THE END OF THE FREE RIDE?….Today, most internet users pay a flat monthly fee that doesn’t change regardless of their activity level. According to Time Warner, the result is that 5% of their customers account for over half of their network’s overall capacity, and they’re now planning to make that 5% pay for the privilege:
Time Warner Cable  began a trial of “Internet metering” in one Texas city early this month, asking customers to select a monthly plan and pay surcharges when they exceed their bandwidth limit. The idea is that people who use the network more heavily should pay more, the way they do for water, electricity, or, in many cases, cellphone minutes.
That same week, Comcast said that it would expand on a strategy it uses to manage Internet traffic: slowing down the connections of the heaviest users, so-called bandwidth hogs, at peak times.
AT&T also said Thursday that limits on heavy use were inevitable and that it was considering pricing based on data volume. “Based on current trends, total bandwidth in the AT&T network will increase by four times over the next three years,” the company said in a statement.
The enormous boom in long-haul fiber construction in the late 90s, followed by the dotcom bust, left us with so much overcapacity that for the past decade there’s been no point in charging for bandwidth. It was, literally, too cheap to meter. However, that era is coming to an end, as is the era of exponential growth in broadband subscribers, which drove the buildout of local switches and routers by cable companies. But if demand for video is driving demand for more bandwidth, then someone’s got to pay for it, and that means either we keep the flat-rate system and everyone’s price goes up equally, or else we start charging for it, just like we charge for electricity, water, telephone calls, and interstate highway use.
Short of some kind of massive government investment in public, high-speed fiber to the home — which seems unlikely — I’m not sure how we avoid this. Reliable, high-def video delivery requires a ton of infrastructure development, and someone’s got to fund it. One way is to ditch net neutrality and allow phone companies to give priority to their own digital video services. Another is “traffic shaping,” which penalizes users of specific high-bandwidth services, like BitTorrent. A third is to remain content neutral and simply charge for bandwidth regardless of its source.
There may be a fourth choice I’m not thinking of, but in the near term it’s hard to see how flat-rate charging stays alive as we start bumping into infrastructure constraints. If that’s the case, I guess my vote would be for the content neutral option. It seems like the least worst of the three.