Playing Broadband Monopoly: Watch Your Internet Costs!

As one of those survivals from the “Golden Age of Television” I remember when TV was actually free. What a concept! I am certain that there are a few out there who remember those heady days. Sure, you had to sit through mind-numbing commercials, usually breaking into a show or a movie at a point of great dramatic tension or highly revealing dialog, but that was a small price to pay for the entertainment and information we received from the networks that dominated the mass media and the independents that carved out local niches. 

Then Cable TV came along. I remember the sales pitch: For a small monthly fee, you can have commercial-free television! What’s more, because this was a service that you were paying for, there would be no more—or at least greatly reduced—FCC censorship. Imagine that! Of course, it didn’t take long for commercials to creep into the Cable TV world and soon, once broadcast was all but eliminated by Cable (and later, Satellite) TV, we found ourselves once again watching mind-numbing commercials on TV and paying a now not-so-small monthly fee for the privilege.

Next came the Internet. Dial-up service with number-of-hours-per-month packages quickly gave way to flat monthly which allowed you to dial in whenever you liked for as long as you liked without having to pay-per-minute. This kind of service eventually turned into the always-on connections that we take for granted today. In fact, it has been the freedom offered by this “always on” Internet experience that has led to the explosion in Internet use and the innovations that have improved the whole Internet experience. 

Apparently, the Internet has been a little too successful for the taste of some.

Consider the most recent striking dummy in the metered broadband fight, Time Warner Cable. They—and most of their fellow cable companies—are experimenting with metered, or tiered, broadband service. These companies, each essentially a monopoly within their service areas, are complaining about the broadband usage that their networks are seeing. The problem, they say, comes down to two factors: people who abuse the system with huge uploads and downloads, and the increasing popularity of movies, short videos and other bandwidth-intensive things. They say they need the money that would come from metered Internet use to offset the costs of improving their infrastructure to be able to keep up with the increased demand. This demand, said Time-Warner spokesman Alex Dudley is created by about 5% of the company’s Internet users who use a whopping 50% of the bandwidth. “Dudley said he did not know what the pricing tiers would be nor the download limits. He said the heavy users were likely using the network to download large amounts of video, most likely in high definition.” 

If this whole issue only went as far as charging a small group of bandwidth-hogs for all the extra bandwidth they use, I don’t think that anyone would have a problem with it. It only makes sense that the more you use of a limited commodity, the more you should pay for it. The problem is that this scheme, which involves multiple service tiers and bandwidth caps, is going to be applied across the board.

This raises some troubling questions, chief of which is why? Perhaps it is a simple exercise in monopoly power, perhaps it’s something more. They have to understand that “free” access to the Internet has become a kind of cultural “right.” We expect to pay a monthly fee—considered by most to be too expensive already—and the product we are buying is as much access to the Internet as we need. However, to say that there will be additional charges—or suspension of access in the case of Comcast—for exceeding some arbitrary level of usage is not reasonable. 

Consider the amount of advertising that you have to download today, the widespread use of graphics and animation, photos, flash and video, all to be downloaded whether you want them or not. Consider that your whole family has access and that everyone at your business has access as well. You can see how your bandwidth use can add up and before you know it, you are going to be charged for that extra usage. Like cell phone deals, you think you have made a reasonable choice for your usage and then you realize, once the bill has come in, just how wrong you were. So, you either cut back or you go up to the next plan level. Either way, you, the consumer, will not benefit.

So, who does benefit? The big cable companies like Time-Warner, AT&T, Cox and Comcast. They know that the Internet is becoming more and more video-oriented and with high-definition video taking more and more of the market share they want to get you used to paying more for it while the majority of people are still using little bandwidth. Why not? It worked with On Demand pay-per-view movies, didn’t it? The difference, however, is that with On Demand, you are getting something for your money that is real and immediate and you have a choice to spend that money. With the caps that come with these metered Internet plans, you have no choice. If your household or business goes over the allotted bandwidth of your plan, you pay and, considering their own low bandwidth rates, they rake in a huge profit. 

Of course, it is not only about money and the infrastructure to keep the service going. Look who is involved: Cable companies and a company—Time-Warner—that is actually in the movie business. People are downloading movies, bypassing cable and not paying nearly enough for the movies they download and share through person-to-person, or P2P, connections. Since the majority of the high-bandwidth users are sending and receiving full-length movies and TV shows, and that others are downloading these from subscription and other sites, you can see how these companies would want to get a piece of that action.

Again, if they concentrated on these people, no one would really mind. It would be easy to do: simply set the average customer’s regular bandwidth so high that it is, for all intents and purposes, unlimited. Then, publish that figure, provide a way for users to monitor their own bandwidth use and simply charge for when anyone exceeds that. That would concentrate the extra payments on the 5% who seem to be causing all the fuss. But the plans that are being tested in select markets around the country don’t do that. They target everyone for the express purpose of getting people used to thinking about paying for the Internet in a new, more expensive way. 

It’s good to have a monopoly on something (or, at least, a near monopoly), isn’t it?

There are those who say that it was the free aspect of the Internet that led to its development, and they are right. Entrepreneurs, businesses or all sizes, educational institutions and private citizens all over the world have made the Internet what it is today by taking advantage of unlimited access for a monthly fee. However, for these broadband companies to restrict access—the same process that worked so well for them when they promised commercial-free Cable TV—means that the development and improvement of the Internet will be hampered at best, that low-income people will have trouble accessing the Internet, which would make it harder for them to find work in today’s wired workplace; and that people will be discouraged to actually use the bandwidth they have signed up for. 

It will have another effect as well. It will move people away from the bundled telecom packages they have today back to a system where people will get TV from one vendor, Internet from another, phone from a third and so on. Ultimately, it will turn around on these companies. They don’t understand that people are going to get mad and they are going to find alternatives; and that entrepreneurs will find opportunities born from the companies’ own shortsightedness. Then maybe—just maybe—some of this monopoly power will fade.

Do not pass GO! Do not collect $200!