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Why your Internet service provider wants to nix all-you-can-eat data buffets

Robert Strohmeyer | Oct. 18, 2013
As the industry moves toward 'metered' broadband plans, hardcore users will feel the hurt.

The next time you're snuggled up in bed for a marathon viewing of Breaking Bad or House of Cards, an extra set of eyes may be watching you, counting the bits of data that stream to your TV—and soon they could be charging you extra for all that streaming video.

This is no mere dystopian fantasy: If you're a data-heavy user fond of Netflix, Pandora, and YouTube, chances are good that your bit-gobbling ways are coming under increasing scrutiny from your Internet service provider, and in the near future you may find yourself paying a premium for all those massive downloads and data streams.

Earlier this month, Comcast expanded market trials of its "metered" broadband plans, and analysts say it's only a matter of time before all U.S. carriers join their European counterparts in charging heavy data users a premium for their consumption. In essence, your Internet use will be treated like your electricity or water use: You'll begin paying for exactly what you use, and "all you can eat" plans will disappear.

Over the past few years, AT&T, Comcast, and Time Warner have experimented with data caps and broadband metering to some extent. Time Warner kicked off the trend with an attempt in 2009 to cap customers at 5GB per month in exchange for a $5 rate cut, and was soundly rebuked by the marketplace.

Comcast has since experimented with a similar plan on an opt-in basis in select markets, while simultaneously testing tiered data caps based on the speed of service a customer buys. In recent weeks Comcast has expanded the program to new trial markets in Huntsville and Mobile, Alabama. Meanwhile, AT&T has already adopted usage caps for its residential customers.

In response to vocal outrage from consumers, the big ISPs have hesitated to roll out new metered billing plans nationwide. Still, say industry watchers, the clampdown is coming.

"It's like boiling a frog," says Karl Bode, editor of DSLReports, which closely monitors the broadband industry. "Carriers are slowly expanding trials and experiments—first voluntary—in order to make meters, caps, and overages standard for everyone. Unless you're willing to pay significantly, significantly more."

What is it, and should you care?
Buying broadband service used to be a one-size-fits-all affair, where you paid a fixed price for unlimited bandwidth. But in recent years the big ISPs have begun imposing data-usage caps, ostensibly to deal with a small group of subscribers who consume massive amounts of data yet pay the same as everybody else.

The ISPs may be following in the footsteps of the wireless industry by creating service tiers that offer varying amounts of data per month. Heavy data users would have to buy a more expensive tier to keep up their data-gorging ways. The ISP tracks ("meters") the customer's data usage and then charges for each additional gigabyte of data the customer uses beyond the monthly allotment.


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