End of the Free Ride?

In the mid-90s, as I was growing more and more Internet aware--I might even say savvy--the growing realization was that here was a free ride. Just about everything was free (for a small monthly fee): News, email, music downloads (until the recording industry caught on and the free servers began to shut down), even movies.

Along with that realization, however, came another--a little more distant, and one that I did not want to inspect too closely: who's really paying for all this?

At this point, using Netflix online streaming service, I could literally use up gigabits of bandwidth each hour of the day, each day of the week, each week of the month, and all for my relatively low cable internet service.

Power Users

A power user in my book is someone who muscles in on the bandwidth and grabs the lion's share of it. This includes the constant movie watcher, gamers, and others who stream online multi-media.

Compare that to the business user who may only use email and perhaps the occasional online PowerPoint presentation. Toss in a few Acrobat files sent to everyone in the office, and a handful of presentations or proposals back and forth from clients, and you have his total use of the bandwidth. A use that more than likely is between one and ten percent of that of the power user. Checking his monthly cable internet statement, however, we'll see the same figure.

Who's Paying?

So, who's paying? Or, more specifically, who is paying the power users over-use of bandwidth. At this point, the cost is spread out among all users, so, frankly, the business, or personal, user is footing the bandwidth bill for the power user.

Not for so much longer, perhaps.

A recently released report written by Dr. Robert Shapiro (co-authored by Dr. Kevin Hassett) examines the broadband expansion (to include all Americans) called for by President Obama, and what it would take to bridge the digital divide to the point where 98.5% of Americans will be on broadband by 2017. Bottom line: $300 billion. That is a tough pill to swallow for even the most successful and enthusiastic ISP.

Flexible Broadband Pricing

Expanding the broadband network, while also providing higher and higher bandwidth for the power user, is not an inexpensive undertaking; and the question is continually asked: should you not pay as you use?

The analogy of an "all you can eat" restaurant is often called upon to illustrate this dilemma. Good principle as long as most customers stick to main meal, desert, and coffee. However, the power-eaters--who easily downs six entrées, four main courses, and fourteen deserts--are growing in number and seem to also grow increasingly voracious. The "all you can eat" principle just isn't cutting any longer; this restaurant is beginning to run at a loss.

The Shapiro/Hassett report points this out, and highlights an unwanted side effect to the problem: unless you pay as you use bandwidth, the bridging of the digital divide will be significantly delayed.

Digital Divide

Financing the power user on an "all you can eat" basis, will continue to raise (yes, it has begun already) the flat monthly fees for broadband, which, naturally, hits the personal or business user as well. Should this trend continue, the average "eater" would simply refuse to pay, knowing well that he or she is paying for the indulgence of the digitally obese.

The only way, the report concludes, to ensure the digital divide is bridged, is to introduce some form of equitable pay-as-you-use pricing.

And I could not agree more.