Your broadband provider may start pay-as-you-go pricing
Attention fans of streaming limitless movies from Netflix, video chatting through Skype or listening to Internet music from Pandora. Enjoy that unlimited world while you can.
Home Internet providers are ditching unlimited broadband plans in favor of plans that charge customers for downloading every gigabyte. Providers such as AT&T and Comcast already have such plans, and Verizon is evaluating them.
The plans are called things such as "Consumption-based," "Tiered Service," or even "Capped" data. But they all bring to home broadband service something widely loathed in the cellular world: overages -- fee for downloading excessive gigabytes.
And what's a gigabyte anyway? That's just one problem that consumer advocates say is unfair to consumers who originally signed up for broadband service because it was unlimited and fast, only to have the "unlimited" part taken away.
"Bandwidth caps stifle consumer choice," said Parul Desai, public policy counsel for Consumer's Union, because many people chose Netflix and other Internet media exactly because their cable TV bills were so high.
The idea of consumption-based broadband sets two rival technology camps on a direct collision course.
On one side are innovators such as Netflix that operate in what's called the "cloud" of media stored in data centers that customers download as needed. Pandora uses this for streaming music. Skype relies on streaming access so members can video-chat for free.
Google uses the cloud for its TV service and the nascent Google Chromebook that has no internal hard drive – only a broadband connection. Apple uses this for downloading movies and TV shows through iTunes, for Facetime video chats and for the coming iCloud service that lets users upload and access all their media remotely.
Plus, there are broadband-reliant game stations, WiFi-connected HDTVs and file storage services such as Dropbox – not to mention the automatic software and virus program updates. Each requires broadband.
Customers are flocking to such cloud services. More than 76 percent of iPhone owners plan to use iCloud, according to RBC Capital. By some estimates, a third of all home data traffic comes from Netflix, whose memberships grew 69 percent since last year to more than 23 million -- nearly the population of Texas.
On the other side of the argument for tiered pricing are the broadband companies that own the Internet connections bringing those services into people's homes.
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"We're not against usage-based billing," said Netflix spokesman Steve Swasey. "The Internet Service Providers are deserving of profit and a return on their investment." What Netflix would protest, he said, are ISPs that almost hold broadband customers
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There, Netflix informs users: We know that some of you have Internet data caps and we want to make it easier for you to manage how much data you use. We offer 3 video quality settings to help you manage your data usage. No matter what level you choose,
In January, Level Three took on the job of distributing Netflix's streaming video; on some slow nights, that video accounts for 20 percent of all US broadband Internet use. Comcast is a last-mile behemoth; it brings the Internet into 16 million homes,
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