Early this month, Time Warner Cable began a trial in a Texas city of something called “Internet Metering”. The basic idea is that you only get so much internet usage each month, and you may be fined if you exceed your monthly allotment. They’re selling different packages with different caps, starting at $30 for 5 gigabytes.
Proponents argue that broadband is a limited resource, and those who use more should pay more. That’s awkwardly near a truth, to an extent, but the current setup already provides for different price points based on different speeds, without relying on arbitrary and artificial limits on usage. Those people who just want cheap internet rates in order to check their email and maybe access one or two webpages never canceled their dialup accounts with AOL. For the rest of us, who enjoy spending time online, we’ve shown we’re willing to spend a few extra dollars so we can do what we want with our connection. We don’t want to have to ration out our supply of internet like it’s on the brink of extinction.
The reason why these experiments into download caps pose no real threat to online video is simple: free market competition. If today’s Time Warners and Comcasts had a full and perpetual monopoly over broadband internet service, then high bandwidth uses like online video, distributed business conferencing, and multiplayer gaming might all have something to fear. Fortunately, people have already gotten used to worry-free internet usage, and there’s no putting this genie back in the bottle.
As long as people still demand the speed and uncapped usage that they’ve enjoyed for years now, companies will rise to meet that demand. Not too long ago, Grande Communications, a regional Cable Internet/Televison supplier, became available to my neighborhood, offering 14% faster download speeds compared to Timer Warner for $5 less each month. You can probably guess who I’m now using to post this blog.
America has long since learned its lesson regarding monopolization of basic services. Just think back to Bell Telephone, and exclusively privileged electric providers that refused to wire unattractively located neighborhoods. Few still doubt that high-speed internet is on it’s way to being as widespread and “necessary” as telephone service, and with such tremendous market potential, the Grande Communications of the world are just waiting for Time Warner to make a serious misstep. More often than not, America’s cable infrastructure (the actual wires running to your house) are decades old, ripe for replacement with today’s technology from newcomers who see proven profitability.
Unlike some limited resources like water, there is no fixed ceiling on how much internet usage can be provided to a city. Yes, certain broadband pipelines are presently reaching their maximum potential, but we can lay new, bigger pipes, as soon as there’s enough market demand to make it worth the investment. The internet will continue to grow as more users are expanding their online habits, and more companies are using the net to make a buck.
Despite the lobbying potential of the internet supply giants like Time Warner to get special legal protections to keep their bloated policies afloat, there’s an even greater number of companies that have finally figured out how to make the internet work for them. Apple TV and Netflix are each partnering with Hollywood to stream hi-def movies to you on demand through your broadband connection. You can count on these big boys lobbying congress as well, demanding that high-speed internet be allowed to grow naturally. Uncle Sam won’t be likely to browbeat Americans into accepting shoddy internet service from providers that have trouble keeping up.
I’m not at all worried about the continued growth of the internet and online applications like video, but if you own a piece of Time Warner, maybe you should be.
Here’s a good New York Times article on the Timer Warner decision if you’re interested in finding out more.
Filed under: Broadband, Online Video, The Virtual Experience
I see articles like this more and more these days. Perhaps the proponents of Net Neutrality are right? I think that if companies starting limiting net usage and in turn begin offering it out on tiered platters, most people will be fine with doing without the net completely.
Are they trying to kill it?
Interesting line of thought… I think most people really like the idea of their internet activity remaining relatively unbounded, and would mistrust the transition to a pay-per-megabyte-used model. I recognize how someone could assume that since people are used to paying for each gallon of gasoline they burn driving somewhere, people should be happy to bring their wallet out for each byte they download.
However, we can’t forget that people HATE having to fill up the tank, and as the price to drive somewhere goes up, the attractiveness also climbs for an unlimited internet to which one can escape. If they don’t like the limited use option that someone like Time Warner offers, rather than choosing to go without broadband altogether, I think we’ll just see people switch to a hungrier provider that’s willing to offer a pricing model that people prefer.
Yay capitalism! I suppose that Time Warner is the only provider available in Beaumont?
I’m not 100% sure on this, but from what I’ve seen, DSL is widely available in Beaumont. Some people have self-reported choosing a DSL option precisely because of Time Warner’s tiered pricing plan. Also, there’s a lot of clamoring for AT&T to start offering U-verse in the area.
It will be interesting to watch everything unfold =)
In Western Europe we do have caps on our monthly bandwidth usage and it is accepted as a normal practice.
There are not that many people anymore that have dial-up over here, except like you said, the ones that only check their mails, but they are a small minority.
However, America and Canada are different in many ways, so you might escape capping for a while longer.
I will keep my thumbs up for you
In England a company named NTL also tried consumption based billing. There was such outrage, customers were canceling
their service with NTL. Within ONE month NTL reversed their new billing policy. If EVERY TW customer effected by this new
billing scheme cancels their service, then it will hit TW where it truely hurts, their wallets. But it will take everyone biting the bullet and canceling service for it to be effective. Also, a supervisor named Iris Andrews is someone we can all call and complain too about this outrageous change in terms. We spoke to her last night for 30 minutes. Just call 336-584-1383 and get through to a representative, tell them you need to speek to Iris Andrews, and you should be connected shortly. If we dont stand together in this then TW will keep looking for new and inventative ways to charge us for services that we already pay out the wa-zoo for!
UNITED WE STAND!!!!!