The End of the Era of "All You Can Eat" Internet?

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From WINXP Newsletter ....

The End of the Era of "All You Can Eat" Internet?

Back in January, we reported that due in part to the push by some for "network neutrality," ISPs were likely to head back to the bad old days of charging for Internet access according to per-hour or per-megabyte/gigabyte usage. George Ou was warning us about this unintended consequence of the net neutrality movement, and that warning has proven prophetic.

First Time Warner began "testing" the new pricing model in Beaumont, Texas. Time Warner reportedly has several tiers of plans, with the most expensive one ($50something per month) capping your usage at 40 GB. Go over that, and you pay a dollar per gig. Some pundits predicted that they would never get away with extending that to other markets, and it would die a quick death. Instead, this week AT&T announced that they, too, are considering a similar type of pricing.
The Associated Press: AT&T looking at charging heavy Internet users extra

Some folks have noted that Beaumont was a curious choice for a testing ground. Cynics point to the fact that it may have been chosen because it's an area with few choices for broadband Internet access, so there's not much that computer users can do to protest the new terms - you can't realistically cancel your service if there's no viable competition and you need the access for your work or personal business.

Now, the ISPs are justifying the bandwidth limits by stirring up the old "class warfare" feelings, telling you that it's not fair that the people who download lots and lots of files should be paying the same as you, when you only use your connection to do email and surf the web a bit. It's like the politicians who only want to raise taxes on "the rich" (and you find out too late that their definition of "rich" includes you, too). What they don't tell you is that raising the rates on these "bandwidth hogs" will not result in lower rates for you.

Bandwidth caps are already common in a handful of other countries, including Australia, Belgium, Canada and New Zealand. It's interesting to note that in Japan and South Korea, where super fast fiber access is commonplace, IPSs do not normally impose caps.

Those who advocate the caps say that ISPs already have "informal" or "hidden" caps anyway, and this just gets it out in the open. Indeed, Comcast Cable is well known for having "invisible" limits on their "unlimited" access plans. Many customers have reported that they have received warning letters when they downloaded large amounts of data, and that some have had their service cut off for "excessive use." This has been happening for the past several years.
Putting a lid on broadband use - CNET News.com

Apparently users were unable to even find out what the unwritten limits are in order to appropriately decrease their usage. Instead, the company said the actions were based on exceeding "average usage patterns." That could differ widely in different markets. Comcast said the policy only affects "the top 2 percent of the heaviest users" (again, this sounds a lot like the politicians who claim their tax increases will only affect the top 2 percent of income earners).

The big problem here is that what's considered "high bandwidth usage" today may well be just normal Internet usage tomorrow. The wave of the future is HDTV over IP - but will you be able to afford to download high quality movies and television programs with usage caps of 40 GB per month and less? One hour of HDTV equals about 7 GB of data, so if you downloaded four average movies (two hours) per month, you've already exceeded that 40 GB limit with another 16 GB in overage charges - and that doesn't count any of your web surfing, email, and other Internet applications. And it also doesn't count your spam - which, of course, counts against your bandwidth usage even though you don't want it.

Are there good reasons for ISPs to impose bandwidth limits on their users (other than the obvious goal of charging them more money)? Actually, in the case of cable - which is a shared medium - there are. Because there are a number of households (or businesses) connected to the same segment, one high usage customer on a node can slow down Internet access for his or her neighbors. DSL and FiOS connections, on the other hand, are dedicated connections - up to a point. Of course, ultimately all customers share the ISP's backbone.

But even for cable companies, some argue that imposing low bandwidth caps as Time Warner is doing defeats the entire purpose of high capacity broadband service in the first place. With cable companies now offering residential Internet service with speeds of 10-12 Mbps, it doesn't take long to reach those bandwidth caps. What's the point of having such service if you can't use it without paying overage charges?

Then there are other theories as to why the cable companies are the ISPs that seem to be most interested in invoking bandwidth caps. Brian Boyko wrote a very thought-provoking analysis of the trend theorizing that the motivation is not about network performance, or even about getting rid of the less profitable customers, as much as it is about limiting the amount of time people can spend on Internet activities in order to cause them to spend more time ... watching television:
Bandwidth Caps and The Cognitive SurplusNetwork Performance Blog, Network Performance Management News, Tutorials, Resources - Network Performance Blog

Whatever the motives, it seems pretty obvious that bandwidth limits are the direction in which the cable companies have decided to go. Will Verizon buck the trend and position itself as the major ISP that doesn't impose caps - thus endearing it to Internet power users? The official word from Verizon is "We don't have caps today and haven't announced any plans to have them." That seems to indicate that it could go either way.
Will FiOS Eventually See Caps, Per-Byte Billing? - Company tells me no plans today, but chooses their words carefully - dslreports.com

Tell us what you think. Do monthly bandwidth caps really do any good in terms of preserving performance? If not, why are the cable companies rushing to embrace them? Would you change ISPs if yours started setting limits on your "unlimited" Internet service? If limits are a good thing, what's a fair cap to set on $50/month service? Do cable companies have an ulterior motive in setting limits? Will the market force them to go back to the "all you can eat" plans or will the virtual monopoly on high speed access enjoyed by the cable companies in many markets mean they'll be able to force limits down customers' throats? Or do the majority of customers even care? Let us know your opinions and experiences at feedback@wxpnews.com.