PPU - PayPerUsage

Posted on April 27, 2008

By some estimates, the average broadband equipped home will use more than a terabyte of bandwidth per month by 2010. High-bandwidth apps like peer-to-peer sharing and high-quality streaming video are putting a hit on current networks and building a greater infrastructure will be very expensive, so ISPs are looking for new ways to fund the work. What better way than to charge by usage and let the people who use the most pay the most.

I ranted recently that Internet access should become a utility like water and electricity. If so, though I don’t want to pay for my ‘excessive’ usage, it does seem to make some sense that just as my water and electric bills go up the more I use, that the Internet utility would work the same way.

Actually, I think Google should build the needed infrastructure - for free. After all, it’s YouTube that has 100 million video downloads daily and 65 million uploads. Shoot, that’s where the whole problem is, don’cha think? Not only that, Google is already testing out high resolution video and once that’s implemented they will need 5 times as much bandwidth as they do now.

Wireless data customers are already given a choice of plans based on expected usage. So, expect residential broadband to move to a pricing that isn’t speed based but rather is on a bandwidth used basis.

I can see them offering what will be described as a best effort connection with no speed guarantee (just the best that they can do) and have the plans based on gigabytes of download instead. So you may get something like 50GB a month for $29.95 or a terabyte for $99.95. You would then pay an overage per megabyte of data in excess of your plan. This will function a lot like the minutes on a cell plan. So you can receive an eye-opener bill for Internet service like you have with your phone bill. Used up your minutes, $40 for the extra time last month. Used up your bandwidth, $40 for your extra downloads.

This will also probably mean the end of lower rates that have been in place. AT&T, for instance, offers a lite DSL that used to be 256Kb down, but they moved that up to 768Kb last year at no additional cost. That plan is $19.95 a month. I expect that to go away, justified because the users will now have service that is several times faster, for which they will pay something in the range of $29.95.