Archive for September 5th, 2008

Metered Broadband In US Market

Published by Babar Bhatti on September 5, 2008 under Broadband Internet, Business, Companies, Consumer Rights, Digital Divide, Telecommunications

We are used to seeing the “caps” on broadband usage in Pakistan. Internet providers limit bandwidth to a cap of say 2GB. Consumers have to pay for any usage over the imposed limit. Based on the comments here and at other forums, it is obvious that Pakistani consumers often do not like these metered plans - who wants to worry about keeping track of your bandwidth all the time? When talking about broadband issues we often look up to other developed countries with low unit cost of bandwidth.

But alarmingly, similar restrictive price models are being introduced in the US. One of the large cable companies, Comcast has introduced this concept recently and it has not been received well by consumers and in particular, technical bloggers. Mind you the limit imposed by Comcast is 250GB which is a huge number when you compare it with the situation in Pakistan. However for the people who are used to unlimited broadband access it can be a problem. Consumers of high def videos are one set of users who can gobble up this kind of bandwidth very quickly. File sharing is another one. I’ll leave you with the reaction of blogger Om Malik:

Comcast will institute a 250 GB cap on its broadband connections starting Oct. 1. Expect other carriers to follow suit and make tiered broadband a reality. Much as I would like to think otherwise, this is the end of the Internet as we know it.

The caps are a move to ensure that the gouging scheme put in place by Comcast and other cable providers stays intact and they can continue to sell their video-on-demand services. It was a point I made when I wrote, Why Tiered Broadband Is The Enemy of Innovation. I will say this again: this is to stymie services like Hulu, NetFlix and Amazon On-Demand.