It has been just over 6 years since Ed Whitacre, then CEO of AT&T, kicked off the Network Neutrality movement by famously declaring that rival services would not “use my pipes for free,” neatly side stepping the fact that customers were actually paying to “use [his] pipes” already. Because why just collect money from one side of a platform when you can collect the same money again from the other side? Well, it appears that AT&T may finally be on the verge of realizing Whitacre’s vision — at least for the wireless world. While details remain sparse, the Wall St. Journal broke a story yesterday that AT&T may “allow” application providers to pay the overage charges for customers who exceed AT&T’s arbitrary “bandwidth cap.” As my colleague John Bergmeyer pointed out over at Public Knowledge there is not much functional difference between simply charging both sides of the platform directly and giving you the first 2 GB/month and then charging you for access.
I first wrote about the problem of “Whitacre Tiering” (having a “slow lane” for the “public internet” and a “fast lane/Quality of Service (QoS)” for favored content) in the wireline context almost 6 years ago today, back when AT&T (and other supporters of such schemes) used “the exaflood” as the reason why we absolutely positively must charge service providers to reach broadband subscribers. Remember the “exaflood,” the prediction that our broadband systems would crash under the ever-rising flood of data as users, unconstrained by metered pricing, outstripped the capacity of broadband systems? Except, of course, it didn’t happen. Cable operators developed DOCSIS 3.0, DSL providers figured out how to do better, and those stuck with ruinous backhaul charges figured out other ways to manage their networks (generally in cooperation with users).
Moving to the wireless universe, we find ourselves with similar arguments that we faced six years ago — including the wireless version of the “exaflood.” Below, I consider whether the arguments for wireless make any better sense than they did when Whitacre proposed it for wireline back in October 2005.
More below . . . .

Tales of the Sausage Factory
But Why Time Warner Cable’s Bandwidth Cap May Be A Good Thing. See How Complicated This Is?
So no sooner do I cast a very suspicious eye over AT&T Wireless’ new scheme to allow ap developers to pay the overage charges for users who exceed their 2 GB monthly cap when I see that Time Warner Cable (TWC) is now offering an “Internet Essentials” plan in some test markets in Texas. Customers who opt into the new 5GB/month metered plan will receive a discount. TWC also includes a meter so customers can monitor their use. Finally, customers in the metered plan can easily pay more to get more access.
While this is just a first reaction based on the TWC description, I have to say this is the kind of “metered usage” program I really like. In fact, this looks like an excellent product offering (albeit not for an ‘power user’ like myself.). I salute TWC for listening to its customers and offering something different and innovative.
So what’s so good about this metered program but I remain suspicious of other “usage based billing plans? I answer below . . .
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