Tiered pricing and fairness

As I've been typing these blogs, I realize that my views on the Net Neutrality debate are refining a bit. In my first post, I defined Net Neutrality as "the idea of passing data packets without a 'gatekeeper' either blocking them or showing any preferential treatment". However, last week I also took exception to ISPs offering tiered Internet packages with usage caps. I want to expand on that topic.

I found this post helpful in separating net neutrality and tiered pricing as two distinct concepts. Basically, if you want high volume usage, regardless of the type of use (altruistic educational purposes vs. less legitimate uses), you need to pay for it. Given a level playing field, I've come to the conclusion that conceptually, I really have no problem with this 'pay-to-play' pricing.

I do enjoy the unlimited usage I currently have and never think twice about it. If presented with usage caps, I could determine my usage requirements and find a plan that offered me a good cost/benefit ratio based on my personal usage. Having said that, it sounds good in theory, but I don't think the playing field is level. If you think it's close to level, don't count on it staying that way for long.

For starters, the various ISP's "unlimited" plans were supposed to be just that - unlimited. As we've seen, these are becoming less and less geared toward offering truly unlimited use as the subscriber sees fit. Until fairly recently, most of the providers were concentrating on improving access speed to remain competitive and prices have remained extremely stable.

Now the ISPs are working on restructuring the pricing plans at the same time that data intensive applications and streaming video usage continues to expand. There needs to be a significant investment in the underlying infrastructure of the Internet for this bandwidth-heavy growth to continue and the ISPs are looking for ways to raise additional capital. (If the ISP's claims are to be believed, something like 5% of users utilize 50% of available bandwidth.)

I feel there's a distinct conflict of interest when the ISPs are also providing content. It looks to me that we're heading toward an 1980-90's model when competing cable companies were offering different channels to watch (i.e. if you want the NFL channel, you need to subscribe with DirectTV). Although I think it's unlikely to actually come to this, as I said in the last post, just wait for the big ISP's to start offering their own streaming music and videos.

However, it also looks like the pricing is going to be a bundled combination of data speed along with usage caps. That really bothers me. I might find that a 15GB limit per month will suffice, but at a speed of 768kbs, its unworkable. Using the same television cable company analogy, it's similar to when they bundle channels you don't want with channels you do want.

To keep this fair and competitive (that level playing field idea), if the ISPs want to proceed with this type of tiered pricing, they should: 1) be prohibited from providing content which gives them a competitive advantage (video/music downloads that don't count toward usage caps mentioned last week) and 2) be required to offer the data speed and usage caps separately in more of an 'a la carte' fashion.

On that second point, if/when tiered pricing comes to town, I think I should be able to choose what upload/download speeds I want and separately choose what caps I want. They're not the same thing and I don't like being pushed into a higher usage cap in order to get faster data speeds. As I type this, I know it's probably wishful thinking on both points. Although both could be incorporated legislatively, I doubt it'll ever happen.

Finally, not directly related, but here's someone with a viewpoint even more cynical than mine - the idea that an ISP with bandwidth caps and overage fees stands to gain financially from illegal peer-to-peer sharing.