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How many .NETTER's will this affect if enacted?
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How many .NETTER's will this affect if enacted? - April 16, 2009, 01:06 PM

Internet providers want to meter usage
Customers who like to stream movies, TV shows may get hit with extra fees


By Dan Richman
msnbc.com contributor
updated 7:02 p.m. ET, Wed., April 15, 2009

If Internet service providers' current experiments succeed, subscribers may end up paying for high-speed Internet based on how much material they download. Trials with such metered access, rather than the traditional monthly flat fee for unlimited connection time, offer enough bandwidth that they won't affect many consumers yet.

But as more people use the Internet to watch TV and stream movies, they could bump up against the metered rates' caps, paying expensive over-use fees. Watching a movie may then require paying two fees: one for the movie, another to the cable company.

More and more television programming and movies are available online, through sites including Hulu, Netflix Watch Instantly, YouTube and Amazon.com's Video on Demand.

"If you wanted to watch TV over the Internet in 2000, you had to be willing to take much less content than cable," said Bobby Tulsiani, a senior analyst with Forrester Research in New York. "Now you get much, much more. Of course, you're still watching on your PC, not your TV, so there are tradeoffs, but they are tradeoffs many people are willing to make."

Most consumers probably don't realize how much bandwidth their Internet usage consumes, because they've never had to care. Time Warner, the nation's third-largest Internet service provider, in its five experimental markets is offering 5 gigabytes of downloaded Internet content for $29.95 per month. That translates to 15 hours of viewing standard-definition video, or 350,000 e-mails, or 170 hours of online gaming, or some combination of those activities, according to the company. A high-definition movie consumes about 7 GB of bandwidth.

In addition to compelling consumers to monitor their Internet usage, metering could have broad societal effects, including disenfranchising the poor, retarding network growth and discouraging innovation, some experts say.

"Our use of bandwidth is growing smoothly every year, with more people using more all the time," said David Isenberg, a Cos Cob, Conn.-based independent telecom analyst. "One of the main nutrients on the Internet is low price. If you start stomping on that or putting in the wrong kind of price signals, my fear is you will inhibit all kinds of innovation."

Time Warner Cable, which operates under the Road Runner brand, said it has been offering tiered, capped service in Beaumont, Texas for some time and in March began testing that pricing in four new markets: Austin and San Antonio, Texas; Rochester, New York; and Greensboro, N.C. Still unpriced is Time Warner's maximum available offering: 100 GB per month, said Time Warner Cable spokesman Alex Dudley. Usage exceeding those caps is charged at $1 per gigabyte.

Others among the nation's largest ISPs are also experimenting with caps and tiers.

The largest ISP, AT&T Inc., says it started similar trials Nov. 1 in Beaumont, Texas, and in Reno, offering between 20 GB ($19.95) and 150 GB ($65) per month depending on connection speed, with excess usage charged at $1 per gigabyte.

No. 2 ISP Comcast Corp. allows up to 250 GB per month for a flat fee, calling the one percent of its users who exceed that limit and "asking them to moderate their usage" but not charging them more, said spokesman Charlie Douglas. Verizon, at No. 4, said it has no caps or tiers, while No. 5 AOL offers no broadband service and in any case said it's not considering consumption-based plans.

Both AT&T and Comcast say the reason they're experimenting with caps is to preserve network quality. In an e-mailed statement, AT&T said half its bandwidth is used by 5 percent of its customers, which "has an impact on all of our customers."

But that 5 percent could substantially expand as more and more people consume TV, movies, music and news over the Internet rather than on cable TV. The Internet is not yet a utility, defined as a vital service or substance like electricity, water, and heating gas or oil. In a tough economy, it can be eliminated or cut back. Yet for many, a connected computer receives utility status.

Cable companies are getting worried that more people are watching TV over the Internet. Glenn Britt, chief executive of Time Warner Cable, voiced his concern in February during a quarterly earnings discussion with analysts.

"We are starting to see the beginning of cord cutting," he said. "People will choose not to buy subscription video if they can get the same stuff for free."

It's tough to pin down how many people actually have given up cable most of the evidence remains anecdotal and which customers moved to a competitor. Still, Time Warner Cable lost 119,000 basic video customers in the fourth quarter, even after excluding subscribers it gave up from the sale of some cable systems.

Time Warner spokesman Dudley said his company is experimenting "to accommodate growth and anticipated growth, to better fund that growth." He said consumption-based billing is more equitable.

