Charging by the Byte to Curb Internet Traffic

June 15, 2008 by Thad McIlroy

The title of this blog entry is also the title of a piece

in today’s New York Times. The story

is most simply stated by quoting from part of the second paragraph: “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.”

Time Warner Cable, Comcast and AT&T are all

experimenting with plans (read this as “about to implement said plans”) to

first of all offer tiered monthly pricing based on the amount of data that can

be downloaded, and supplement that with additional “per gigabyte” charges for

those who go beyond their contracted limit.

The Times

article reads as very sympathetic to these ISPs, with quotes like “all three

companies say that placing caps on broadband use will ensure fair access for

all users” and “the goal, says Mitch Bowling, a senior vice president at

Comcast, is ‘ensuring that a small number of users don’t impact the experience

for everyone else.’”

But the actual strategy is obviously quite different

that what’s quoted in the article. Who are the heavy bandwidth users? People

who are fully engaged in video on the Web. Much of the video is coming out of

Hollywood and TV-land, and from sites like YouTube. These ISPs clearly just

want their “vig” (short for “vigorish”): bookmakers’ and gangsters’ slang for a

cut of the action. They make lots of money; why shouldn’t we (even though we’re

already are raking it in)?

As the article notes: “Even if the caps are far above the

average users’ consumption, their mere existence could cause users to reduce

their time online. Just ask people who carefully monitor their monthly

allotments of cellphone minutes and text messages.”

This is bad news for the future of publishing. As

always, the greed of the companies panning for Internet gold remains limitless.

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