It started as murmurs that some heavy internet users were being handcuffed by their internet service providers.  But with today’s New York Times article by Brian Stelter, “Charging by the Byte to Curb Internet Traffic”, the murmurs are quickly becoming a roar.  Bandwidth limits and surcharges are coming, and they pose a geniuine threat to the development of video marketing on the web:

“…now three of the country’s largest Internet service providers are threatening to clamp down on their most active subscribers by placing monthly limits on their online activity.

One of them, Time Warner Cable, began a trial of “Internet metering” in one Texas city early this month, asking customers to select a monthly plan and pay surcharges when they exceed their bandwidth limit. The idea is that people who use the network more heavily should pay more, the way they do for water, electricity, or, in many cases, cellphone minutes.

That same week, Comcast said that it would expand on a strategy it uses to manage Internet traffic: slowing down the connections of the heaviest users, so-called bandwidth hogs, at peak times.

AT&T also said Thursday that limits on heavy use were inevitable and that it was considering pricing based on data volume. “Based on current trends, total bandwidth in the AT&T network will increase by four times over the next three years,” the company said in a statement.

All three companies say that placing caps on broadband use will ensure fair access for all users.

I’ve been doing the math for a couple of years, and it’s been clear to me that the excess internet capacity built during the dot-com bubble — once throught to be enough to last another decade or more — is quickly disappearing.  Soon the internet infrastructure companies will need to start building capacity once again, and that means what was once “free” bandwidth at the margin will start costing real dollars.  And that will create an enormous temptation for ISP’s to start charging at the margin for “excess” bandwidth.

The charges aren’t likely to be much, in the great scheme of things.  One plan is to charge about $1 per gigabyte (content providers already pay, typically, about half that amount to put their material out on the web).  The size of a minute of video can vary widely, but across all our clients our average is 4.25 megabytes per minute — or about four hours of video per gigabyte.  (Note that high-definition video can drive this down considerably.)

But in my experience, even small charges can start causing changes in viewer behavior and attitude versus flat-fee, “all you can eat” pricing.  All of a sudden, a web page that loads up lots of graphics and — gulp — video may be resented.  Elaborate Flash ads will be met with icy “you’re making me pay for this?” responses from price-sensitive users.

This is certainly a development worth watching, and we as video producers will need to be sensitive to changes in user behavior as time goes on.  In the end, though, the key is to keep producing high-quality, relevant content that is wanted or needed by the viewers…and to stay away from producing the frivolus, low-quality content that now wastes viewer time and soon will be wasting their money.