Comcast's Bandwidth Limits Could Change Web Forever

The battle lines have now been drawn clearly. Wide-open Internet usage could easily, and soon, become a thing of the past. On October 1, one of the nation's largest Internet providers will implement a new bandwidth limit policy for its residential customers.

According to reports, by this time next month Comcast will introduce a 250 gigabyte-per-month limit. (Source: nytimes.com)

The Comcast move follows a recent dispute about its 'throttling' policy where the company limited bandwidth for customers using the BitTorrent file-sharing program. On August 1, the Federal Communications Commission (FCC) ruled against Comcast in a complaint about its policy. The company claims that there is no link between the FCC ruling and its new bandwidth caps but Om Malik of GigaOm, a technology blog, quickly labeled the move "the end of the Internet as we know it".

Other companies have been experimenting with similar policies. Earlier this year, Time Warner tested a 5 gigabyte cap and several smaller service providers have since followed suit.

Service providers claim that increased use of P2P (peer-to-peer) applications are creating an unreasonable load on their services. Applications like instant-messaging, file transfers, video downloads, music downloads and interactive games all use P2P Internet protocols.

But consumer advocates fear that the bandwidth caps are really an anti-competitive move designed to prevent services like Netflix and web TV from competing with cable providers who already provide TV and movie distribution. The FCC ruling in August was in response to this fear.

While many may find that a 250 gigabyte-per-month cap provides a comfortable margin for the majority of users, the problem is that technology -- and bandwidth requirements -- continue to expand. If history is any judge, a reasonable bandwidth limit of 250 gigabytes today is likely to seem unreasonably small in the future.

What's at stake is the "neutrality" of the Internet and the basic competitiveness of U.S. broadband suppliers. Cable providers failed to adequately exploit their intrinsic advantage in providing video services and are now facing a major competition from Internet sources. Moreover, U.S. broadband suppliers have failed to maintain competitive technology. The result is much higher bandwidth costs than many other nations.

In the U.S. for example, a megabit per second of download speed costs from $2.83 to $38.41 as of late 2007. This compares to a megabit per second cost in Japan of just 13 cents. France, Sweden, Korea, Finland, Australia and many others all have access to faster broadband services at lower costs. (Source: businessweek.com)

This issue is being described as no less than a battle royal for control of the Internet. If the Comcast move remains unchallenged, more providers will almost undoubtedly follow suit, and the industry could have even less reason to address its lack of competitiveness. The only question at this point is whether the FCC or U.S. Congress will again weigh in on the battle to keep the Internet wide open.