Cable’s Pay-Per-Byte Plan Finds a Foe in Congress
by Peter Kafka
Posted on April 8, 2009 at 5:05 AM PT
A New York congressman has a message for cable companies that want drop their all-you-can-eat broadband Internet plans: Don’t even think about it.
That instruction comes from Rep. Eric Massa, a Democrat who represents the Rochester area, and it’s aimed specifically at Time Warner Cable (TWC), which is starting to experiment with broadband “caps” in Massa’s hometown. Rabble-rousing quote: “Just at a time when access to information is driving our economic recovery, Time Warner is moving to stagnate the 21st Century technology needed to rebuild America.”
But any of the big Internet pipe players contemplating charging their users on a per-use basis–and most of them are–can expect to get similar blowback from lawmakers. It’s a no-brainer: Consumers now expect to be able to use as much data as they want. And the cable guys–or the phone guys, in the markets where AT&T (T) and Verizon (VZ) are offering Internet service–are easy political targets.
That’s a problem for the cable/phone guys, who want to use the caps to manage the boom in Web video. Their spin: They need the caps to make sure that power users who are consuming hours of movies, TV shows, etc., via their PCs shoulder an appropriate bill for the bandwidth they use. The cynics among us think the plan is designed to discourage people from ditching their cable TV service in favor of Netflix (NFLX) on-demand, Hulu and TV downloads from Apple’s (AAPL) iTunes.
The cable guys are aware of the brewing backlash. At the industry’s annual convention last week, they were musing openly about better ways to sell their plans: Not as “caps” on use, for instance, but as “additional levels of service.” That’s going to take some awfully persuasive campaigning, and that’s not the kind of thing monopolists excel at.
But perhaps they can just use this “Simpsons” clip to make their case:
Comments
Using caps to “manage” Web video is a euphemism. The true objective is to “strangle” it the cradle.
ISPs argue that the government should not interfere with the sanctity of free market forces. As for the $7 billion in grants that the Obama Administration is going to give them expand broadband service…well, that’s a patriotic duty they will undertake in order to help the U. S. be more competitive in a World economy. That’s different, see?
BTW, although the Wall Street Journal editorial staff does not seem to realize it, Net Neutrality will be essential to your own future. Without it, ISPs could charge more for your videos (and other content) than they might for content from their own websites or sites that pay them an extra fee.
Not only is metered pricing a Red Herring, it will relegate U.S. Internet service to second-class status and thereby damage our ability to compete against other countries in the future.
http://www.insidedigitalmedia.com
Posted by Phil Leigh at April 8th, 2009 at 7:39 am