Tiered broadband – Not because they have to but because they can

Steven Hodson - Author

Jun. 15 2013, Updated 9:17 p.m. ET

There is this inane belief that at some point the Internet will be everywhere accessible 24/7 no matter where you are or what device you might be using. Everything will be streaming video and instantaneous news all weaved together by the ever increasing real time web.

It’s an illusion. A nice illusion but an illusion all the same.

AS much as we might want this to become a reality the truth is that as long as broadband access is controlled by companies like AT&T, Verizon, Comcast, or TimeWarner we will not see that dream. The simple reason is that in order to have that kind of Internet we must have always on access with out any kind of restrictions over speed or usage.

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Except this isn’t what these companies want because by providing such a service they won’t continue making the enormous profits that they are and neither would they be able to continue to pull the wool over regulator eyes and padding their pockets with whatever hand-outs they can finagle for themselves.

It is interesting that at the same time that we are starting to see the speeds that can truly provide high quality streaming video of a quality that makes it worth watching these companies are trying to bring in tiered access. Under the guise of supposed customer service of providing access at a price anyone can afford these providers are setting us all up for either over-priced premium services or hidden surcharges that will inevitably show up on our bills as we move to an Internet based video entertainment lifestyle.

Stacey Higginbotham has a good post at GigaOM today where she raised the point of tiered services with Brian Whitton, executive director of access technologies at Verizon.

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Why would Verizon, which is building out a fiber-to-the-home network, plan to eventually move to some sort of consumption model?

The answer is because it can. I spoke with Brian Whitton, executive director of access technologies at Verizon, about the FiOS network in an effort to get some clarity regarding the rumor that even it would eventually face constraints under the onslaught of video. Whitton quickly disabused me of that notion, pointing out that the network is built to be upgradeable for decades to come by replacing electronics at the ends of the pipe. He basically told me that Verizon didn’t spend $18 billion (it spent $23 billion in total but some of that would have been spent anyhow) in additional upgrades to its network only to rip it out a few years later, and explained how the fiber stretches from the customer home all the way back to the fiber-based long-haul network.

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So any notion that these tiered services are because of a pending network congestion of video traffic is basically bullshit. It is because the providers have found that the majority of people don’t understand that streaming video counts against any caps you might have on a tiered account. As well we have the problem of increasing straight downloads of video with its incredible large file size – that will only get larger as video quality goes up – can eat up your account faster than you can shake a stick at.

This idea of tiered service has nothing to do with network capabilities but everything with lack of true competition and using any trick possible to increase profit margins at the expense of consumers for whom the Internet is becoming more of a necessity than a luxury.


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