THE BLOG
05/04/2010 05:12 am ET Updated May 25, 2011

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?