My take on ISP volume caps and surcharges

June 19, 2008 – 10:45 am

Both Keen and Tobold have opposing views on the recently hot e-topic, ISP volume caps and surcharges.

To quickly bring you up to speed, some major US Internet Service Providers (ISPs) want to introduce a pay-as-you-go method for their customers’ Internet usage. They want to introduce several tiered volume packages (e.g., xxGB/month) and charge you extra for going over your allowed quota (e.g., $xx/GB).

In that trial, new customers can buy plans with a 5-gigabyte cap, a 20-gigabyte cap or a 40-gigabyte cap. Prices for those plans range from $30 to $50. Above the cap, customers pay $1 a gigabyte. Plans with higher caps come with faster service.

In case you haven’t seen this, here’s an estimate of what 1GB gets you these days:

View 26,000 Web pages OR

Send 105,000 e-mails OR

Attach over 2,000 Microsoft Word documents (of about 10 pages each) OR

Receive up to 1,000 digital photos OR

Download more than 200 songs OR

Stream 18 hours of music from the Web OR

Download 1.5 movies (or 2/3 of a movie in High Definition) OR

Play games online for 240 hours (or 10 days)

Keen is pretty pissed off by this because he has several gaming consoles and PCs hooked up to the Internet. Any reader of his site knows he’s a gaming junkie and in the beta for AoC alone, he was downloading 32GB every other week for client updates. Completely legit - and he’d pay a mint for it under this new model.

Tobold on the other hand thinks it’s unfair that 5% of AT&T’s customers are using nearly 50% of their total bandwidth. He argues that many of these hardcores are being undercharged for pirating stuff over P2P/torrent sites and the remaining 95% are being overcharged. (Note: His original piece has been deleted because it caused quite a backlash in the comments section, some of which he found very offensive. I wish he would have left it up and simply disabled comments but people on the Internet can be quite nasty if you actually take them seriously - so I don’t really blame him.)

Here’s where I stand:

One would think the status quo makes pretty good sense from a purely business perspective. Sure, you might be undercharging 5% of your users, but you’re balancing that out by overcharging the remaining 95%. At the end of the day, you’re exploiting these under-users to make some good coin! And they’ve been doing it for years. Are we to think that AT&T, a publicly-traded company just trying to make a buck, has altruistic motives? Have they realized the moral error of their ways? Are they trying to finally be fair with that 95%?

I don’t think so. If that were the case, they would simply give their low-bandwidth users a rebate, while charging their hardcores the same amount. But hey, they’d be losing money that way! Instead, we’re going to surcharge those hardcores up the *** for overuse!

Also, their new trial still screws over the under-users… 5GB cap for $30 or 40GB cap for $50. Basically, the low-bandwidth customer gets 1/8 of the bandwidth for 3/5 of the cost compared to a high-bandwidth user. Overcharges will lessen that gap but only if they become a factor and we’re used to seeing volume discounts, but that’s still a pretty bad deal for the under-user and a sweet deal for the over-user.

And don’t think that all hardcore users cashing in their GBs for illegal content. Just because there are some bad apples, it doesn’t mean you should generalize the entire lot of them. If you did a comparison of illegal P2P/BT vs. legitimate pron downloading, I think you’d be surprised at how close they are. I’d wager teh pron actually wins out in terms of total bandwidth sucked up.

Plus, ISPs already have tools in place to deal with the P2P and Bit Torrent crowd. It’s called Bandwidth Throttling. That’s a whole other can of worms, that I won’t get into here, but it basically means the ISP can limit the speed at which you can download “shady” content. Download regular webpages, sure, here’s a 5MB/s connection. Ooooh, you’re on PirateBay… Sorry chum, you’re getting zapped down to 256KB/s.

Let’s take a step back and forget about the hardcore and softcore Internet users for a moment (no pun intended). How are companies like Apple (iTunes, Apple TV) and Microsoft (Xbox, Windows Update) going to take this? What about online gaming platforms like Steam? Major online gaming outlets like EA, Blizzard, and Funcom? Even the major TV networks?

AT&T wants to implement a pricing structure that goes against something they’ve been working towards for many years: Digital Distribution.

A high-definition episode of “Survivor” on CBS.com can use up to a gigabyte, and a DVD-quality movie through Netflix’s new online service can eat up about five gigabytes. One Netflix download alone, in fact, could bring a user to the limit on the cheapest plan in Time Warner’s trial in Beaumont.

And you don’t even need to be hitting your monthly quota for this to have an affect:

“As soon as you put serious uncertainty as to cost on the table, people’s feeling of freedom to predict cost dries up and so does innovation and trying new applications,” Vint Cerf, the chief Internet evangelist for Google who is often called the “father of the Internet,” said in an e-mail message.

