Originally published: June 26, 2012
Last updated: June 26, 2012 - 9:35pm
The broadband era began with the expectation that Internet connections were like buffets — all you can eat, 24 hours a day. But users are now being prodded to think about how much they’re consuming.
Internet service providers are moving slowly but surely, toward tiers of pricing for higher speeds and bigger amounts of broadband at home, mimicking the wireless industry’s much-maligned pricing plans. The strategy, called usage-based billing, is advantageous for the companies that control the digital pipelines. But it may be detrimental for customers who are watching more and more video on the Web every month, as well as companies like Netflix that distribute it. Some fear that as customers become more aware of how much broadband they’re using each month, they’ll start to use less of it, and in that way, protect traditional forms of entertainment distribution and discourage new Internet services. Executives at cable and broadband providers dispute that by saying it is in their interest to make broadband a must-have product. “The exploding growth of online video usage undercuts any argument that cable is standing in the way of this business,” said Brian Dietz, a spokesman for the National Cable and Telecommunications Association, the industry’s trade group. But some government officials aren’t so sure. The Justice Department’s antitrust lawyers are conducting an investigation into the cable industry’s treatment of online video companies with an eye toward deterring anticompetitive behavior. Some analysts say the investigation could, perhaps counter-intuitively, accelerate the move to usage-based billing.
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