Filtered Geek

A while back, Time Warner Cable (TWC) tried to implement metered internet pricing... It failed after public outcry, well it seems that those ISPs will try again soon. First a little back story, Metered internet is not a new thing. AOL did it back in the 90's when everyone had dial up, and you got a AOL disk with your morning paper every day. Then along came broadband, for one flat rate, you could have as much internet as you wanted.

The basis for metered internet from the view point of the ISPs is simple, since the FCC has backed Net Neutrality (FAQ on NN from PCWorld), ISPs can't discriminate from data going across the internet. This means, that your Skype call, YouTube video, Online game, and web page all have to be treated equally when it comes to getting you your data. This is a generally looked at as a good thing for the internet as a whole because people don't have to pay for "premium internet" as it were.

So Why Are the ISPs Mad?

Well think of your ISP, you more than likely have a choice of 1 cable company (TWC, Comcast, etc) and maybe if you are lucky, 1 DSL provider (AT&T, Verizion, etc). Most cites have 1 cable company because in general city governments allow the monopolization of cable providers, plus the FCC still views cable as a "growing" market, so they have more protection than the phone lines coming into your house. Whereas you may have multiple DSL providers, because of the 1996 Telecommunications Act which required local phone markets to be opened for anyone to use.

Well guess who is throwing up the latest stink in terms of metered pricing, AT&T and TWC. AT&T has both DSL and to a more limited market, UVerse, which is a lesser form of Fiber Optic which is made to compete with both TWC and Verizion's FIOS. The company's claim that because they can no longer block people from using tons of bandwidth, that they will have to charge per byte to make things fair. They claim that their costs will be to high if they don't provide caps.

For the most part, ISPs have no increased cost associated with bandwidth increases. Because of the monopolies that ISPs had for so long, they could afford to not expand their network, because of no competition. Now that people demand more from their internet, ISPs need to continue to expand their networks to keep up with demand, yes this costs money, but it is long overdue. However when a ISP claims that they need to increase rates because of their backend costs like increased bandwidth, don't believe them at face value. For 1, a good chunk of internet traffic is "peer 2 peer" based, where the ISPs need to do nothing but allow traffic to pass thru their pipes. Second, look at other countries like Japan they have way better internet and at much less cost than us, why? Because of competition.

But the biggest reason they are scared of people using more bandwidth and cry foul, is that The internet competes with their premium business models!

Think about it for a moment. You probably pay upwards of $100 a month for some kind of TV, Phone, and Internet package right? Is your phone that fancy Digital Phone service? Yep... that's VOIP the same as Skype which I talked about in a past article. Skype is $36 a year, vs around $40 a month for the cable company's digital phone that's $484 a year you are giving to the cable company for something the internet can give you for a fraction of the price! And TV, other than the HD (which is starting to become more widely available online) you can get almost all the same programs online for free! Hulu, Netflix, and other online companies offer either free, or low cost options that replace almost all of your TV you get from the cable company over your internet connection.

No wonder why the ISPs are worried about people using a lot of bandwidth, all of their premium services are rendered useless by using the internet. ISP's and cable company's are starting to become like the electric company, offering a "dumb" pipe of bandwidth and they are afraid of that.