Itsme
03-27-2006, 09:15 AM
Internet providers consider new fees
Charges to be based on activity by users
By David Ho
COX NEWS SERVICE
March 27, 2006
Imagine if the Internet really worked like its old nickname, “information superhighway,” with travel costs tied to going farther and hauling more and speedier toll roads for avoiding traffic.
Major Internet providers and technology companies are betting some version of this future is on the way. But for consumers accustomed to paying one fee for unlimited Web access, such pricing might seem bizarre.
It could mean consumers paying more or less depending on what they do online. Activities that gorge on Internet capacity, or bandwidth, such as downloading videos, sharing files and playing advanced games, could rack up bigger bills than sending e-mail and perusing Web sites.
“We're getting ready to see a pretty significant explosion and growth in Internet traffic,” said Bill Smith, chief technology officer for Atlanta-based BellSouth Corp. “Depending on how that happens and when it happens, that could be a big problem for us.”
Smith, among executives speaking at the TelecomNEXT industry convention in Las Vegas earlier this month, said a crisis hasn't yet arrived, but network traffic has increased 20 percent within the past 18 months and “rich media” applications such as streaming video are becoming more common.
To prepare, BellSouth is considering new business models and technologies to keep up with increasing network demand while keeping consumer bills low and encouraging the spread of high-speed Internet access, or broadband, Smith said.
While the plans from BellSouth and others are in early stages, they've received increasing attention because of the industry and government debate over “network neutrality,” the concept of free and equal access on the Internet.
Consumer groups and Internet content providers, such as search giant Google and Internet phone company Vonage, want to prevent phone and cable companies from creating tiers of access or making other network changes that could discriminate against some online services.
“Allowing broadband carriers to control what people see and do online would fundamentally undermine the principles that have made the Internet such a success,” Vinton Cerf, Google's “chief Internet evangelist,” told a Senate committee recently.
The service providers and companies that make Internet equipment oppose new regulations that they say would stifle innovation and new business models needed in a rapidly changing marketplace. While pledging not to limit what consumers do online, they say networks must be maintained and improved and someone will have to pay for it.
Phone companies have proposed charging fees to companies that generate high volumes of online traffic, such as Web portals like Yahoo! Another proposal would allow companies to pay for access to network “toll roads” that provide preferential treatment by delivering content to consumers with greater speed and reliability.
Among the most vocal supporters for exploring new Internet business models have been Cisco Systems CEO John Chambers and Ed Whitacre, chief executive of San Antonio-based AT&T.
AT&T is “exploring different products and business models, but we feel strongly that this is an issue that has to be solved in the competitive marketplace,” spokesman Michael Balmoris said.
Consumers already have begun seeing changes in Internet billing, with tiers of service based on connection speeds.
But subscribers paying more for faster connections doesn't address the bandwidth-usage issue, said Smith of BellSouth. He said someone with faster access might be online only briefly to play a game, while a person with a slower connection could be constantly downloading videos or sharing files.
Smith said raising monthly fees for all customers is an option to bring in more revenue and pay for networks, but that it could have a “chilling effect” on the adoption of broadband and doesn't address the uneven way people use the Internet.
On BellSouth's networks, 1 percent of subscribers use 40 percent of the online capacity while the vast majority of users – 80 percent – drive only 20 percent of the traffic, Smith said.
Cisco, which builds network equipment, has proposed a business model whereby consumers would pay a low fee for basic Internet access for Web surfing and e-mail, and additional charges for bandwidth-hungry applications such as file sharing and video streaming.
“You can buy your Mercedes or you can buy your Hyundai and pay accordingly,” said Jeff Campbell, Cisco's director of technology and communications policy. He said consumers might pay an extra $5 or $10 a month to ensure a better connection.
Charges to be based on activity by users
By David Ho
COX NEWS SERVICE
March 27, 2006
Imagine if the Internet really worked like its old nickname, “information superhighway,” with travel costs tied to going farther and hauling more and speedier toll roads for avoiding traffic.
Major Internet providers and technology companies are betting some version of this future is on the way. But for consumers accustomed to paying one fee for unlimited Web access, such pricing might seem bizarre.
It could mean consumers paying more or less depending on what they do online. Activities that gorge on Internet capacity, or bandwidth, such as downloading videos, sharing files and playing advanced games, could rack up bigger bills than sending e-mail and perusing Web sites.
“We're getting ready to see a pretty significant explosion and growth in Internet traffic,” said Bill Smith, chief technology officer for Atlanta-based BellSouth Corp. “Depending on how that happens and when it happens, that could be a big problem for us.”
Smith, among executives speaking at the TelecomNEXT industry convention in Las Vegas earlier this month, said a crisis hasn't yet arrived, but network traffic has increased 20 percent within the past 18 months and “rich media” applications such as streaming video are becoming more common.
To prepare, BellSouth is considering new business models and technologies to keep up with increasing network demand while keeping consumer bills low and encouraging the spread of high-speed Internet access, or broadband, Smith said.
While the plans from BellSouth and others are in early stages, they've received increasing attention because of the industry and government debate over “network neutrality,” the concept of free and equal access on the Internet.
Consumer groups and Internet content providers, such as search giant Google and Internet phone company Vonage, want to prevent phone and cable companies from creating tiers of access or making other network changes that could discriminate against some online services.
“Allowing broadband carriers to control what people see and do online would fundamentally undermine the principles that have made the Internet such a success,” Vinton Cerf, Google's “chief Internet evangelist,” told a Senate committee recently.
The service providers and companies that make Internet equipment oppose new regulations that they say would stifle innovation and new business models needed in a rapidly changing marketplace. While pledging not to limit what consumers do online, they say networks must be maintained and improved and someone will have to pay for it.
Phone companies have proposed charging fees to companies that generate high volumes of online traffic, such as Web portals like Yahoo! Another proposal would allow companies to pay for access to network “toll roads” that provide preferential treatment by delivering content to consumers with greater speed and reliability.
Among the most vocal supporters for exploring new Internet business models have been Cisco Systems CEO John Chambers and Ed Whitacre, chief executive of San Antonio-based AT&T.
AT&T is “exploring different products and business models, but we feel strongly that this is an issue that has to be solved in the competitive marketplace,” spokesman Michael Balmoris said.
Consumers already have begun seeing changes in Internet billing, with tiers of service based on connection speeds.
But subscribers paying more for faster connections doesn't address the bandwidth-usage issue, said Smith of BellSouth. He said someone with faster access might be online only briefly to play a game, while a person with a slower connection could be constantly downloading videos or sharing files.
Smith said raising monthly fees for all customers is an option to bring in more revenue and pay for networks, but that it could have a “chilling effect” on the adoption of broadband and doesn't address the uneven way people use the Internet.
On BellSouth's networks, 1 percent of subscribers use 40 percent of the online capacity while the vast majority of users – 80 percent – drive only 20 percent of the traffic, Smith said.
Cisco, which builds network equipment, has proposed a business model whereby consumers would pay a low fee for basic Internet access for Web surfing and e-mail, and additional charges for bandwidth-hungry applications such as file sharing and video streaming.
“You can buy your Mercedes or you can buy your Hyundai and pay accordingly,” said Jeff Campbell, Cisco's director of technology and communications policy. He said consumers might pay an extra $5 or $10 a month to ensure a better connection.