Cable Companies Are Experimenting With Metered Data

[Commentary] As of Oct 1, Comcast customers in a few small markets are now subject to metered data use. Households that use more than 300 gigabytes of data per month will have the choice to pay $10 for an extra 50 gigabytes or $30 per month for unlimited service. The cable giant joins the No. 4 player in the industry, Cox Communications, in offering tiers that vary in price depending on data use. Metered data has a bad reputation with many Internet users. Nobody wants to calculate how much streaming a movie or downloading a new video game costs in data charges. But in fact, metered data is good for most consumers and for the Internet.

Broadband networks are composed almost entirely of fixed costs -- costs that don’t vary very much with usage. Cable companies have to spend many billions of dollars to build and maintain their networks whether or not we use them. One way or another, users of the network have to collectively pay those billions of dollars. Metering broadband is an efficient way to expand access and improve speeds for customers of all income levels. Without pricing flexibility for Internet service, we run the risk of shutting our most vulnerable populations off from the many opportunities in our networked world.

[Eli Dourado is a research fellow at the Mercatus Center at George Mason University and director of its technology policy program]