Paying per byte; the impact of Time Warner's new pricing

What will it mean to pay per byte while surfing the net?

You've no doubt seen the news about Time Warner Cable changing their broadband pricing structured from a flat-rate plan to a tiered plan. Their claim is that this system will give 'light users' a break in the amount they pay for broadband.

If you haven't followed the story, let me bring you up to speed. First, here's an online statement that TWC directed Wired to. And here are two of Wired's relevant articles: Time Warner Cable Earnings Refute Bandwidth Cap Economics, & Bowing to Pressure, Time Warner Alters Broadband Caps. For a real-world example of how the pricing changes will impact a typical young family, check out Lara Crigger's article at Gamers With Jobs, The Meter Is Running (though note that Ms. Crigger wrote her piece before Time Warner tweaked their pricing).

OK, all caught up?

I've been trying to wrap my mind around the ramifications of this kind of pricing scheme, and every time I think I've got a handle on them all, more pop up. Putting a price on transferring a bit of data...that changes everything. There's really no analogous service that most of us pay for. You might think about your electricity or water bill, and they are close, but since they're necessities there's only so much impact pricing changes would have. The cost of electricity would have to really skyrocket before we all decided to start using candles instead of lights at night (and the government would step in well before things got to that point). Also there are no 'caps' on these services. You don't worry about exceeding your electricity limit and having to pay a premium surcharge for every kilowatt hour you go over.

The closest service I can think of would be a cell phone plan where we're billed by the minute and do pay a premium price for every minute after our plan's allotment. But a minute is easy to keep track of, and easy to control. If I talk to you for 10 minutes, I know I've spent 10 minutes of my allotted time. There are no surprises or 'hidden minutes' to worry about. When I go to a web page, I don't know how much bandwidth that's going to use. I can guess at the content of the actual page, but what about all those flash ads? What about the flash ads that stream audio and/or video? Suddenly I'm paying to download those (while the ad-serving company is paying to send them to me).

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