Given that the average user absolutely loathes pricing based on the quantity of data downloaded, it's interesting to hear that carriers and ISPs in places such as the US, Canada and Japan are considering doing just that.
In Japan such pricing is still in the discussion phase, but ISPs there have expressed concerns over an explosion in P2P and video traffic and some see "per-byte" charging as a possible solution. Bell Canada is also looking at its options, according to media reports, which stated that an industry group representing more than 50 independent Canadian ISPs is suggesting that Bell Canada's plans to throttle the web traffic on its networks is part of a larger plan to implement a tiered Internet pricing scheme. And in the US, Time Warner has already started trials in Texas of pricing schemes based on how much bandwidth the user consumes.
Users in Australia and New Zealand have long been used to Internet "caps" and associated charges that see them pay for the extra data they download. But in the rest of the world, "unlimited" data plans are taken for granted. There are a number of other countries that have capped data tariffs, but mostly these are outweighed by unlimited plans, as a study by New Zealand's Wairua Consulting found in 2006. NZ had the distinction of having the highest percentage of capped products among OECD countries surveyed, while the study also found that the top three countries in terms of broadband uptake -- Sweden, the Netherlands and Norway -- all "have significantly more choice, faster plans and either no usage restrictions or limits that in most cases are unlikely to ever affect customers."
Over the past 12 months I've been a user of both unlimited and capped services and have noticed a massive difference in my broadband habits depending on which I'm using. Using an unlimited broadband connection gives the user the opportunity to embrace the digital world fully, whether that's contributing to or accessing video sites like YouTube, sampling the world's radio stations via the Internet or creating a virtual meeting place on a social networking site.
A capped service, as I've experienced the past four months, can see users severely throttling their broadband activity and nervous about experimenting with anything online that might send them over their capped broadband limit and paying exorbitant charges for the excess data. In my case, the cap is 5GB -- a limit the carrier and a few friends suggested would rarely be exceeded. Wrong!
I don't consider myself a heavy surfer, particularly of video, but I've still found it easy to exceed the 5GB threshold. One change of habit as an example: I no longer have music services such as Last.FM playing constantly in the background while I work. I also have to be careful of automatic updating services, such as the security and other updates from Windows or application updates from the likes of Adobe.
In many ways, excess data charges can be compared to international roaming charges: they're often exorbitant, they create billing uncertainty for the user, and they end up inhibiting usage. Yet while there is plenty of action aimed at bringing down mobile roaming fees, there seems to be less momentum for removing data caps and excess charges. In fact, as the recent announcements in the US, Japan and Canada suggest, the trend could be towards more rather than less per-byte charging. And that would seem a distinctly backward trend given all the rhetoric about moving towards digital economies and the need for communities to take up broadband. -- Geoff Long