New Report Says Tiered Broadband Bad, Unlikely

The Free Press issued a report this afternoon casting doubt on the theory of network congestion that has been cited by ISPs as the reason behind P2P blocking or broadband caps, and offering more rational solutions for dealing with sporadic congestion. It also claims that tiered broadband and limitation pricing — in which a carrier charges per gigabyte fee after users exceed a certain cap — is unlikely to become reality. Prior to the report coming out, I had spent the afternoon asking people about this issue, trying to figure out if our series of tubes is really clogged or if the carriers are merely seeking financial and/or competitive gain.

Most people believe and some data shows that not only is the Internet not as congested as the carriers want you to believe, but usage isn’t growing as fast as we’re being told. So when I view efforts such as Frontier’s 5 GB data cap or Bell Canada’s usage pricing for smaller carriers using the Bell Canada network, and offering data over 2GB, I don’t see an honest attempt to deal with network congestion — I see anti-competitive behavior. And Frontier’s cap seems particularly stupid given that Time Warner hasn’t yet begun implementing a tiered system in Frontier’s region and will offer a cap that exceeds 5 GB if it does. As the Free Press report states:

The arguments for the “need” to switch to limitation pricing essentially rest on the premise that we’ve somehow reached a magical bandwidth threshold that throws the entire industry pricing model out the window. We are being told that despite predictable growth, supply can no longer keep up with demand. The old “oversubscription” model has failed, and the only way to recoup costs and manage user behavior is through metered pricing. This seems highly implausible.

I agree, especially when I consider AT&T’s plans to upgrade its network and the cable providers talking about their plans to implement DOCSIS 3.0. If the networks are building out capacity, one would think they’d want customers to use it. Prohibitive caps make that use more expensive, and less accessible to the average users who have driven broadband growth. That’s one reason the Free Press indicates that caps will not gain in favor with ISPs. And if all they’re really trying to do to stifle video competition from sources such as Netflix, Hulu or Amazon, then it’s time for the FCC or Congress to get involved.

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