Internet by the pound: pricing scheme of the future?


As a writer, I am a bandwidth hog. Even with high-speed cable access, at peak times (usually right after school lets out in my neighborhood) my service lags. Not surprisingly, Internet service providers are chaffing at the model currently in use in which someone like me pays the same monthly amount as a neighbor who only uses it to check e-mail. Now some vendors are beginning to test a new scheme, in which users pay for the overall quantity of bandwidth they use in a month, much like households once paid for coal. The more things change...

The move comes at a time when the overall access load on the Internet is booming, thanks to on-demand video and other streaming content, and the rapid segue of business services this medium. The Minnesota Internet Traffic Studies estimates that by the end of 2007, traffic on the Internet reached 3-5,000 petabytes per month (one petabyte equals five million gigabytes).

Time Warner is currently testing a program, according to the Chicago Tribune, that charges users based on the number of gigabytes used per month. The cheapest plan, $29.95 per month, allows 5 GB of traffic, enough to watch four or five movies, while the top option allows 40 GB for $54.90. Another idea being floated in the industry is to charge extra for large downloads.

I expect to see more of this pricing in the near future, since the lowly Internet service provider has so far been marginalized in the revenue stream, while content providers such as Netflix and Rhapsody hog bandwidth to sell streaming entertainment delivered through the ISP's pipes. I also expect to see more differential prices of public networks such as in coffee houses, with low-bandwidth use continuing to be free but higher use levels bringing a charge.

One piece of information for which you won't have to pay for, though, is this: "There ain't no such thing as a free lunch."