Thad McIlroy - The Future of Publishing

Charging by the Byte to Curb Internet Traffic

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.”