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Metered Broadband Hurts Innovation

Since Comcast announced in the USA that it would start capping bandwidth usage by residential customers to 250gb per month, there have been lots of discussions about how this will affect people and why these companies are doing this (other companies are following suit). Comcast claims that most customers only use 2gb per month so this won’t be a big deal for most but HD video on the web has yet to take off and that will cause bandwidth usage to balloon in the next 2-3 years so I hope that these ISPs will be upping the limit as content consumes more bandwidth.

Since Comcast announced in the USA that it would start capping bandwidth usage by residential customers to 250gb per month, there have been lots of discussions about how this will affect people and why these companies are doing this (other companies are following suit).

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Comcast claims that most customers only use 2gb per month so this won’t be a big deal for most but HD video on the web has yet to take off and that will cause bandwidth usage to balloon in the next 2-3 years so I hope that these ISPs will be upping the limit as content consumes more bandwidth.

The reasons for having caps today however seem lame when it isn’t meant offer tiered pricing with cheaper access for smaller bandwidth. If you only have 1 package, what purpose do caps serve, except:

Comcast doesn’t like you watching shows on sites like Hulu.com.

Metered broadband more importantly really does hurt innovation. We at Realvibez.tv are working on HD content and are planning to purchase our first serious HD videocamera this week.

Caps mean that fewer people would be able to access our HD content because they don’t want to exceed their limit for the month. That means reduced pageviews and video views, which means we need to revise our revenue projections for the HD content downwards.

That affects our incentives to invest in that online video HD technology.

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I wouldn’t be surprised if Comcast turns around and tries to charge websites to not have their content count towards the monthly cap.

That would result in a ton of lawsuits and be the beginning of the end for ‘net neutrality’, something the world wide web was founded on.

Metered broadband wouldn’t be such a big problem if it wasn’t for the current state of the US market – lack of competition is all too common thanks to relaxed acquisition rules. Too many consumers are stuck with no real choice due to the lack of competitors.

People would be able to vote with their wallets under better circumstances.

There are those who say that broadband should be billed like cellular phone minutes, water or electriticy – pay for what you use.

That is a bad analogy and it is much better to compare broadband to television (broadcast or cable) – pay a monthly subscription fee to access as much or as little content as you want.

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Why?

With broadcast television, cable and Internet access, you are bombarded with ads in exchange for content. 

I have told many people that when they start paying for tv by the minute, including the advertising, I will gladly pay for my internet by the gb.

In the meantime, for me to pay for gb downloaded thanks to rich media banner ads loading on websites in order for me to get access to content is ridiculous and no one would ever do that for television, especially cable.

People use pay-per-view or order HBO because they want to avoid advertising. I don’t have that option on the web (well I technically do, thanks to ad-blocker programs).

I predict that metered broadband on a wide scale would be a disincentive for people like me to invest more money in delivering better online video experiences at the same time that video has proven to be a major part of the future of the web.

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It will also result in the exponential rise of ad-blocking software to reduce the amount of bandwidth people use when they surf, especially in Firefox, which makes it so easy to add such programs.

Ad-blockers hurt my business and so sites would have to move to the same model as network television (who are afraid of DVRs) – charge based on the estimated audience size, NOT based on how many people actually saw the ads.

Otherwise a site could easily go bankrupt (most sites are only ad-supported unlike ours).

Read GigaOm’s 10 Things to Know and Hate About Metered Broadband

I don’t care about tiers with caps – that just gets more people to finally get broadband and increases my potential audience (I just have to compete harder for their gigabytes).

I just expect to have tiers that have no caps just like broadcast television and cable. 

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About the author

I am a young entrepreneur who started my first company at 20 during my MBA program at the University of Miami. Our first project was the creation of RealVibes.net, later renamed Realvibez.tv, a leading online destination for Reggae, Dancehall and Soca videos, first launched in February 2002. I am the co-founder of Random Media, an integrated media and entertainment firm focused on Caribbean entertainment and culture, as well as co-founder of Kaizen Interactive, a digital marketing agency. Experience and Achievements - Secured deal for my venture (through the Realvibeztv channel) to become YouTube’s first Caribbean media partner - venture now part of YouTube’s new rental program - Random Media has signed distribution deals for e-book versions of a number of Caribbean books in the Amazon Kindle and Apple iBooks stores - Interviewed numerous times about using social networks for business, previously built up a Facebook fan page for Jamaica to over 55,000 fans in less than 2 years that is now being used by the Jamaica Tourist Board - Asked to endorse a book on entrepreneurship The Toilet Paper Entrepreneur alongside Donny Deutsch, Host of CNBC’s The Big Idea with Donny Deutsch - Contributed a chapter to a McGraw-Hill Publishing book, How To Make Money With YouTube - A judge for Business.com’s What Works For Business contest in 2009 I was born in Kingston, Jamaica, completed his B.Sc

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