The New York Times looks at the efforts of U. S. ISPs to institute tiered pricing plans. Read the full story here; it appears to be an excellent, unbiased analysis.
Cable executives say the issue is not competition but cost. People who watch or download a lot of movies and TV shows use hundreds of times more Internet capacity than those who simply read e-mail and browse the Web. It is only fair, they argue, that heavy users should pay more.
Still, critics say the image of Internet providers as restaurants about to go broke serving an endless line of gluttons simply does not match the financial or technological realities of the industry.
They point out that providers’ profit margins are stable, and that investment in network equipment is generally falling.
These plans to charge for above-average Internet use “are unjustifiable for almost everywhere in the country except for rural America,” Richard F. Doherty, the research director of the Envisioneering Group, a consulting firm that studies cable technology.
I do not credit the ISP’s arguments in favor of tiered pricing. In my opinion, they are just looking for a way to charge more for doing what they are already charging a lot for doing.
I also think that one of their thoughts may be bandwidth caps or charges may give them some cover from the Entertainment Industry’s complaints about file-sharing of copyright material, though this is a theory that I have seen no one else mention.
Here’s my reasoning: Say the RIAA comes to Humongous ISP Inc. and says, “We want you to do something about peer-to-peer or we are going to find some way to make you uncomfortable.” Humongous is in a position to say, “Hey, RIAA, we’ve instituted bandwidth caps and charges. That’s going to cut into peer-to-peer big time.”
RIAA says, “Okay, we’ll go annoy someone else now.”
Aside: Note that Time Warner, which is leading the movement to the change internet service pricing structure, also owns HBO, TBS, and Warner Bros., all of which produce copyright digital content.