Monday, June 16, 2008

The End Of The Unlimited Internet?

Relevant links:

New York Times: "Charging By The Byte To Curb Internet Traffic"

"Some people use the Internet simply to check e-mail and look up phone numbers. Others are online all day, downloading big video and music files.

For years, both kinds of Web surfers have paid the same price for access. But now three of the country’s largest Internet service providers are threatening to clamp down on their most active subscribers by placing monthly limits on their online activity."

"If my internet is metered, I don't want ads wasting my bandwith."

"Time Warner Metering"

The impact on the relatively young video streaming industry will be huge if customers are charged by the amount of bandwith used. From the NYT article:

"Casual Internet users who merely send e-mail messages, check movie times and read the news are not likely to exceed the caps. But people who watch television shows on, rent movies on iTunes or play the multiplayer game Halo on Xbox may start to exceed the limits — and millions of people are already doing those things."

This will have an added benefit to old-model media, because people will be less likely to download books, TV shows, music, and movies -- legally or illegally.

Then there is the idea that metered usage will bring us back full-circle to the early days of AOL & dial-up. Is this a step backward?

Finally, people who have their wi-fi leeched from other people will be charged for bandwith they didn't use.

But, for me the larger issue is that if the internet providers succeed in getting the metering established, we will be one step closer to having to pay for "packages" of Internet content the same way we pay for cable channel packages.


  1. please note the 3 companies who are publicly discussing doing this are cable companies (at&t has a large cable business).

    and while they might just be shaping the product to their tried and true model, i see this as more of a way to ensure people do not switch off their cable for itunes (et all) and slingbox.

  2. this is insane.

    what's next, HBO charging more to their subscribers who watch more HBO shows than the guy who just watches the Real Sex documentaries?

    "thank you for being a loyal, devoted, heavy a way to say thanks, please start paying more."

  3. Obviously, I'm appalled at the idea of metered internet access. As a webcomic publisher and blogger, the internet is one of my biggest outlets. Metered access limits my ability to create and the ability to reach my audience.

    Unfortunately, I can't really think of an alternate solution. Metered internet is no. But I can't think of yes right now. I'd hate for my internet bill to become as complicated as my fucking cell plan, but that might be what's in store for the future. Yuck.

    I think you might be right, though. The days of unlimited internet and the free content model are soon ending.

  4. The metered approach won't work.

    People like their internet free, fast, and cheap; the moment somebody tells them they gotta pay extra for something they use to get on the cheap, people are gonna grip and complain. The architecture for a metered approach by cable companies would also always be flawed as there is always gonna be somebody who can circumvent the software to get unrestrictive access.

    To put it simply, the genie is already out of the bottle and there ain't no way it's getting pushed back in

  5. Sorry, Genie/cat out of bottle/bag. Good luck putting it back in, dinosaurs. It has worked really well for music so far, right?

  6. Anonymous11:47 AM

    Ain't gonna happen. At least not here in Norway. The market might be different here, but here most of the the ISPs are targeting the dowloaders and online gamers heavily. While the companies might launch metered download for the very bottom tier products, it would be suicide to do this for their high end products since it would drive people to their un-metered competitors. This is my impression based on having worked for two diffrent Norwegian ISPs.

  7. Bound to happen. I remember how my dad didn't want to "pay for tv when we get it for free."

    That didn't last long once you needed cable to even WATCH free tv.

  8. You're really 'the internet is dooooooomed!' lately. It's not going to happen. Microsoft (Xbox), Apple, Youtube... all of the companies who depend on people using up lots of bandwith will band together and freak the hell out on them. Like a clash of giants.

  9. I live in an essentially "metered" area now. I live in the arctic where I pay $80 a month for "high speed" (not really) with a 10 gig a month cap. I'm charged 2 cents for every meg I go over 10 gigs.

    It's a pain in the ass and has severely curbed what I do online. Forget downloading TV shows or movies, even through iTunes. I blew my cap the first month up here and it cost a fortune. Never again.

    It sucks and I constantly want to beat up my service provided (the local phone company), but they're the only game in town (and for most of this part of the arctic. I can't imagine caps and metering going over that well in more populous areas. People up here understand why it's done and they still hate it.

  10. Two things these companies will have to do if they're going to make this work:

    1) Provide a cap on how much one will pay per month. It could be a high number, in the $150 range, but there has to be a limit or people will just drop the service and go back to dial-up for the basics.

    2) Hugely discount the costs for these users who they claim just check their e-mail and do a little web surfing. Those people shouldn't be paying more than $10-15 per month - no more of this $40-per-month minimum.

    Of course, I'll just jump from provider to provider as long as someone is offering simple, reasonably priced ($60/month max), high-speed plans. When those run out, I'll stop subscribing. I've already dumped cable because of high prices, and if the Internet (my way, which includes watching a ton of downloaded/streamed TV shows and movies) is too expensive I'll just spend more time reading books and playing videogames. I'm sure I could give a library card a good workout if it was my primary entertainment option.

  11. @ashez2ashes

    you are right that they would freak out if this gets adopted across the board, but the cable/internet providers are just trying to keep their hands in the till, as the products are where the $$$ is not the wires and "tubes" to get it there.

    we can see a very similar business in video games. the nintendo/sony/sega/wtfever who made gaming platforms were not reaping the same profit margins that the gaming companies were. and see how that shook out, sega now concentrates on games development.

    likely though this will spur new internet providers who cater towards the high bandwidth user with higher speeds and more friendly approach. my guess is apple, youtube, etc will champion them if not become them.

  12. This is exactly where the big companies were going. There was no way we were going to get media that we previously depended on cable for without paying for it.

    When I ordered internet & phone only from Time Warner Cable, there definitely some pressure to get the channels as well. But you know what? I don't need 500+ channels. I can download (legally) and or watch 24, Lost and other shows/podcasts when I want without cable TV. And cable TV does not like it.

    So why do they offer it for free online? They're getting us hooked. Now, we can't live without it (they think) and can slowly charge for usage.

    The big problem I have with this is that I'm already paying for internet! I'm not a hacker; I pay about 50 bucks a month for access already. So I don't understand when people say "free". In fact, in the days before cable, all I had to do was buy a TV and an antenna - a fixed cost. Now, the companies have managed to milk access fees from customers. This pretty much proves that online ad money does not pay the bills for these greedy companies. The fact that as of February of 2009 people won't be able to get free TV without buying a box (and most likely turn to a cable subscription) is crazy enough. Guess who wins in that deal?

    I think customers/end users need to be re-educated to the fact that there is NO FREE INTERNET. Someone is paying for it.

    Secondly, there needs to be clear "downloading" categories. Downloading on-screen content is kind of different than downloading music and video files for use on one's computer. As a customer, I don't want my bill to be itemized like my old phone bill.

    Argh! This makes my head hurt.

  13. This whole issue is a pure greed issue. As others have pointed out, Cable companies are absolutely terrified of the online distribution model. It effectively means the death of cable TV.

    Don't let anyone fool you into thinking there is some sort of "bandwidth crunch" going on and we need to "limit the abusers". This is 100% greed and fear driving this action.

    As for Cable vs free TV and Digital boxes. If you live in a more densely populated area you probably don't need cable to get TV since you'll be able to find plenty of over the air TV. And Digital converter boxes can be gotten for effectively free with a coupon from the government at .

  14. After cooling down from my previous rant/comment, I read this supporting pricing: