Pay-as-you-go Internet? Really? Maybe.

Pay-as-you-go Internet Could Be Next Big Thing

I wrote about pay what you want pricing a couple months ago, where consumers choose their own value for something you produce. Now the current headline and pending FCC proposal concern pay-as-you-go Internet access or net neutrality as it is being called.

At the forefront of the proposal that will be voted on a week from today is Chairman Julius Genachowski.
In an article in, Chloe Albanesius wrote:

“The plan outlined by Genachowski includes five basic points: meaningful transparency; a ban on blocking lawful apps and services; a ban on unreasonable network management; an allowance for a certain amount of ISP network management; and rules governing wireless that calls for transparency and a basic no-blocking rule.

“What does that mean? On transparency, Internet service providers will be required to provide customers with information about how their networks are managed. Do things slow down at certain times? Is there a usage cap? This will enable customers and innovators to ‘have the information they need to make smart choices about subscribing to or using a broadband network, or how to develop the next killer app,’ Genachowski said.”

Perhaps the biggest issue that this proposal opens the door to, however, is the advent of pay-as-you-go Internet viewing.

Wrote Cecilia Kang of The Washington Post last Thursday, “By blessing tiered pricing practices, Genachowski said he wanted to strike a balance between consumer protection and promoting ‘network investment and efficient use of networks, including measures to match price to cost such as usage-based pricing.’ ”

If you think it’s a bit complicated, you’re right. Things seem to be headed in the direction of so much else these days—be it seat licenses at sporting events or new “HOT Lanes” being built here in Virginia—where separate user’s fees are required. Pricing video viewing could be an area that affects SIPA, as more and more members roll out videos on their sites. Will these same companies have to send out charts along with these videos so customers know how much bandwidth they are using?

“Most people still don’t know what a megabyte is,” Genachowski said recently. “So it’s hard to expect them to know when they have reached their limits.”

In a survey, the research arm of investment house Sanford C. Bernstein found that consumers are not happy with the idea of usage-based pricing plans. “They’re generally ill-equipped for any estimation of their usage, and they are ill-equipped to judge its implications,” Bernstein analyst Craig Moffett wrote. “Given the option, the vast majority of respondents would stay with their unlimited plans.”

Genachowski did address small business in his prepared comments on Dec. 1.

“Small businesses and start-ups have accounted for more than 22 million new American jobs over the past 15 years,” he wrote. “And broadband has played a central part, enabling small businesses to start, to lower their costs, and to reach new customers in new markets around the country and, indeed, the globe.

“Why has the Internet proved to be such a powerful engine for innovation, creativity, and economic growth? A big part of the answer traces back to one key decision by the Internet’s original architects: to make the Internet an open platform.”

And as with everything else, politics is involved. The article in ends with: “Republican Commissioner Robert McDowell said in a statement that he ‘strongly’ opposes ‘this ill-advised maneuver.’

” ‘Pushing a small group of hand-picked industry players toward a choice between a bad option (Title I Internet regulation) or a worse option (regulating the Internet like a monopoly phone company under Title II) smacks more of coercion than consensus or compromise…’ ”

I will report back after the Dec. 21 vote.


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