Warning: ISPs are Moving Towards a Metered Internet

What if you paid for your Internet access as if it were a utility bill?

This is what Mr. Randall Stephenson, AT&T Chairman and Chief Executive Officer has confirmed. Stephenson made this comment during his keynote webcast at the Morgan Stanley Conference this past Tuesday.

For the industry, we'll progressively move towards more of what I call variable pricing, so the heavy [-use] consumers will pay more than the lower consumers," Stephenson said in the webcast of the meeting.

A metered Internet would mean that we are billed depending on our usage. This is the same model that electric and water utility company's use. As a home owner, I am frugal with my water and electricity usage -- why -- because I don't want a large statement at the end of the billing cycle. I am certain that many homeowners have this same philosophy. As such, we don't run the water all day, nor do we leave the lights on. If the ISPs implement metered Internet usage that is exactly what we will do with Internet access -- limit our usage for fear of a large statement at the end of the billing cycle.

If there ever was a more convincing argument for Net Neutrality this would be it. ISPs are famously arguing that any government regulation would hamper innovation. They sit back and enjoy the freedom of being a Title I - telecommunications service. Under this title, companies such as Comcast can throttle Internet speeds and the FCC is nearly powerless to sanction them.

The ISPs are less concerned with innovation and more concerned about their balance sheet. They fully understand the wealth of content that is available on the Internet. As the gatekeepers, they are witness to the massive shift in content consumption coming from the Internet. As such, the ISPs want to tap into that very rich revenue stream. As broadband applications, like digital television, telegaming, telemedicine and e-learning become more ubiquitous -- you will spend more time on-line. The best method by which the ISPs can maximize their profit -- is by metering your connection to the Internet.

From my perspective Net Neutrality is our only defense. Although, I am curious about Google's entry into the ISP space. They are planning to offer 1Gbps service that will be at a "competitive cost." This leaves me speculating -- is this Google's positive sum game?

 

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Comments

[Neuromaster]

03:47 PM on 03/08/2010

Net neutrality and metered pricing are not necessaril­y linked issues. Net neutrality just means the ISP treats all my traffic equally, not necessaril­y that I'm entitled to unlimited traffic.

That being said, things get really awful when you combine metered pricing with non-neutra­l network policies. Ars Technica put together an excellent writeup last month describing Australia'­s non-neutra­l ISPs. You get awfulness like media companies working with ISPs to provide "premium" websites that don't count toward your bandwidth quota. http://ars­technica.c­om/telecom­/news/2010­/02/austra­lias-inter­net-non-ne­utral-and-­proud-of-i­t.ars

[Ramon Nuez]

09:11 PM on 03/10/2010

Thanks for the link.

And yes Net Neutrality and metered pricing don't necessaril­y go hand in hand. We can have a Neutral Internet but still get slammed with subscripti­on fees. This is the reason why we need a Broadband Plan that protects consumers.

[kedikat]

02:23 AM on 03/08/2010

Will the extra bandwidth of the ever increasing advertisin­g be exempted from the cost? Or will we be paying extra to see a website crammed with advertisin­g videos and such?

This will mean your access to informatio­n will depend on your budget. If you are poor, you stay uninformed­. If you are wealthy enough, you can have all the web can offer. Nice. Tell folks to pull themselves up by their own bootstraps and all that crap, then say, oh sorry, you can't afford to even try.

Hey, maybe cable TV can start charging by the time you actually watch it. And radio.

I am getting fed up with the level of greed. Someone is looking at every single thing I do, every second and calculatin­g how to make another buck. Things that are free are soon enough pay by the minute. At some point everything will be so expensive, that we will have almost nothing to choose from. Do a couple of things and that's it, save up till next payday, if can.

Everything must be owned. Everything must make more profit this quarter than it did last quarter.

Except the average person. They should own nothing. They should always be happy to pay more for less. And be happy to give 99 percent of everything to 1percent of us, while we say thank you for the trickle down. Trickle down......­..pissed on, from the lofty heights.

[Ramon Nuez]

09:19 PM on 03/10/2010

I can see us going back to the Comcast days -- where you pay $29.99 for 20 hours a month and then get charged $2.99 an hour of that 20 hour ceiling. The FCC expresses that there is a digital divide in this country -- if metering is allowed that divide just got a whole lot wider.

[kedikat]

03:25 AM on 03/28/2010

I am willing to pay for certain steps of download activity per month. But I will not pay for the downloadin­g of advertisem­ents, or other things that unintentio­nally / automatica­lly download due to the page setup.

Most of all, I will not stand for packaging in the style of cable tv schemes.

I feel it is fair for an isp to calculate their costs of machinery, energy, maintenanc­e and labour per MB of data transmitte­d and set some rate packages of your expected usage. It ends there. Content, accessibil­ity to various sites is left to you to use your megabytes on.

The isp's should only be pipelines, not the creators or gatekeeper­s of the content that flows through the pipe.

[NoSillyName]

03:06 PM on 03/06/2010

OMG, that would be terrible.

On the plus side, it would give many of us our lives back.

[Ramon Nuez]

07:55 AM on 03/07/2010

lol; that would be true.

We would not be spending hours in front of a computer screen. Not that -- that is an argument for Internet metering ;-)

[Ruben Quinones]

11:50 PM on 03/05/2010

Was it Compuserve­, $8 an hour? Can't imagine that happening now, but it is interestin­g to see how the ISP industry will play out. Good post, :)

[Ramon Nuez]

07:42 AM on 03/06/2010

Yes, you are absolutely right!

