Broadband Caps: Is A Meter Running While You Read This?
The post I did last month on the subject, noting Time Warner Cable's shelving of its plans to sell metered Internet access, generated some interesting comments that got me thinking further.
That brings us to today's piece, in which I try to figure out a best-case system of usage-based billing. My vision doesn't bear much resemblance to Time Warner's proposal, the tiered plans already implemented by a few smaller cable-modem operators or the usage limits in place at such companies as Comcast or, in a more stringent form, at the satellite provider HughesNet.
(It's fair to argue that usage-based billing schemes like TWC's and outright caps like Comcast's are separate creatures entirely -- for one thing, if you exceed Comcast's cap, it won't even let you pay extra. But both involve placing a limit on something previously sold as "unlimited.")
As I was sketching out these optimal broadband-cap scenarios, I did so without assuming any ulterior motives on the part of any Internet provider implementing such a plan -- but, given the past misconduct of some firms now imposing broadband caps, that's difficult to set aside.
For example, many critics of broadband caps argue that they allow cable-modem providers to discourage customers from watching TV online at sites like Hulu or through services like Apple's iTunes (where a high-definition download of the latest James Bond flick weighs in at 3.54 gigabytes).
National Cable and Telecommunications Association spokesman Brian Dietz rejected that idea, saying that many cable operators have video sites of their own and have plans for more. I find his defense reasonable, largely because any cable operator hypocritical enough to exempt its own site from its own broadband caps would find itself in a self-made PR nightmare.
But if you can make usage-based billing palatable, do you need to?
Providers of other Internet services have found it practical to get rid of consumption caps -- consider, for example, the Web-mail services that no longer limit how many messages you can store, or the Web hosting plans that lack the traditional monthly bandwidth quota.
Derek Turner, research director at Free Press, a Washington-based lobby that advocates net-neutrality policies and opposes broadband caps, wrote in an e-mail that usage-based billing was neither "fair or efficient, because carriers themselves don't pay for transport by the byte -- they pay by the size of the dedicated line leased to transport data."
Ultimately, this is a business decision, and that's where I find myself skeptical of the whole broadband-cap idea. Like a lot of other proposals to use technology to implement "perfect" enforcement of existing rules or policies -- say, attaching GPS receivers to every car in America to tax drivers on their mileage -- the only guaranteed winner in this scenario seems to be whatever company gets to sell the new enforcement tools. I'm not so sure about the ultimate benefits to the Internet provider itself, much less its customers, when it already has a billing model that works pretty well.
Agree? Disagree? The comments are yours. You can also share your thoughts in my Web chat, starting at noon today.
May 1, 2009; 10:05 AM ET
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