Paying for the internet


One of the many surprises that greeted me upon my arrival to London a few weeks ago was discovering the restrictions on internet usage that I would be subjected to by my provider. In the States, almost all internet service plans come with unlimited usage; here, for a low cost I have access to a few hours a day and enough space for about 500 emails each week.  If I want to download movies or many pictures, I can purchase space for an additional price. I was impressed by the efficiency and cost-effectiveness of plans that charge according to use, and wondered why the American market seemed so different.

Now, it looks as though American internet suppliers will be moving in the same direction. It’s hard to imagine the internet as a limited resource, but only so much information can be transmitted at any given time on one network. As demand has increased, the supply has become more valuable. Companies like Comcast and AT&T are now introducing plans that include monthly caps or slower service for those who use too much bandwidth at peak hours. Initially, I am sure that there will be some resistance.  People do not tend to like changes that seem to restrict their activities, especially when they are used to unlimited access.

Nonetheless, the vast majority of Americans should be happy about this innovation. Under the existing system, if a few heavy users increase bandwidth demand enough to drive up prices or force companies to create more infrastructure, everyone except those few users is worse off. Either prices must be raised to support new infrastructure with higher capacity or service will be slowed because of too much information. By charging people according to their usage, Americans can decide for themselves how much internet access they want to pay for. The relevant trade-off is not between unlimited and restricted access at the current prices; rather, it is between higher rates and slower service for everyone, or a choice among packages that lets us pay more only if we want extra access. The result will be a fairer distribution of the costs and benefits of the internet, with those who use it most paying their fair share.