If you spend more time on the Net, you may be spending more money too

June 18th, 2008

1950s-pay-phone.jpgIn Hawaii right now, Verizon delivers DSL for $14.99, Qwest delivers DSL and wireless for $26.99, EarthLink delivers DSL and cable for $12.95, delivers DSL for $14.99, Road Runner delivers cable for $29.95, Adelphia delivers cable for $23.95, MediaCom delivers cable for $19.95 and Hughes delivers satellite and wireless for $59.99.  All of these guys provide unlimited monthly Internet service to local customers.

Watch out. Most cable companies have official or secret caps on the amount of data they allow subscribers to download every month.  Three of the country's largest internet providers are moving toward a new way to charge us for broadband - by imposing limits on our online accounts.

Time Warner Cable began a "trial" of "net metering" in a Beaumont, Texas, this month.  They want customers to sign up for "plans" that have limits and pay hefty surcharges when they exceed those limits.  Comcast said it would slow down the connections of its heaviest users in the markets of Chambersburg, Pennsylvania and Warrenton, Virginia.

Comcast continues to engage in “contact blocking” against its customers despite an investigation by the FCC and widespread public outrage over what it has been doing.  And AT&T said it would limit heavy users by basing prices on data volume.

Ben Scott, of the public interest group Free Press, says that the new strategy of the big providers reflects a decision to admit publicly what they have been doing secretly all along.  He adds that their new strategy will not provide the kind of relief that would result from larger investment in high-speed network.  Clearly, as national usage increases, we need a scaled up system, not scaled up prices overworking the existing system.

In Beaumont, Time Warner is “offering” plans with a 5 gig cap, a 20 gig cap and a 40 gig cap.  Prices run from $30 to $50.  If you exceed your cap, you get to pay $1 for each additional gig, so use it carefully.  An hour of TV quality video is about 200 megs, higher quality video 500 megs, and high definition is much more than that, say 5 gigs.  After one hour of high definition, the user with the 5 gig plan will be over his limit.

While these carriers want to return to a pre-1996 dial-up juke-box pay-phone standard of metered charges, most everyone you know is way beyond email and website surfing.  We, all of us, are using more bandwidth every day - video, movies, music, games, voice over and everything else.  Overall bandwidth use on the net is surging, doubling every year and a half.  The net is becoming a center of our culture and daily life.  Computers and TV are now finally coming together for the long-awaited convergence.

This new throwback pricing scheme runs counter to that trend, and to what we have come to love about the Net, its openness and vitality.  It is a huge step backward.  Just when we thought we were all on the road to a new world of Net nirvana, the change these guys want is a complete bummer.  Instead of surfing new heights of Internet delight, we will be tied down by this electronic ceiling.  It will be a constant psychological barrier on use and experimentation, one which will cast a shadow on every moment of our Net experience.

They tell us that net metering is the "fair" way to ensure access for "all" users.  Why does that sound so fishy?  I suggest they've noticed this sweeping trend to greater public use, and they want to cash in on it.  Time Warner, the parent of our own Oceanic Cable that provides Roadrunner to so many of us, is leading the charge, pun intended, and our days of Net freedom may be numbered.  Today Beaumont; tomorrow Hawaii.

Hawaii is sitting pretty for this kind of pricing scheme.  You need to vote to vote with your feet on this, to get off your duff, watch what happens and be prepared to go over to the competition without looking back.  That's why the smart thing may be to squawk about it now, before we get sucked into our own “trial” and a whirlpool of escalating prices.

Why not write to Oceanic at oceanic.com and tell them that we don't want no stinken usage based fees here, that we love the openness and global exchange of the Net, that their escalation plan flies in the face of the global trend, and that we know very well that they're doing this only to make more money.

Nationally, the stakes and the resources in play are huge.  In Hawaii, the market is hundreds of millions.  Do the math.  We could wind up paying more, much more.  We can’t afford to be complacent.  Once the sliding scale begins, it's so easy for them to migrate the data limits down and the charges and penalties up, hoping no one will notice.  We should notice.  We should tell them that if they want to raise the monthly price of broadband here, they’ll have to pay a price in market share, and that we and the PUC will be watching.

Things are also happening in Congress.  The push for net neutrality protection against content blocking has led to several bills.  The "Internet Freedom Preservation Act" co-sponsored by Rep. Ed Markey (D-MA) would amend the Communications Act of 1934 to codify open access to the Internet. The "Internet Freedom and Nondiscrimination Act" introduced by House Judiciary Chairman John Conyers (D-MI) would use antitrust regulations to prevent the price discrimination inherent in forcing some customers to pay more for higher bandwidth.

We should ask our delegation to support these two bills.  Failing that, maybe we should go out and buy Time Warner stock (symbol TMW) and vote against management to make the point.  As a last ditch effort, perhaps we should move to the mainland and sign up with the competition, assuming there are some other carriers out there who decide not to go along for the ride.

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