"Some of the population for whom the Internet buffet has been a very filling proposition are concerned," he said. "We could charge everyone more, or create a plan that charges more to those who use more. The concept of paying for consumption is fair."

Both Time Warner and AT&T stressed that the trials, though they have no announced end dates, are just that: experiments. They'll be modified, or even abandoned, if they meet too much hostility, Dudley said.

"Overwhelmingly we've seen positive results, but we'll see what happens. Presumably we'd retract it if there were enough outrage over it," he said.

Dudley denied the plan is designed to increase revenue in an era when growth of the broadband customer base has slowed. He said it's solely intended to grow the network and improve its quality.

But others wonder whether metering is designed to thwart the spread of movies and TV over the Internet by making it unafforable, thus preserving that business for cable. Onlookers also questioned whether profits gleaned from metering will really be plowed back into network growth.

"The technology exists to never be bandwidth-limited again: it's fiber optic cabling that's virtually limitless in capacity," said Isenberg, the telecom analyst. "But I think the money (from increased ISP fees) will go to executive bonuses and dividends, not to building a new network. They'd need to start new with that, not take incremental steps."

Lauren Rich Fine, research director for ContentNext Media, called consumption-based broadband billing "a huge step backwards."

She added, "Inner-city youth's ability to go online is the best way to give them broad access societally. Consumption-based models will end up being a bigger burden on less affluent people."

Fine said she doesn't see such billing as inevitable. Instead, subscribers could continue getting unlimited access unless they also want video, for which a fair premium could be charged.

Isenberg said he wishes such billing could be avoided.

"We need new ways of thinking about bandwidth. We need to think of it like sewer services and roads rather than like food in a supermarket."

But Alan Mutter, a former cable TV and ISP exec turned commentator, said consumption-based billing, if unfortunate in some ways, is both logical and necessary.

"In the early days of the Internet, especially abroad, uptake of online content was definitely slowed by metered access. There's no question higher or metered fees retard consumption," Mutter said.

In the 1980s and 1990s, American ISPs moved to offering unlimited access as a way of getting big fast. Once customers were signed up, they were reluctant to leave, as that would mean changing their email addresses. Now that ISPs' market shares are more stable, the ISPs have to start adjusting prices so the biggest users pay more, Mutter said.

"I do see that as fair," he said.

But there's one vital factor to consider, he said: competitive forces.

If one company starts to meter and the others don't, the metering plan could fall apart, he said. Or more likely other ISPs could join the metering movement, just making their offers look like a better deal.

"In an environment where consumers are spending less at every turn, I think it's inevitable businesses that have been offering an all-you-can-eat special for a decade will be considering ways to start charging by how much you use," Mutter said. "It's just part of the economic times we live in."

This report includes material from The Associated Press.


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April 16, 2009, 01:09 PM

I got to pay for how much you use and I started to cry...

Boo I say, Boooooooooo!

(This putrid of slime and filth, BOOOOOOOOOOOO.......!!!!)
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April 16, 2009, 01:12 PM

Comcast has sent me two letters in the last year about my usage, if they started charging me as such, I would be fucked, I used 650gb last month.
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April 16, 2009, 01:17 PM

for Time Warner users: http://www.engadget.com/2009/04/16/p...n-based-inter/

as far as i know, comcast and verizon (at least in these parts) haven't moved towards a metered service.

if they bring this crap to the dc metro area, everyone has to complain!!!


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April 16, 2009, 01:23 PM

i forsee pre paid interwebz....then I get that on my $15 pre paid VZW phone

tellin you....ppl never realize convenience till they have to pay for it due to abuse...HD (buy glasses), hulu (get a hobby), 9000 channel packages (srsly...when u gonna watch 9000 channels?) wifi (get some friends)...all of it will spin back and implode shortly....then we'll all be right back on dial up paying the same rates ur payin now, angry cuz you'll have to decide between havin ur internetz or buyin a dime bag. (which will no longer be $10 once legalized - due to the rush of crack heads jackin up the initial selling price) the smart ones will sell the weed and offer faster internetz, then sell you dial up and hope you only search da web while u puff.
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April 16, 2009, 01:43 PM

