Mobile broadband providers are well-known for metering data bandwidth for those who use their products and services. AT&T caps data for customers, and Verizon enforces limits as well. Around the world, people are getting more and more used to the idea of having their usage restricted to comply with “shortages” that occur in the where volume of data that flows through the digital pipeline every day. Although some carriers, such as Sprint, don’t actually have limits, and use their still existing unlimited data in advertisements to distinguish themselves from competition, we all must come to the realization that sooner or later, things aren’t going to be without a leash. We’ll have our cake, but we may have to take our time eating it.
But one industry in the United States has yet to adopt a capped policy as a standard yet. Home Internet providers. True, AT&T U-Verse customers frequently deal with problems similar to their mobile broadband counterparts (many have both services), but cable service providers are still, for what we can see in the near future, wide open. There are no limits or restrictions on your service. Use as much as you want, whenever you want, for one “flat” rate.
It’s a great system, and for the most part consumers are happy with it. I’m personally a Comcast customer myself, and while they aren’t my first choice, they own the area I’m in, so I’ll have to deal with it.
However, this bit of safe haven may not last for long, as we can all feel the chill of metered communication creeping through the digital breeze. Comcast has already considered playing around with the idea of switching to a usage-based pricing structure, which may save people money, but would likely cost quite a few heavy users (like myself) a lot more.
But, as the title suggests, would this sort of switch to usage-based pricing even be allowed by our current laws? If you stop to consider the huge impact such a change would have for a moment, you’d realize that this type of movement would hurt corporations far more than consumers.
The United States Department Of Justice has been looking into the impacts of data caps, and other usage-policy moves by service providers, to see whether or not policies would qualify as anticompetitive or not. More specifically, they’ve been looking into Comcast, and their move to allow their own streaming service to be used without effecting their bill. The system would have made their own streaming service free for their customers, but other streaming services such as Hulu and Netflix would have still racked up data usage. Definitely not a fair system.
Many would argue that data usage caps have never actually been about network congestion, but have instead been a ploy to raise revenue without changing anything in regards to operations (basically raising profits without any further investment). Although Comcast has a unique situation that doesn’t apply to other carriers and isn’t the primary focus of my thoughts today, the part about the policies of a cable company effecting streaming service providers has me thinking. Wouldn’t data caps in general hurt internet companies? As in… All of them?
It would not only hurt them… but it would likely kill them off entirely in many cases. Companies such as Netflix, for example, who has shown exceptional growth in the past year, depend on their customers being able to access streaming content, in the unlimited amounts that they promise for “only eight bucks a month.”
AT&T, for example, limits their customers to 150GB caps for DSL subscribers, and 250GB data caps for U-Verse. This is a limit imposed on the amount of data transfer your account can do per month, from home, likely shared between multiple computers. You try and torrent in that household and see how fast your parents take away your computer and/or charge you for the crazy charges on their bill later. A Netflix movie in HD typically consumes around 4GB depending on the movie. An episode of Lost would run you close to 3GB on average. That means that, if you were to try and take advantage of ‘unlimited tv shows and movies’ from your Netflix streaming account, you couldn’t. Instead, you’d have to really watch yourself. If you wanted to continue watching after you reach your limit? It’s $10 per additional 50GB of data.
To put this into perspective, I’ve used nearly 1TB of data this month alone, from just my computer. We have three people in the house. I’m talking cable bills in the thousands of dollars here people, and it clearly isn’t costing Comcast that much to send me the data. Last year, Netflix accounted for over one-third of the downstream traffic of the web. As in, the entire web. No kidding. I bet you that doesn’t last long with people paying on a metered system.
Can’t see it yet? Let me bring it to you this way: How often would you stream movies if you were on a usage-based pricing structure with your home internet, where ‘the more you use, the more you pay?’
If you actually answered “all the time,” good for you and all your riches. For the rest of us with less than a small fortune to blow on entertainment, the answer was likely closer to “not very often.” The truth is, while internet service providers would likely love a usage based system of payments that free up more bandwidth, all while increasing their profits, the move to a metered internet for consumers would virtually kill almost all streaming services completely, unless their data caps were very generous, or their rate-per-GB were set uncharacteristically low.
… which is the entire point.
The reason SOPA, ACTA, PIPA, the IP Attaché Act and more exist today is because of political pressure coming from the entertainment industry. What is their primary goal? To stop people from pirating their stuff? No. To stop people from stealing their intellectual property? They’d say yes, but I still say that’s not specific enough.
Their real goal: Stop people from consuming content from places outside of their control. Pretty straight forward, and they’ve been taking the legal route to fundamentally change how the internet works in order to get their way. So far however, the internet continues to speak up, and has been winning in court.
But there are other ways for these greedy entities to get their way. Think about it…
Would pressuring service providers to employ metered pricing do the job? You bet your ass it would. It would virtually kill pirating and downloading content all together as far as I’m concerned. Nobody is going to leave their computers on overnight downloading 10-20GB of content from the web when they’re seeing hundreds of additional dollars worth of charges every month. There’s just no way.
You see, when it becomes more expensive to download 50GB worth of movies than it does to rent it in the store, people stop downloading. If Netflix costs $8 per month to stream “unlimited” content, but in the process you rack up an additional $30 to your cable bill, you’d simply stop watching, or watch much less. People would be consuming less on the internet, and more with the traditional ways of old (which is exactly what they want).
This would be bad for everyone. The internet could grow stagnant and boring. Self-expression would be limited, because users struggling in a tough economy don’t have the money to watch large quantities of video. It makes sense to me.
So what are your thoughts? Do you think that internet service providers would risk destroying online innovation to make more money, or is there an alternative to address the problem? How do you believe we can continue to enjoy great break-through services while continuously being held back and limited in our capabilities as consumers? What should be done. Let us know your ideas in the comments below.
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