services.

    Of course, I could give many examples of other markets in which people would probably laugh at the idea of unlimited flat rate plans. How about motor fuel? Charge everyone a monthly flat rate? The big trucks would probably love it, but I doubt the motorcyclists would. Ridiculous, right? Or how about other consumable services like electricity, gas or water? How would metered rates likely compare to unlimited flat rates?

    As for the claim that ISP's would have some significant equipment billing cost increase, that's just not true. I've worked in the industry and know that most ISP's already track each account's usage with the equipment that's already in place. And talk about customer confusion and anger, that's exactly what the current "unlimited-but-not-really" plans create. I bet far fewer people are "confused and angered" by their monthly metered water bill.

    As for people refusing to visit sites that they otherwise would because of the additional bandwidth used, I don't think that would happen to a significant degree. As an example, most people already pay for metered electricity to operate their televisions. But how many choose what shows to watch based on whether not the show is worth the electricity to do so? I know that there are bound to be some out there but none that I know. For most people, their time and other considerations are so much more important than the electricity used that it just isn't a significant consideration.

    There have been a lot of claims of metered internet service somehow being a throwback to some earlier time. Well, I'm not really aware of any past examples of national ISP's offering metered service. A lot used to charge based on the amount of time you were "connected", but not on usage. I always thought that was kind of a raw deal. Like if the electric company charged you for how long the lines connected to your house each month rather than how much electricity you actually used. That's not metered service.

    Now, I don't think that there shouldn't be a choice. I would like to see the ISP's offer a choice between metered service and flat rate. What I'm having a hard time believing is that the major broadband ISP's would actually go along with something that I see as being actually good for the consumers. It's just not in their character. The only thing I can figure is that while they talk metered service they're actually intending to implement monthly capped service like the majority of cell phone plans. I think that metered service should be legally required to be truly metered-pay-for-what-you-use. Not the monthly-limit-screw-you-if-you-go-over kind of crap. That's just scammy and not real metered service.

     

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    PaulT (profile), Sep 14th, 2007 @ 12:46am

    There's a precedent - look to history

    Some interesting responses here, but to see the effect this kind of thing can have, you just need to look to history. Remember when the internet bubble first started to form in the '90s? Remember how it seemed that every piece of innovation was coming from the US, with few sites and services directed elsewhere.

    This was because internet dialup was charged by most ISPs as a local rate call. Through some quirk in history, US local calls were free while in Europe and elsewhere, you had to pay. So, US customers only had to pay their ISPs for access, while others had to pay twice - once to the ISP, once to the phone company. This stifled internet usage in other territories.

    I was in the UK at the time - the internet was a very expensive luxury. As time went on, ISPs that didn't charge directly for access (e.g. Freeserve) introduced a lot more people online, then flat-rate dial-up and eventually broadband have made the internet a utility - for most, not a luxury. Hell, even my job (sys admin for an internet casino) depends on people having cheap, easy internet access.

    The simple fact is this: we can't predict how people will innovate on the internet next. But, if we introduce the possiblities of higher costs for users, people will be less willing to try out new services as well as be wary of using existing technologies to their full potential (as an example, Skype calls suddenly cease to be either cheap or free, so maybe people stop using it in favour of a traditional phone call)

     

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    RandomThoughts, Sep 14th, 2007 @ 11:05am

    The question is should heavy users pay more than light users? I would be all for metered billing that charged someone more for uploading and downloading high bandwidth content but only if Granny, who only used the Internet for email, received a nominal bill. If you are going to charge on the top end, you have to give the bottom end a break.

     

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    Paul, Sep 14th, 2007 @ 5:15pm

    Charging for bandwidth might be a good option for many but I would rather have a choice of either being charged per mb or per month with unlimited usage. The more choices we have the better, especially when it comes to high-speed internet providers like Cable or T1

     

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    |333173|3|_||3, Sep 17th, 2007 @ 4:04am

    Speed-based charges

    Anyone who needs to do a lot of bandwidth-intensive work will pay for a faster connection, while those who don't want or need it will not pay. Whilst this does not solve the problem of those who leech a lot of files, it does mean that the Aunt Tillies of the world can use the internet for email and basic uses without having to pay as much as those who want to play games 24/7 while downloading TV and torrenting files.

     

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    MY, Jul 31st, 2008 @ 6:53am

    Metered broadband would be reasonable if they give us the speeds that they promise first. I'm using comcast and they say speeds go up to 16mb/sec. Well, in my years of using it, it has never gone above 1.5mb/sec.

     

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    Derek Kerton (profile), Aug 29th, 2008 @ 9:13am

    Great Comments

    There are some great comments on this post, arguing both sides of the issue.

    RE #39 above, you are not correctly evaluating your Comcast connection, I fear. Most web servers, file servers, etc. limit the bandwidth any one visitor can use, thus even with a true 16MB connection, you will often only get content to your browser at ~400Kbps. Have you done a speed test at a site like DSLreports.com? This is a better way to test your throughput, but also not entirely fair to the ISP, because a bottleneck could be from your connection, or from other hops on the Internet.

    On content metering. I like it. I favor tiers of service (like our buckets of cell phone minutes) and I think it has the potential to lower prices for grannies, keep them the same for most users, and raise them for the heaviest users. Sounds fair.

    My only concern is that metering, tiers, or caps in a market where competition is weak (um...the US), then the meter, tiers, or caps could be used against the customer to squeeze more revenue while offering little benefit. But despite this, the problem isn't the metering...it's the lack of competition.

     

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    KB, Nov 12th, 2008 @ 7:58am

    Just my take...

    Ok, so metered internet usage is a bad idea, but it's especially awful when people are forced to purchase internet service from a provider who has a monopoly in their area. Monopolized internet and cable companies are trying to FORCE, yes FORCE, customers to pay ridiculous amounts of money for something that has been relatively inexpensive for a long time now. It is not even going to be a free enterprise system anymore. Monopolies should be banned along with this internet usage capping.
    What does this "innovative idea" of capping mean for consumers?
    Many people work remotely from their own homes on the internet, using at least 1 GB a day just for work alone. Won't these "caps" cause these people to quit their jobs in order to be able to pay for their internet bill?
    Downloading one movie online, LEGALLY, uses close to 8 GB. There goes $50. Great! The companies are not simply capping illegal bandwidth usage or spamming. They are hurting online internet companies that sell downloadable movies and music. It is not difficult even for light internet users to go over the allotted GB limit.
    Watching tv online, which has become so popular recently, is going to become more expensive than fifteen cable connections. The cable companies are the ones who are capping internet usage. They don't want the internet to override their television, which is basically just continuous advertising that viewers can't control. This helps the businesses who advertise get more viewers as well.
    Watching news online is going to be impossible. People will be less informed about current events. I believe that the internet has recently become a great way for people to stay in the know on political and social issues. However, from now on, out of fear of using too much precious bandwidth, people may choose not to watch these news shows.
    This capping is just censorship and monopolization, plain and simple.

     

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