Fast Forward: Broadband Caps Can Cost You

By Rob Pegoraro
Friday, May 1, 2009; 8:07 AM

What's more important when you sign up for your Internet service: getting a lower price upfront, or being assured that your bill won't jump higher later on?

That's the crux of the debate over broadband caps, a pricing system some Internet providers have been pushing lately.

The idea behind it, as these companies explain, is to ensure that the most intensive Internet users pay their fair share. Many customers, however, see this as a duplicitous scheme to charge them extra for enjoying the Internet too much.

Two weeks ago, Time Warner Cable backed down from a broadband-cap proposal under which it would have sold access with varying quotas, starting at $15 a month for a plan allowing just one gigabyte of use. Each extra gigabyte would have cost $1 or $2, depending on the plan, with total surcharges capped at $75 a month.

Time Warner's plan had numerous flaws -- such as the steep overage fees and the fact that Time Warner, like other cable companies, offers no such pay-for-what-you-use option with its cable TV service. But other providers have been able to make broadband caps stick.

Last October, Comcast set a 250-gigabyte monthly cap on its residential Internet service. There's no charge for going over that line, which Comcast communications director Charlie Douglas said "fewer than one tenth of 1 percent" of its customers do. But if you exceed it twice in six months the company can cancel your service.

Mobile broadband services from such carriers as AT&T Wireless and Verizon Wireless have far stingier restrictions that limit laptop users to just 5 GB a month.

Most providers in the United States, however, continue to shy away from specific usage limits. Verizon, for example, bans "high volume" use of its Fios service but doesn't define the term. (Every responsible Internet provider prohibits such egregious abuses as spamming.)

As long as customers have a choice of providers, it shouldn't matter how dumb any one company's policies are -- the market ought to see to that firm's punishment soon enough. But too many users don't have that flexibility.

At the same time, the idea of charging people for the bandwidth they use isn't necessarily flawed. Done right, it could be a fair and understandable way to bring broadband to more people.

It's too bad, then, that the implementations we've seen so far seem to get everything wrong.

First, the idea of a 1-gigabyte limit has to die, right now. That's barely enough for an average month's worth of security patches, much less such monster updates as Microsoft's 345-megabyte Service Pack 1 for Windows Vista or Apple's latest "combo update" for Mac OS X, a 668-MB download.

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