Now, I don’t want to sound purely negative here. There is, if you try to think WAY outside the box, a potential silver lining to this and Vint hints at it in the above quote. Innovation.

As the price of gasoline has skyrocketed, more and more people have been searching for ways to get better mileage and reduce their dependency on oil. Biofuels. Electricity. Wind power. Solar Energy. Lighter construction materials. More fuel-efficient engines. I remember when there was no such thing as an MP3 and all audio was in the form of uncompressed WAVs. This new compression algorithm gives you a file 1/10 the size of a native CD audio track with little loss in quality. Ironically, MP3s were developed through a collaboration of AT&T and several other partners!

Now, I’m no expert on compression, but I think it’s fair to say that in the world of innovation, very little is impossible. It may not be possible today with current technology, but a major shift in the way Americans are charged for their Internet usage may just spark new research and development in this area. This may eventually give us DvD-quality video at a fraction of what we can get today with DivX. It may shrink our MP3s even further. Maybe there are new ways to code video games that will do away with the multiple-GB clients and patches.

Before, there may not have been a need for such a thing, so it wasn’t really sought after. If the world over adopts a new way to charge its customers for Internet usage, I’d wager it gets bumped way up the priority list.

I will end this rant with two comments for you to ponder:

“The definitions of low and high usage today are meaningless, because the Internet’s going to grow, and nothing’s going to stop that,” said Eric Klinker, the chief technology officer of BitTorrent.

As the technology company Cisco put it in a recent report, “today’s ‘bandwidth hog’ is tomorrow’s average user.”

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Post tags: opinions

22 Responses to “My take on ISP volume caps and surcharges”
There is zero silver lining here. They’re simply looking for excuses to charge us more. Punish the 95% because of the 5%… does anyone REALLY buy into that? I know Tobold did, but look where that went.

This is one of those topics that I refuse to find a positive for the sake of presenting a balanced argument.

I hope Microsoft and the Digital Media Distribution groups step in and flex some muscle here to put a stop to this B.S. immediately.

By Keen on Jun 19, 2008
This is right up there with browsers refusing to show sites that don’t pay the browser.

Negative, Ghost Rider. Pattern Denied.

By Bo on Jun 19, 2008
it’s not just to digital distributions, but this is going to hurt google’s pocket as well, who is going to click on that extra ad when they know it’s counting toward them. same for websites who rely on adds to stay afloat. youtube would go down the drain

and the fact that right now cable carriers in the united states have monopolies in regions of the country, we have no competition for prices or service for internet service

if they have something like this introduced, they will have to give consumer choices

it’s sad that cellphones now have 99 dollar unlimited plans,20-40 dollar unlimited data plans.. but instead they want to charge “per minute” like schemes for the internet! ha!

By voiceofid on Jun 19, 2008
Great points Id!

If you piss off Google, I think it’s a pretty big mistake. It will be interesting to see what kind of power struggles emerge from this.

Competition does indeed make for a healthy consumer marketplace, so I hope we see alternatives creep up as a result of this.

I don’t blame a company for wanting to make a buck. I, like Tobold, am a capitalist (SoCap to be precise), but I don’t think price gouging is fair game.

By Snafzg on Jun 19, 2008
@Keen - I definitely don’t think this is a way we should be going and I don’t support it in the least. I was merely trying to point out that conflict like this can drive innovation.

To be honest,I would hope for this innovation to continue regardless of pressures like this.

@Bo - This is Maverick, requesting a fly-by!

By Snafzg on Jun 19, 2008
I will be surprised if it is even possible to implement a system like this. What is to stop an outside user from streaming udp packets at some random Comcast IP and using up all of the bandwidth (an ol DoS)? State tracking on stateless protocols is not trivial.

By Werit on Jun 19, 2008
Stop to consider the malicious consequences of this course.

Browser Hijackers sending people’s browsers to high content porn sites that take a large chunk out of their usable bandwidth.

Adware or other popups are now directly stealing from the customers of internet providers.

Anyone rememeber what a zombie is? Think you’ll enjoy finding out your computer has been sending e-mails you had no idea it was doing but has managed to quadruple your monthly internet bill?

Watch this go into plan and then watch for the massive class action lawsuit that immediately follows when the “Pop Blockers, Spam Filters and Virus Protection” don’t provide adequate protection. They USED to be just an annoyance. With this implemented they would become something that effected your pocket book.

With my cellphone I expect my cell phone company to not allow people who don’t have direct access to my phone to use my phone. How would you like it if every time you called a buddy there was an advertisement popping up and forcing you to either hang up the phone or sit through it so you could talk to your friend?

