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Broadband Caps: Is A Meter Running While You Read This?

Today's column picks up on a concept that's been noted here before -- "usage-based billing" for Internet access.

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.

By Rob Pegoraro  |  May 1, 2009; 10:05 AM ET
Categories:  Telecom  
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Haven't we already paid for our internet usage? I am curious, how much money has our government invested in laying down the lines by which internet service travels?

I find the pay per byte mindset to be amazing, especially if one hopes to inspire internet business.

The countries that have laid down the internet to cover service for and benefit the public, like other utilities, have made and now benefit from their investment.

Isn't there a useful product the company's can create and sell instead?

Posted by: NewslettersFMF | May 1, 2009 2:13 PM | Report abuse

Derek Turner is correct that providers costs are essentially fixed and based on capacity in Mbits/s however in practice peak time GBytes per month translates neatly into required Mbits/s so its a moot point.

The essential question is how to allocate a fixed cost base out to the users in a way that is "fair" (a useless and undefined word) and maintains a decent quality of service for everyone. Limiting the excesses of the few with a monthly cap will undoubtedly preserve the experience quality for the many. Charging a low user $10 and a high user $50 or more per month would meet at least some definitions of "fair".

The first thing to realise is that there's a finite capacity somewhere in the network and the consumers are sold many times that finite capacity and are capable of swamping it.

Posted by: cynical_observer | May 2, 2009 1:00 PM | Report abuse

As a usually light but sporadically heavy downloader I find Comcast's 250GB monthly limit reasonable. What I don't like is that they've been promising since last fall to let us keep track of our monthly usage and still haven't followed through. However, I've found a nice unobtrusive freeware utility, NetMeter 1.1.3, that does the job and can not only tell you your D/L and U/L running totals but can project your usage for the month and warn you when you reach a limit that you can set in advance. Furthermore, all my virus and malware scanners pronounce it innocuous. It can be downloaded at;dl=item14.

Posted by: lengoldstein | May 3, 2009 12:52 PM | Report abuse

Why pick on the little guy?
Why not bill based upon upload bytes?

The sites that upload megadata are the ones with net based revenue.

There should be a sensible upload/download ratio that could be used to adjust billing.

Posted by: GeorgeM36 | May 5, 2009 5:49 PM | Report abuse

The traditional Washington Post pages could aid in reducing bandwidth consumption by examining their scripts. Many times the pages load twice or three times in Firefox, which doubles or triples the amount of bandwidth consumed. If we're ultimately going to be stuck with bandwidth caps, then it would be nice if web authors would help us avoid hitting them.

Posted by: BoteMan | May 6, 2009 11:43 AM | Report abuse

Caps would be acceptable only if capped accounts are offered as an option for a lower cost than the accounts available now, which should remain available at without caps current pricing. When cheaper capped accounts are on the market, providers will have the option to offer creative solutions such as limiting only peak-time traffic. If ISPs want to reduce congestion, let them eliminate spam by agreeing to a new mail protocol that reliably identifies senders.

Posted by: PoliticallyNaive | May 7, 2009 12:28 PM | Report abuse

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