The horror! the horror! Per gigabyte broadband charging provokes outrage in the US

Stuart Corner
Tuesday, 03 June 2008 11:20

Opinion and Analysis

Time Warner's move provoked similar outrage on the TechCrunch web site where Michael Arrington wrote : "The entire model lies in stark contrast to the competitive markets set up in South Korea and elsewhere, and it's going to hurt innovation in the US. Many new startups, particularly those focused on video and online gaming, rely on their customers having access to high bandwidth, al-you-can-eat connections.

The Time Warner service in question is a cable service, and for cable operators heavy users present a particular problem because the last mile infrastructure is shared among multiple users and significant investment would be required to increase available bandwidth. However, Arrington sees them as exploiting their near monopoly position and has called for regulation, saying:

"I'm almost never in favour of government intervention of markets, but monopolies are an exception. We need to encourage data usage by consumers, not the opposite. The cable companies are standing in the way of economic growth and innovation. We can't afford a decade or more of screwing around before trying to fix this. Let's start now."

Australians have long lived with what US observers might see as miniscule download quotas. The main reason given, rightly or wrongly, has been the cost of hauling most of Australia's Internet traffic across the Pacific from the USA.

Absent this cost, the US all-you-can-eat model was OK when users snacked on a diet of static web pages and emails, but today as the gorge themselves on a gluttonous feast of video, much of which is regurgitated thanks to peer-to-peer file sharing and uploads to YouTube, they will have to cease being horrified and start paying.