Internet Providers Threaten Price Hikes

As we all become bigger media users online, the providers of your Internet connection are getting worried. Just because the speed of your connection is getting faster, does not mean sending you the videos and mp3s you want are getting cheaper.

Currently, providing the average user around 2 gigabytes of information costs the provider around $1 (US). If the same user downloaded around five TV quality movies in a month, the ISP would spend around $4.50 (US), and that does not include line maintenance fees. While that is still much less than we pay each month, if you increase that again to eight hours of Internet TV a day, the ISP would see their data costs shoot up to $112 (US) a month.

To deal with that, ISPs might put caps on the amount of data that a residential user gets for free, and charge extra if the user goes over. Other options include charging content providers extra for guaranteed delivery. Opponents, on the other hand, believe internet video is still just a small fraction of the total amount of video people watch, and that’s unlikely to change overnight. In fact, they claim, internet traffic has increased much more slowly than the prices of internet-carrying equipment like switches and routers have fallen, and that trend is likely to continue.

I think this is rediculous, as I currently pay around $60 (CDN) a month for a connection that using the figures above, I estimate I use around $9 a month. So if they stop making insane amounts of profit for a while, I don’t think that would be terrible from the end user side. I don’t think they should increase the fees for users as I doubt anyone watches eight hours a day of Internet TV.

ISPs Threaten Price Hikes [Wired]

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