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 7GB 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, N.Y.; and Greensboro, N.C. Still unpriced is Time Warner's maximum available offering: 100GB 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, says it started similar trials Nov. 1 in Beaumont, Texas, and in Reno, offering between 20GB ($19.95) and 150GB ($65) per month depending on connection speed, with excess usage charged at $1 per gigabyte.
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