Tuesday, February 5, 2008

Pay Per Use/Unit

Over the past few months I have been looking into the pay per use/unit system that Internet service providers in other nations have adopted. Recently, Time Warner Cable in Beaumont, Tx will begin charging users a flat rate for access that includes certain levels of upload and download amounts. However, it will also start charging subscribers a fee for every unit they exceed their base amount. (This is an pilot program.)

The positive side, as some point out, is that those users that download heavily will be able to stay connected to the Internet and not just be cut off. Additionally, the ISP network may operate better.

The negative side, those users that are not cut off are now subjected to perhaps a higher bill, if they exceed their limits. Networks may not operate any better than current levels.

My questions:

-How will such a pricing scheme affect streaming media and online games?

-Why would a cable company, Time Warner, start per unit pricing when it is also providing such television stations as HBO, owned by Time Warner, to its own Internet subscribers?

-How will users know the amount of data they have downloaded?

-Will bandwidth be increased to subscribers?

-Subscribers are moving from unlimited to limited download amounts, what benefit(s) do subscribers obtain for this switch?

These are a few questions that I have come up with over the past few days. Hopefully, after the Beaumont, TX experiment we will be able to see answers to these questions, at least on a small scale.

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