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Metered Bandwidth = Bad Idea

June 3, 2008 by 13 Comments

Time-Warner is testing out a new ISP pricing schema in Beaumont TX whereas people would be given a monthly data usage cap between 5 and 40GB. Anything over that amount and the customer is charged $1 per GB.

This has “bad idea” written all over it because it restricts customers as to what they can do on the internet. With the advent of video-intensive (and thereby bandwidth-intensive) services like internet television and the like, putting a cap on people’s bandwidth does nothing but get in the way.

TW, if you happen to read this, here’s my suggestion: Give people the option of whether they want this or not. Price the “capped” plans lower than the regular non-capped plans and people will go for it. You know this would work. If you completely switch over the pricing schema to metered-only you’ll not only have customers but businesses going after your throats.

Going 100% metered is short-term gain, long-term loss. Don’t do it.

[Source: washingtonpost.com]

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  • In Canada, at least in Ontario, Rogers Communications…our largest ISP has already implemented a similar policy. Under my current plan I am allowed 60Gb of bandwidth and must pay $1.50/Gb (I think)for if I go over…to a maximum of $25 more. Knowing I will easily exceed this, I’ve already accepted the fact that my monthly Internet will go from $45 to $70/month. I will also note that they base usage on both downstream AND upstream so it’s not really even 60Gb worth of downloads.

    Having said that, I must say that our Government is being pretty smart about the whole ‘Net Neutrality, traffic shapping and bandwidth issue. The CRTC (Canada’s equivelant to the FCC I believe) is forcing Bell Canada, our largest Telco and 2nd largest ISP to “prove” network congestion is an issue and that traffic shaping in needed. Story here http://www.theglobeandmail.com/servlet/story/RTGAM.20080516.wrthrottle16/BNStory/Technology/home

    It’s the reality of the world we live in. Greed is the way it is and the little guy will always be the one to pay the price…in this case, literally.

  • Fishy

    I live in Belgium, one of the worst countries for internet. Here, every ISP has metered bandwith. Standard, you get around 10-12 GB (budget plans give 1 GB, enthousiast plans give a lot more). If you cross that, you can choose to pay more, or continue with smallband for free.

    Nobody really likes this, and the goverment wants to do away with this policy.

  • lespaul20

    This seems backwards from what the rest of the communications industry is or apparently was doing. Unlimited internet was a major selling point when I was still on dial-up. I really doubt there is good reason for it as I can’t see cost being a good reason. Hopefully the market will speak and let them know that this is stupid.

    • Sometimes I wonder if it’s an indicator that the network infrastructure of the ISPs can’t handle as many customers as once thought? Or is it just outright corporate greed? One can never be sure I suppose.

      At least back in the dial-up days there were “mom’n’pop” ISPs, i.e. locals. You had more choice, no question (and some were unlimited access.)

  • Simon

    Metered internet is the business model for Australia. This is a terrible plan, as it really does limit high end stuff like internet tv, steam™ and game streams and the like. I only pray that one day we will lose this stupid, money grabbing idea. If its being implimented in the states, then good luck to you, for its really a step backwards

  • Ben

    It’s been like this for many years here in Australia… well always really. I have a 40gig plan on ADSL 8mbit (8mbit down, 0.5mbit up). Even the “unlimited” plans here have limits or “Acceptable Use Agreements”, which have various conditions (from top 10% of users to just what they consider hogs).

    It’s all about profit, the less people download and the more they pay the better for their profit margins. Such is life though… we are use to it. Then again all the MMO games have servers in the USA and don’t see us as a sizeable market to give us our own (not even 1 server, yay).

    Good luck fighting it guys, eventually you’ll find the unlimited plans disappear as has happened here over the years (there was some at one time).

  • DataKnight

    This is what my ISP here in the UK does and I’m happy enough with it. I dont download films because I have no need to. I watch a certain amount of streamed TV but again limit my viewing. I have a 10gb capped service for £13.99/month and extra capacity costs £1.00/Gb if they charge me (which mostly they haven’t).

  • Branhams

    At first glance Metered Bandwidth looks like a terrible idea. However, Metered Bandwidth is a great idea.

    Only a small percentage of the broadband users require 40 GB of usage per month. The people who use more throttle the speeds of their neighbors and cause the ISP to raise rates when they have to expand infrastructure. I’d personally rather have people sharing movies and music pay the cost than have my rates go up another ten bucks a month.

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  • Smiling Carcass

    I live in the UK and have unlimited 8mbit (just this week upgraded from 2mbit) adsl with virgin media. This is ‘unlimited’ but with an ‘acceptable use policy’. (Con #1) I don’t really monitor my bandwidth, but have never had a warning letter. I believe if your usage goes up above their ‘acceptable’ limit, they throttle you down for four hours or so.
    The next issue (Con #2) is why, if you are offering all these high speed connections, do you expect us not to take advantage of it? I mean, you wouldn’t go to the butcher for three pork chops if he said ‘Have one now, one next week and one the week after. If you take them all now, I’ll have to charge you £I extra for each one.’
    My next issue (Con #3) is why are you offering these streaming TV shows, asking if we want online video rental etc if we use them and you’re going to say we use too it too much?
    Next, (Con #4), we are told capping and ‘acceptable use’ is to give everybody fair access to the service. Really it is because they are offering the high bandwidth before they have the infrastructure to handle it. Talk here in the UK suggests it won’t be long before we can access speeds of 100mbits. What’s the point if you can’t handle 8mbits?
    Finally (Con #5) they have dangled the carrot, free ‘phone calls and 8mbit downloads for £14.99 a month’. And now they have us on the hook, along comes the stick- use too much and we’ll set limits for your bundle and charge for ‘overuse’ of what we said you can have.

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  • AR

    Welcome to Australia, although $1 extra for a gigabyte? Thats VERY generous compared to some ISPs in Australia, although most speed limited when you’re “capped”, there are still a few who charge you. Big time.
    Bigpond charges you $0.15 for each MEGABYTE you go over. Thats $153.60 per 1GB.

    Consider yourselves lucky.