Byline: Ed Gubbins
It’s a sad fact that broadband service providers and their potential customers are in agreement over their dissatisfaction with the price of broadband. Many residential Internet users consider $50 a month too much to pay for a medium that doesn’t offer much compelling content. The symmetric discontent of providers, on the other hand, was given a voice when Verizon Vice Chairman and President Lawrence Babbio told a crowd at Supercomm 2002 earlier this month that current DSL prices are 40% to 50% lower than they should be. Though Verizon said it has no plans to double the price of DSL, Babbio’s words traveled beyond the walls of the Georgia World Congress Center, and a nation of broadband users let out a collective groan.
Broadband service providers are mulling competing theories on how to tackle the issue. Covad is expected to institute a tiered pricing structure to cater to a variety of users with varying tastes and tolerances. Several cable companies are considering similar moves, which is likely to cause more groaning from users if the customers who use the most bandwidth are asked to pay more.
Some service providers also are considering setting “bit caps,” which would exact additional charges for users who exceed traffic limits. But that method would send a confusing message from an industry that should be encouraging more bandwidth consumption, not less. Part of the motivation for such a cap might be to keep a leash on content pirates who download bootleg music and movie files. Pirates have run amok of late, fostering bad blood between broadband providers and media houses whose content could pump new life into broadband’s veins. But using bit caps to curb piracy is like installing more narrow doors at Wal-Mart to deter shoplifters. And it would punish law-abiding users for their bandwidth demands.
Bandwidth hogs can be an economic strain on the network, as NetZero (now United Online) found out long ago when it noticed a small fraction of its user base sucking up a disproportionate helping of bits. Tiered pricing is not an unreasonable response to that dilemma. But piracy shouldn’t be part of the discussion on broadband pricing. There are other ways to fight pirates.
Now is not the time to discourage those who have a hunger for high bandwidth. Punishing those who use bandwidth-heavy applications could stanch the flow of broadband innovation. They shouldn’t all be treated like criminals, even if some of them are.
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