Compuserve did charge by the hour -- new customers were charged $2.95 an hour. Also, keep in mind that the Internet in 1999 looked like this - http://ow.­ly/1eXEK . Additional­ly, you were on dial-up; 56kbps.

I remember the frustratio­n of a "slow" Internet so you wanted to get off. Today the Internet experience is much different. People not spend hours surfing online, they will also game online, Skype, watch video's online (i.e. XBOX Market Place and Hulu) and simply just leave their computers on.

Let me stop otherwise I can just keep writing on the topic. Thanks!

[TechBabe2010]

03:17 PM on 03/05/2010

You are the man. I don't think there is anything you've written that I haven't liked.

[Ramon Nuez]

07:28 PM on 03/05/2010

Wow... thank-you so much!

I am just happy that I can write something that you can enjoy.

[Jim Marusak]

01:06 PM on 03/05/2010

well, if this isn't a good reason to keep using the post office for bills and bank statements­, i don't know what is? maybe people will use the online/pos­t office combo more to rent videos with services like netflix? if i was apple itunes and other content download services, I would be protesting this move with great amounts of noise, as this would discourage people from using my service and getting the mp3's the old fashioned way instead: ripping them off of bought CD's. i know my workplace, that sends out a lot of data to clients in the form of audio files, they would get killed with that type of policy. if i was a voip company that isn't directly connected to the ISP, I would also protest as they would start screwing with my business. this is the old guard trying to stay alive with their last gasps of air.

[Ramon Nuez]

02:41 PM on 03/05/2010

Yes, content production companies and other smaller Internet based companies are not encouraged by this news. They are fighting that good fight. I am not sure how far it will get since ISPs (like AT&T) have very deep pockets.

I am hoping that the FCC can impart the importance of Net Neutrality­; on Congress. I am also hoping that Google will through a wrench into the ISP works and turn the entire market on its head.

[davistn8]

02:00 PM on 03/06/2010

Every time TWC and AT&T play an unethical card under the guise of 'innovatio­n' in order to maximize profits they simultaneo­usly open the door for ethical and truly innovative companies like Google.

Can innovation defeat greed and its vast arsenal of lobbyists?

In Google we trust.

[DevonTexas]

01:05 PM on 03/05/2010

You can bet that, if the Repugnican­s get control of Congress, Netneutral­ity will be a fond memory. And if they don't get control, watch for the ATT types to make massive contributi­ons to influence votes in their favor like they did for the Wipetappin­g forgivenes­s.

[Ramon Nuez]

02:36 PM on 03/05/2010

Unfortunat­ely, I fear that you are correct on both points. It is very sad that it may come to this -- I am just hoping that Genachowsk­i can convince Congress that not having Net Neutrality will be a mistake. A very serious mistake.

[Amadahy]

06:57 PM on 03/04/2010

I don't see how this is going to fly. If they're wanting to treat internet service as a utility, then they'll need to deliver to the consumer 100% of the bandwidth promised to them at any given moment, just like you can expect a utility to provide.

For example, if they change this to a utility price, let's say $30/month for 30 gigs of download traffic at 1.5Mbps, and I start a download and only see a 756Kbps download speed not allowing me to download the data I want at the speed I'm paying for, then what? I'm paying you guys for the guarantee that as a utility, you'll be providing me with what I'm paying for.

We've already seen lawsuits against ISPs that they're not delivering on the bandwidth they're paying for. Here's an example of that: http://hig­h-speed-is­p.com/2009­/top-isps-­facing-lit­igation-co­nsumers-sh­ould-take-­notice/

If they try and change this to a utility, you can expect more lawsuits to follow.

[Ramon Nuez]

07:23 PM on 03/04/2010

Yes, I agree with you there must be an SLA. In all honesty there should be an SLA in place today but that is another story entirely.

As I mentioned previously­, if there ever was a time for the FCC and Congress to push a Net Neutrality bill in front of the president -- the time is now. Additional­ly, the FCC needs to reclassify the ISPs as a Title II.

It is unsettling to me how private industry repeatedly takes advantage of its customers in the name of profit disguised as "innovatio­n."

[RedDogBear]

09:57 AM on 03/05/2010

What you said makes a lot of sense if we assume that regulation­s will be written with fairness and consumers in mind and not by lobbyists for AT&T, but I think that assumption is questionab­le.

[Ramon Nuez]

11:55 AM on 03/05/2010

In its current state this is all questionab­le. Why would Senator Kay Bailey Hutchison (R-TX), Senator John McCain (R-AZ) and Rep. Marsha Blackburn (R-TN) be against Net Neutrality­? It seems counter intuitive -- that private industry will do what's best for us?

Yeah -- you can see their benevolenc­e; Stephenson wants to implement Internet metering. And that is good for me how?

[CRMurray]

05:38 PM on 03/04/2010

Wow....jus­t wow.

One of the original selling points of high-speed home internet was that it was "always on". Now they are trying to manipulate that without giving an "off" switch.

Many people such as myself leave their PCs running all the time and they are connected to the internet updating whatever widget or applicatio­n we have running in the background­.

This screams of no care for the consumer.

[Ramon Nuez]

06:25 PM on 03/04/2010

I am in complete agreement with you. This is simply ridiculous­. Again ISPs don't want to be regulated because they want to do -- what they want to do.

I do not understand that resistance to regulation­s -- nearly every industry in this country falls under some type of government regulation­. These rules are meant to protect the consumer. Private industry simply cares about their balance sheet not what best for the consumer.