Data is the New Long Distance Redux
From a Newsweek article by Steven Levy called "The Net Meter Is Running", the cable companies are investigating imposing different costs for different total monthly bandwidth usage. Not surprisingly, they're following the wireless footprint for how to milk money from consumers:
Currently, [Time Warner Cable] envisions offering plans capped at 5, 10, 20 and 40 gigabytes. Five gigs gets you barely two movies and a couple of TV shows, not counting the normal Web surfing, music streaming and e-mail. . . . Bell Canada, which meters service in some plans, charges customers who go over the limit $7.50 per each additional gigabyte. . . . A high-def movie (typically four gigs) could cost you $30 more. (Bell Canada offers an Unlimited Usage Insurance Plan for $25 a month.)
Levy puts forward how plans like this could benefit company bottom lines by effectively reducing consumer choice:
... [Time Warner Cable's] main interest is cable television. An increasingly important component of that business is distributing video on demand. TW's competitors in that arena are Internet companies that intend to do the same thing. The Time Warner plan tilts the field in its own favor. Let's say I want to watch the indie film "Waitress." I may have the choice to order it on my cable box or rent it from iTunes. Each might cost me $3. But if I'm metered, renting it from iTunes might mean that I exceed my monthly limit, perhaps incurring a penalty that's more than renting the movie.Capped monthly broadband plans are as awful as wireless data plans. Adding bandwidth usage costs is like turning the internet into one large 1-900 service.
In Austin, Time Warner affiliate and its competitor Grande both offer tiered upstream and downstream bandwidth. I'm fine with that pricing plan because it doesn't increase my cost for the other services I use on the internet (though Time Warner suspiciously offers nothing between reasonable-cost/way-too-little-speed with high-cost/way-too-much-speed). Over the last ten years, the cable operators have deliberately avoided commoditization of their services— the broadband "Model T" hasn't gotten any cheaper despite an overwhelming increase in the number of people who have one. Holding broadband costs constant despite improved economies of scale via an expanding customer base is questionable. Actively investigating how to make more money from providing less service through monthly bandwidth caps is reprehensible.
