ISPs: Internet Usage-Based Pricing 'Unavoidable'

Dennis Faas's picture

Some cable and telecommunications providers are trying to return to the days of usage-based pricing for Internet connections. AT&T and Time Warner are two Internet Service Providers (ISPs) who say they may alter their pricing schemes due to the surge in bandwidth use.

FCC: All Web Traffic is Equal

Attempts to introduce usage-based Internet service have long been resisted by consumers.  However, the FCC wants to adopt new policy that would force Internet Service Providers (ISPs) to treat all web traffic equally regardless of how much bandwidth users consume -- and that could result in ISPs changing how they charge for Web access.

Philip Dampier, a consumer advocate focusing on technology issues in Rochester, N.Y., was among those who forced Time Warner Cable to shelve a metered Internet pilot program in several cities last year. Dampier says that it could come down to carriers saying "if you don't allow us to manage our networks the way we see fit, then we will just have to cap everything." (Source:

ISPs: Pay-As-You-Go Plans Unavoidable

Verizon Communications chief technology officer Dick Lynch believes that flat-rate, infinitely expandable service is unrealistic, indicating that ISPs will have to consider pricing structures that allow them to sell packages of bytes. Because online file-sharing software like BitTorrent takes up so much bandwidth, ISPs believe that heavy users should pay more.

Advocates believe that paying by usage could hurt new and existing businesses, saying that unlimited monthly Internet services has been critical to the formation of many online start-up companies.

Six Tiers of Pricing

AT&T has been pricing Internet access based on usage in Beaumont, Texas and Reno, Nevada. Since last year, new customers in those two cities have chosen from one of six tiers of pricing depending on the desired speed and how much data they think they will download per month. Existing customers in those areas can keep their old plans, which are capped at 150 gigabytes per month.

The basic plan costs $19.95 per month, offering 20 gigabytes of downloads. The most expensive plan costs $65 per month, offering 150 gigabytes of downloads. When a user goes over their limit, it costs them $1 for each additional gigabyte. It's rumored AT&T also believes that users who have abnormally high usage patterns should pay for some type of usage-based plan, but the company would not provide more details.

FCC to Strengthen Net Neutrality Principals

Some ISPs have instituted monthly usage limits -- Comcast, for instance, instituted a cap of 250 gigabytes per month -- but the limits are so high that they only affect the heaviest users. The average Internet user consumes around 15 gigabytes per month. To use 150 gigabytes, a user would have to send and receive 75 million emails or download over 30,000 songs in a single month. (Source:

The FCC wants more transparency in how carriers manage their networks and is trying to strengthen existing principals on network neutrality to ensure that all ISPs treat Internet traffic equally.

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