There would be lawsuits from E-commerce companies as well as “free” providers of internet services. Everything that makes internet websites run is based on advertisement. It’s the same thing as your television. How would you like it if the cable companies did this exact setup with your T.V.? Would you have to turn your T.V. off during commercials? What happens when your watching a show, your wife is watching a show, your 2 kids are watching their own shows.. and you all sit through a 5 minute commercial? BAM you just lost 20minutes of your alloted time for the month due to something you have no interest in and no real control over.

.. and to that my friends I say… Poopy.

By Bo on Jun 19, 2008
@Bo / Werit - Wow… I hadn’t enough thought of that! Great comments!

By Snafzg on Jun 19, 2008
As an interesting afterthought…

You pay $59.99 to buy a game online and download it. Your going to have to pay HOW much to actually download it after you buy the rights to download it?

You have the game downloaded. Its basically a beta copy of the game. It needs to be patched to the full retail version because there is a lag between the time the game is actually produced and when the game is released. This patch is 300megs… however, all games now use a Bit Torrent style system. Its bad enough that they use YOU to host their patches but now… does this effect upload as well as download bandwidth used? Am I paying to download the patch but paying even MORE because to download it I have to upload to others as well during this time?

What about the 100 different programs currently on my computer that check for updates on start up? or Windows who will download patches when it needs to.

I think my wallet just spontaneously combusted….

By Bo on Jun 19, 2008
I ditto Bo’s comments….and poopy.

By silo on Jun 19, 2008
Feeling slightly paranoid today? Maybe you should have actually read the list what 1 GB of volume buys you. Like 200 songs or 240 hours of playing WAR. Multiply with 40 and you get 8000 songs, or 9600 hours of WAR. How could you possibly use more than that?

Age of Conan only used lots of GB because the 13 GB client download was broken for most people, so it had to be downloaded and repaired several times. Downloading the WAR beta client would have only used a small fraction of your 40 GB allowance. Windows automatic downloaded patches are measured in kB, not GB.

I challenge you all to install some sort of meter measuring your bandwith usage, run it for 1 month without doing any illegal filesharing, and come back here to say how much you used. I bet its even less than 20 GB.

By Tobold on Jun 19, 2008
Hey Tobold! Not sure if you were responding to the original post or one of the comments above, but here’s my response:

My personal usage is actually pretty darn low legally AND illegally. I’d say I’m far below 20GB on both counts combined (pron included!), but that doesn’t mean I don’t see the potential problems with this scenario.

If my RL priorities were different, I could see myself easily gobbling up 40GB+ per month in usage. I also believe this is really stifling for the convenience of digital distribution.

I haven’t entirely bought into Blu-Ray because I think the next generation will be directly-downloaded cinema. Not like Pay-Per-View, but an online Blockbuster or Netflix where you pay your rental fee and are able to download your movie for X days. The same goes for purchasable movies and I think console games will eventually go this way too.

By Snafzg on Jun 19, 2008
I’m all for fair game. If you wouldn’t mind pointing out a piece of bandwidth usage monitoring software I’ll run it. I don’t do any illegal file sharing. I have tons of music but its all purchased.

I’m not very worried about my current usage being above a decent limit. My concern is charging people for things that they don’t have control over.

It one reason I have an unlimited text plan instead of the 100 I probably use a month. I can’t stop other people from sending me text messages and I’m going to be charged for them.

As the internet matures these little pieces of it we have no control over are getting worse not better. I see more advertisement each time I log onto the internet and they keep getting more and more complex.

I’m actually very proud of my T.V. example Although its not exactly the same. If they charged you for internet usage by the minute like the Dial-up of old I would object strongly.

I honestly can’t say I’m 100% against this plan for internet usage. It has its merits. I don’t like having to pay $70 for an internet connection I don’t really use except for gaming and a couple iTunes sprees a month. It would be nice to be able to pay less. I do however believe the downsides of a plan should be thought about very seriously before I latch onto the things I would enjoy.

Also, ask my family and girlfriend. I don’t have a side in an argument. My side is the opposite of whoever I may be talking to at the moment

By Bo on Jun 19, 2008
Sorry new things keep popping into my head.

Since the main reason for this seems to be illegal download. What is going to stop the people who already doing something illegal from simply getting better at stealing their neighbors internet connection? or the poor poor local Starbucks….

By Bo on Jun 19, 2008
what bo said also just reminded me about those people who steals other people’s wireless internet

when i used to sell for a cellphone company, i would ask how the customer use their wireless internet when they are not at home, and 70% of them said they steal the internet from wherever they could find it (the other 30% said from a mickyd or other wifi hotspot)

By voiceofid on Jun 19, 2008
Also, to be fair to Tobold, because he does have a very valid point and shouldn’t be the only defending the plan.

My cable bill is currently $110 a month. $70 of that is purely for my internet connection.

