Update: A few more hysterical commentators appear to think I've been 'paid off' or something, to address that concern please read a new last paragraph.

I see that the mainstream press has picked up the "blogging" condemnation of the Time Warner experiment with tiered pricing, and usage caps. My own view on this probably counts for little but since dslreports.com is a "blog" as well perhaps I should set out my view for the record: Caps and tiered prices are overdue. The backlash against them at best misrepresents technical issues, and at worst is self-serving.

Clean fast bandwidth is not an inexhaustible resource. I want my ISP to deliver maximum speed without any perceptible congestion, and with minimal latency. I want them to invest heavily in their infrastructure to ensure they can meet the speed and latency targets morning noon and night. When an ISP engineer says that metering and caps are necessary for quality service, I believe them. Any customer of a data center understands the equation: they understand that BOTH speed and monthly usage are key factors in pricing. US ISPs, due to inheriting dial-up pricing plans (effectively included caps due to very low speeds) have been missing one pricing factor, to the detriment of the majority of users and the benefit to a minority.

The argument from good business sense:

If an ISP offers true un-metered bandwidth to any customer who pays the monthly fixed rate then sooner or later the ISP is going to degrade service to all users in order to cope with demand. Any ISP that truly does not currently meter bandwidth usage is simply lucky that their current mix of users fits within their infrastructure capability but that situation is temporary and unstable. Sooner or later as the customers party on fixed prices they will either have to increase their prices overall, degrade their service, or start to meter and deny service to some. I think it is no secret that all large broadband providers have introduced secret usage caps of one kind or another. These are undoubtedly applied arbitrarily as and when the ISP feels their infrastructure stability is challenged. I prefer to be a customer of an ISP that openly advertises that it has caps, describes what they are, and offers price plans if higher monthly usage is necessary.

The argument from security awareness:

If bandwidth is treated as unlimited, and free, there is a diminished incentive to secure wifi networks and keep ones PC uninfected. This site has been a past victim of distributed denial of service attacks from networks of PCs that are probably on un-metered or poorly metered broadband plans. When ISPs clearly identify to subscribers that bandwidth is not free then, as if by magic, wifi networks are secured with a password and - I believe - PC security awareness increases. Faced with the possibility of eating ones allowance and getting capped to an almost unusably slow speed a subscriber will pay more attention to articles on anti-virus products and protect their account against bandwidth-leaching applications such as malware and spyware.

The argument from product flexibility

In australia, which has had usage caps from the get-go, I can get ADSL2 and higher speeds than in most of the US. I think this is because offering speeds as high as technology will allow is safe when subscribers are unable to run it full bore all day and night. I would rather have a low latency 100 mbit product with usage caps or overage charges than a 4 mbit product that is unlimited. The horror of public usage caps in the US has probably hindered roll-out of the fastest tech. If pricing is allowed to correctly reflect usage then I expect some ISPs will feel more comfortable with offering faster lines.

The counter argument

The main counter argument I can discern appears to be that caps will hobble new data heavy internet applications. The usual example of such a hobbled application is downloading movies from itunes (one of the few legal sources for such large files. However I doubt that the majority of metering critics are thinking of their itunes purchases when hammering their argument).

In my opinion the recognition that gigabytes of data are not free is actually a positive for advanced applications. It is much easier to plan, price and roll out a broadband product when the architect is aware of current pricing, and not scared of hidden caps. If there is big demand for 200+ gigabyte consumer products then I expect ISPs will be motivated to respond with fairly priced packages to suit. Caps will encourage such viable "heavy" services as ISPs can offer edge caches and other partnerships that make them faster and more reliable. If itunes movie downloading is the wave of the future, but caps (pricing) stands in its way, then an "itunes2" can partner with an ISP to cache their data within the ISP and therefore offer it un-metered. If they can't do that then perhaps the product is just not yet viable.

The elephant in the room

The majority of people likely to strike the kind of caps proposed by Time Warner in their trial, or who are running afoul of existing hidden caps, are using bittorrent to get copies of movies, anime, software and TV shows for free. For popular torrents - almost exclusively pirate titles - they are not just getting close to maxing out their download speed they are also maxing out their upload speed. And they are queuing up enough content to run their connections for days on end.

Regardless of the legality of this, just one of this type of user has a "footprint" within an ISP of 100 or more regular subscribers. They are also the more tech savvy users, the most actively involved in forums, blogs and online user groups. It stands to reason that they will be the most vocal critics of "user pays". I can understand that, it is difficult to give up such a windfall. If a big bittorrent user had to buy the capacity they currently use at home, at any data center, they would pay heavily for it. Getting it for $50 a month fixed price has been a bonanza for their hard drive. A bonanza that will inevitably be curtailed.

How this will pan out

I suspect caps and tiered prices for usage will spread rapidly. ISPs (where there is competition!) should be able to compete with each other by offering more generous allowances. The small group of users who find caps or increased prices impossible to live with will migrate to whatever ISP appears to offer all-you-can-eat gigabytes, but this will only push that ISP to similar open caps.

Eventually the market for secret traffic shapers and other nastiness will go away, and that will be a welcome result of pricing bytes properly.

ISPs have an obligation as they introduce caps. How about mirroring popular URLs within their network transparently, and then not charging for access to this data, or making deals with big content producers to cache data. ISPs that innovate to ensure caps are not a problem for the vast majority of users should be rewarded by subscribers.

If the marketplace for broadband were truly competitive the change to correct pricing would be smooth but given the locks some large providers have on their audiences I expect there will be many hiccups along the way and user groups will have to continue to work online to keep the big telcos and cable companies honest.

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Added to this editorial:

I've had a couple of personal messages accusing me of selling out to Comcast, or sounding 'like a press release'. Well, this site has been my full time occupation for 9 years now, and now and again someone gets so upset that they accuse the moderators, myself, or "the site" of taking money to protect the interests of an ISP. Of course this has never been the case. One of the reasons we only run lower paying google adsense network ads is so ISPs cannot squeeze us with the threat of withdrawing revenue.

I'm not in the industry merry go round of shmoozing for quotes or scoops, nobody in business has my phone number, or has the slightest leverage over me or the site. Our income here is almost exclusively google adsense, no sponsorship deals, no promotions, few and very peripheral special relationships. How many other popular sites need such little income from the industry side?

My opinion is expressed in the title of this piece: caps (and/or metered usage) is the right thing if they are structured to meet the needs (of the majority). I've no opinion whether any existing or proposed caps are suitable. I am just of the opinion that all-you-can-eat isn't working too well, isn't a sensible way to sell access.

Unfortunately the minority of subscribers who are going to have to adapt their usage to stay within caps or tiers are the most active online, the most technical, and the most likely to be following and commentating on the story as it develops. I could be like some other bloggers I've seen recently and pander exclusively to that audience for virtual diggs, but that would be the real dishonesty, the real sell out.