Quote:
Originally Posted by Oneway View Post
i forsee pre paid interwebz....then I get that on my $15 pre paid VZW phone

tellin you....ppl never realize convenience till they have to pay for it due to abuse...HD (buy glasses), hulu (get a hobby), 9000 channel packages (srsly...when u gonna watch 9000 channels?) wifi (get some friends)...all of it will spin back and implode shortly....then we'll all be right back on dial up paying the same rates ur payin now, angry cuz you'll have to decide between havin ur internetz or buyin a dime bag. (which will no longer be $10 once legalized - due to the rush of crack heads jackin up the initial selling price) the smart ones will sell the weed and offer faster internetz, then sell you dial up and hope you only search da web while u puff.


you have just gone full retard in one post, wow.
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April 16, 2009, 01:45 PM

If this actually starts happening I'm getting a verizon wireless card for my laptop and thats all there is to it. I refuse to have somebody cap how much I can use the internet when it takes nothing for them to keep it up and running at my house.


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April 16, 2009, 01:46 PM

Quote:
Originally Posted by EndoSJ3 View Post
If this actually starts happening I'm getting a verizon wireless card for my laptop and thats all there is to it. I refuse to have somebody cap how much I can use the internet when it takes nothing for them to keep it up and running at my house.

Good luck with that, verizon wireless broadband connect has a 5gb cap.
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April 16, 2009, 01:48 PM

this is stupid. For as much as we all pay for high speed internet the service should be a lot better than it is. They advertise a certain speed and all the test i have run does not produce the speed they advertise. I hate Comcast, I think I'll burn one of their buildings down.
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April 16, 2009, 01:51 PM

Quote:
Originally Posted by CEaton View Post
Good luck with that, verizon wireless broadband connect has a 5gb cap.
You sure about that because i've got a friend of mine who uses his as his only internet with his laptop always doin somethin and he's never told me about having a cap. Maybe its because he's had it for a little over a year.


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April 16, 2009, 01:52 PM

see if you were high and on dial up...you wouldn't be so angry

Quote:
Originally Posted by david636 View Post
this is stupid. For as much as we all pay for high speed internet the service should be a lot better than it is. They advertise a certain speed and all the test i have run does not produce the speed they advertise. I hate Comcast, I think I'll burn one of their buildings down.
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April 16, 2009, 01:55 PM

Quote:
Originally Posted by Oneway View Post
i forsee pre paid interwebz....then I get that on my $15 pre paid VZW phone

tellin you....ppl never realize convenience till they have to pay for it due to abuse...HD (buy glasses), hulu (get a hobby), 9000 channel packages (srsly...when u gonna watch 9000 channels?) wifi (get some friends)...all of it will spin back and implode shortly....then we'll all be right back on dial up paying the same rates ur payin now, angry cuz you'll have to decide between havin ur internetz or buyin a dime bag. (which will no longer be $10 once legalized - due to the rush of crack heads jackin up the initial selling price) the smart ones will sell the weed and offer faster internetz, then sell you dial up and hope you only search da web while u puff.
Racist!

er.. Wait, what are you saying I can't read your typed Ebonics... Did you say something about drug dealers selling interwebz? lol
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April 16, 2009, 01:57 PM

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April 16, 2009, 01:59 PM

What everyone is missing is not that they are upping the prices necessarily because of usage, it might effect electric bills a little, or perhaps server usage... but really an ISP is like a cup you get at Wendys... it's 16oz, you might fill it to 15 or 12 and drink a single cup, and the actual cost of a few people filling it to 16oz or going back for a refil might show up when they need syrup or seltzer, but really it's negligible.

The point is that people are watching movies for free on Hulu, or snagging a 99 cent movie at redbox in the McDonalds instead of paying $4 for demand... what this means is that Cable and FIOS are now NOT selling movies via their packages... which means they want to recomp the cash. It's bullshit... but the business reason is there. And if bean counters decide that bandwidth caps and overcharging will cover the loss in service when they do so, they'll go forward.

Nothing is free... this is a great example of that in a capitalist market. These companys WILL leverage for lost income.


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April 16, 2009, 02:03 PM

a) the tech market is coming out or selling things in Terrabites now so why even worry about a gigabit?

b) There is no monitor on freakin how much cable tv people watch so why would you meter the internet....there is unlimited phone lines, cable tv (up to what you pay for) hell even FREE long distance on cell phones...but you want to METER Internet usage. WTF? Everybody wants to squeeze a buck. We've already been hit for gas? What's next?

c) If anybody posts up "I remember a time when we didn't have internet...." shoot them.


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