Why You Don't Want Tiered Internet Costs

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The FCC is closing in on a final vote on a net neutrality policy that endorses Verizon, Comcast and other carriers' argument that tiered Internet service contracts would benefit both consumers and carriers.

Carriers would be able to charge more for bandwidth hogs like Android users and Netflix content. Consumers or businesses would be able to choose the tier of service they need -- not pay for more than they want or be corralled into a low-bandwidth free tier that doesn't give them the application performance they need.

Except... the tiers carriers are talking about start pretty high -- the minimum you could pay is likely to be about the amount you're paying now for the bandwidth and quality of service you want. Anything more would come with big costs.

"Tiered pricing" in this case is less like a set of comfortable stairs and more like a ladder you could easily climb if the first rung weren't far above your head.

If carriers offered a real tiered pricing structure, many consumers would ring in for a dirt-cheap Internet rate that lets them check email and look at a few YouTube videos at a little more than DSL speed. Rather than take that revenue hit, carriers want a flat rate they can charge everyone, impose usage caps to keep them from having to upgrade networks too quickly, and add premium-tier costs on top of that.

It sounds like all benefit, no risk for the carriers, exactly the opposite for the rest of us.

Comcast has tried tiered pricing informally, even if you don't include its recent extortion of a high-bandwidth toll on Netflix and its partner Level 3 Communications. Time Warner tried it in 2009, charging $5 per gigabyte above set limits.

The cost and policy were chased off the board by angry customers.

With a few exceptions from those with business entanglements with carriers, or content-streaming ambitions of their own, almost every consumer advocate or end user who has weighed in on the debate has called it tiered pricing a rip off.

If you're a business that relies on high-performance from apps that run across a portion of the public Internet, it makes complete sense that you would want to be able to pay for higher bandwidth and a higher quality of service.

You can do that now, with no trouble. Don't even call your carrier. Just whisper somewhere near a networked node that you want to buy a new service plan and your phone will start to ring with calls from customer-service and sales reps.

There's no reason to let carriers or other vendors put you in a position in which the charges are supposed to change with your level of use, then sign on for a plan whose costs have a solid floor, no ceiling, and automated ways to ratchet themselves up without your even having to know.

"Tiered pricing" sounds pretty reasonable when you think about the amount of development you'd have to do to build similar networks, the level of service you want and the extremely small window of opportunity you might have to make a networked project work.

Paying a little more to get a remote-hosted desktop virtualization project off the ground might be worth it.

It isn't; not if Google and Verizon and Comcast and Time Warner get to decide what the minimum costs are that you'd pay, and squeeze you every time you go above whatever minimum levels of service they set.

And remember, over time, "minimum" levels of service tend to decline because they're the minimum. If the service you get now is good for the amount you spend, that's great. In two years, that ratio may have changed radically and you won't be able to do a thing about it.

Kevin Fogarty writes about enterprise IT for ITworld. Follow him on Twitter @KevinFogarty.

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