Given the above pricing format (or atleat what I can assume from it):

$50 - 40G plan
$20 - 20G of overuse
————————-
$70 - 60G of usage

I am EVER using NEAR 60G a month? I really couldn’t see it. I doubt even on my best free porn binge am I going to hit that. This plan really would save me money most likely. I just consider some of the things brougth up in these comments if they implement this. I hope there is some protection, at the very minimum, against unauthorized usage (although I do not use wireless at home). I also hope they set up their anti-spam/popup software that most providers provide with their service.

By Bo on Jun 19, 2008
Just to address the illegal bit. ISPs are quite capable of metering (throttling) your bandwidth on such sites. A 700MB DivX movie is still going to be 700MB, but at least they can regulate the speed at which you get it, making it unappealing for some to even bother with. This also allows them to streamline their network’s overall performance rather than having to deal with a number of high speed + large file size spikes.

By Snafzg on Jun 19, 2008
Don’t think for a minute that you would still be paying the same amount of money for a connection that you have right now, Bo. Looking at the proposed plans that companies have brought forth the prices are incredibly higher for slower connections with lower bandwidth. IF this went in you would be paying more than you are now, for the same connection, and LIMITED use.

And it’s not just about “how many of you would actually use all that bandwidth”. At this point in time, in the United States, just the IDEA of being screwed by these companies like this is enough to take a stand.

By Keen on Jun 19, 2008
Hey guys I can feel for you all, but this is already the Internet model used in Australia be our national carrier Telstra. Heres an exmaple, currently broadband is suplied to 90% of the population but only covers about 10% of the landmass, so if you live outside of a major city, tough luck you can only get dial-up. A new technology has just been released here that utilises Telstra Next-G network but again Mobile networks only cover about 35% of the country. A 1GB plan will cost you close to $90 Australian or about US$86 on this Network. Once over this you then pay 50c per MB extra. If you live in the city a 1GB plan will cost you about AU$40-$50. I use the mobile option because I live in the bush but close enough that I can get mobile service, all be it 2 to 3 bars.
I must say though that while for us a deal like that would be heaven, I would be mightly pissed off if they increased just so they can increase there profit margin.

Cheers, Rom

By Romanus on Jun 20, 2008
Ouch! I feel for ya Rom! Thanks for spending 1% of your monthly quota leaving that comment!!!

By Snafzg on Jun 20, 2008
This is a great discussion which I have linked to here:

http://mmomadness.blogspot.com/2008/06/internet-bandwidth-plans.html

Please check it out Greenies!

Awesome blog greenskin fella!

By Raegn on Jun 21, 2008
After Tobold posted re: this topic I tried to find out how much bandwidth my family had consumed. I play WoW A LOT. At least 2-3 hours every single night. I know that’s not much, but on weekends I’m going to play more. One lazy weekend I started playing WoW when I got up around 8am and I was still playing at midnight that night. I got up around 8am on Sunday morning and got straight back into it and probably played for another 12-14 hours Sunday as well. Meanwhile my wife has been watching Netflix movies online, and catching the latest Dr. Who and Torchwood episodes on Youtube, plus Lord knows what else. My kids hit Noggin.com to watch the shows and play the games there. What I’m saying is we’re the average 21st Century Internet-age family, perhaps less than average because my kids are 3 & 8, not teenagers who’d otherwise be hitting Youtube, Myspace, Facebook, etc.

Knowing that if both AT&T and Time Warner Cable are running these tests that implementation of the same is not far behind, as I said, I wanted to know how much bandwidth we’d been consuming. I couldn’t find that information online. My router didn’t track our traffiic. The CSRs at TWC were useless and it took almost an hour before I finally got to speak to someone who understood exactly what information I was seeking. Almost everyone I spoke to was happy to quote the Upload and Download speeds for my broadband package, but total bandwidth consumption? No dice.

After almost an hour I was transferred to a guy with a Hispanic accent, which told me I was speaking to a local (I live in Los Angeles). He confirmed that TWC are indeed running these tests in Beaumont, TX, and he said he’d received emails, at work, from TWC, telling them to prepare for the same. What he couldn’t tell me (couldn’t, not wouldn’t) because he didn’t have access to that information was how much bandwidth I’d used.

I’m sure my family uses well over 5Gb of bandwidth each month. I doubt we consume 40Gb, but if my Cable Company wants me to choose a package where I’m allotted a certain amount of bandwidth and charged if I go over, then they should be obligated to provide me with my personal usage for the last few months so I can make an informed decision as to which package to choose.

After my local boy told me he was unable to provide me with the information I needed I hung up and sent them an email. Their response?

“The bandwidth caps are simply a test run in one city in Texas. They do not affect anything in California, and as such, we do not have access to any of that information.”

Sure. Just a test. Riiiiight. Does anyone have any beach-front property in Utah to sell me? I’m feeling particularly gullible right now.

By Capn John on Jun 24, 2008