The good news for consumers is that the Web is awash with cool new applications — such as high-definition video — that tap into the power and reach of the Internet. The bad news: Net obsession in the future could cost you. AT&T and Verizon have spent more than $70 billion in the past two years to expand capacity and fortify their networks with optical technology and other capacity-enhancing gear. Consumers will ultimately foot the bill. Trying to get broadband costs and revenue in line, some carriers are eyeing Internet service plans that charge by the megabyte. That could set the stage, eventually, for the end of Web plans that are priced on speed instead of actual consumption, which is now the case. The basic problem: Consumers are becoming enamored with applications such as streaming high-definition video that eat up a lot of bandwidth. It was OK so long as those applications were on the fringe, with few users. But pressure on broadband networks ratchets up significantly once millions of people start engaging in bandwidth-intensive activities simultaneously, says Suraj Shetty, a senior director at Cisco, the big equipment maker. Pushing the trend along, he says, is the explosion of digital cameras and other Web-enabled devices. Peer-to-peer services, which give users a cheap way to share, steal and borrow files from computers worldwide, are another a factor, he says. More than 60% of Web traffic is generated by peer-to-peer computing. "These are the challenges of the 21st century," Shetty says. By 2010, the average household will be using 1.1 terabytes (roughly equal to 1,000 copies of the Encyclopedia Britannica) of bandwidth a month, according to an estimate by the Internet Innovation Alliance in Washington, D.C. At that level, it says, 20 homes would generate more traffic than the entire Internet did in 1995. Larry Irving, co-chair of the alliance, which supports the spread of broadband, says it's only fair for consumers to pay for the bandwidth they use. "If you use more electricity, you pay for more electricity," he says. "This is no different." Right now, most Internet-access plans are priced by speed — faster plans cost more; slower ones are cheaper. Consumer advocate Gene Kimmelman, public policy director of Consumers Union, says the issue isn't whether consumers should pay more, it's how carriers manage their bandwidth. Some carriers "could double or triple their Internet capacity if they cut down on their video-on-demand" offerings, he says.
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