Why Data Caps Will Kill the Cloud, Online Video

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As we zoom toward an always-connected future, the same Internet service providers that should be moving us forward are trying their best to hold us back. By imposing stiff bandwidth caps and punitive overage fees, providers are forcing users to think twice about every piece of content they consume and every cloud service they use. The results could have a chilling effect on both media companies and software providers.

Low Limits, High Costs for Bandwidth

Just this week, AT&T announced that its DSL customers would have to abide by a 150GB per month cap or pay a $10 penalty for each additional 50GB of transfers. While that sounds like a lot of data at first glance, it only accounts for about 3 hours a day of HD video viewing, as watching a typical two-hour HD movie on Netflix uses about 3.6GB. And that's before you do a full online backup of your 320GB hard drive, call the family on Skype HD, check your e-mail, surf the web, and download that new 5GB MMO you've been dying to play.

Those numbers loom a lot larger on mobile broadband where the caps are far lower. For example, Verizon Wireless charges $50 a month for just 5GB on its LTE data plan or $80 for 10GB.  T-Mobile just announced an $85 for 10GB per month plan for its 4G network . If you exceed those rates, T-Mobile slows your connection, and Verizon charges you a whopping $10 per GB overage fee. When it comes to handsets, Verizon still has a $30 unlimited data plan, but has promised to end it in the near future. Clear and Sprint are the only carriers who offer truly unlimited 4G bandwidth for both handset and notebook users, but you have to wonder how long they will continue that pricing plan when all of their competitors are instituting caps.No More Casual TV Viewing

No matter what the size of your data cap, you now have to think carefully about everything you watch online. If you're a home user, even a high cap means you simply cannot cut the cable cord unless you don't watch that much television. And there's little chance you'll choose to eat up your bandwidth allotment watching a program unless you really want to give it your full attention.

The fear of exceeding bandwidth limits could fundamentally change the way we think about TV viewing. Many people, myself included, like to have TV on in the background while they're doing something else. There are many shows and even entire channels that I'll watch out of the corner of my eye while I'm working on my computer, but I'd never stop what I was doing and give my undivided attention for a full two hours. Would you pay $10 per GB in overage fees to watch an episode of Cops, three hours of senate debate on CSPAN, or the full two hours of Mansquito? Would you even use 2 or 3 percent of your monthly home broadband allotment on an hour or two of those shows?

Just think about the chilling effect that cautious viewers could have on programming if the unlimited world of cable and satellite were replaced with metered Internet programming. Would anyone even produce cheesy reality shows such as Hoarders or straight-to-tape movies such as Dolph Lundgren's Killing Machine if people had to think twice about paying the bandwidth charges to watch them? Or would everyone start watching things in standard def, just to save gigabytes?

Cloud Computing: Maybe Not

What happens to cloud services when their users have to watch every byte? Would you perform a complete online system backup if you knew it would eat up most of your monthly broadband allotment? Would you even think about syncing or sharing 2GB of vacation photos and videos while you're still on the road?

If you buy software online, bandwidth caps make you pay for it twice—once for the application itself and a second time for the bandwidth to download its install. For example, EA's Dragon Age II costs $60, and if you download the game over LTE, its 6.5GB install file could run you as much as $65 in bandwidth overage fees! Bandwidth-conscious users may even start worrying about doing routine downloads such as Windows updates from the road. The latest Windows 7 service pack clocks in at nearly 1GB all by itself.

Net Neutrality: Paying On Both Ends

If it's not bad enough that ISPs are punishing their own subscribers for using the bandwidth they need to consume content, buy software, and access cloud services, the same companies want to charge content providers, too. Right now, Comcast is in a very public fight with Level 3, the company that serves Netflix's video streams, because the ISP wants Level 3 to pay for serving videos to the same subscribers who are paying for bandwidth to receive them. If this holds up, Netflix will be forced to pass these fees along to their subscribers, effectively making them pay their ISP twice to watch the same movie.

How to Stop the Caps

While the FCC's authority to regulate net neutrality issues such as the Comcast vs. Level 3 dispute is in question, there's no form of consumer protection against broadband caps and overage fees. However, there's always the court of public opinion, and that's where we all need to change the way we talk about bandwidth caps.

Too many times, journalists who write about this issue parrot broadband industry talking points by calling users "data hogs" for taking full advantage of "all-you-can-eat" Internet services. Unfortunately, as Jesse Brown of Macleans notes, today's typical usage patterns were yesterday's excesses.

If we can change the conversation from one which insults consumers to one which empowers them, we can change the stakes of the game and encourage providers to offer the best and cheapest bandwidth instead of trying to take a piece of the action at every turn. The stakes for the future of entertainment, computing, and commerce are much too high to just let this slide.

Author Bio
Avram Piltch
Avram Piltch, LAPTOP Online Editorial Director
The official Geeks Geek, as his weekly column is titled, Avram Piltch has guided the editorial and production of Laptopmag.com since 2007. With his technical knowledge and passion for testing, Avram programmed several of LAPTOP's real-world benchmarks, including the LAPTOP Battery Test. He holds a master’s degree in English from NYU.
Avram Piltch, LAPTOP Online Editorial Director on
Add a comment
  • Gregg Says:

    I think one way to stop bandwidth caps, is for the content providers to steer customers away from capped internet providers. If say, Netflix was to have on their front page as a requirement, "Recommended, an unmetered broadband connection." with a side note listing specific ISP it doesn't recommend for its service, and maybe another list of ones it does, maybe metered internet might become less cost effective.

  • Felisa Mcgilvery Says:

    You forgot wuala I guess. Encrypted before sending, no way for the storage provider to decrypt it on its own if you don't make your folder / files public. And they don't store your password anywhere.

  • Giovanna Gabriel Says:

    My favorite cloud service sugarsync.5 GB free.

  • Josue Funderburk Says:

    I see.. I am always curious to see what people are using etc. I don't know a whole lot about them but I have heard of them. One more thing I will have to learn a little bit about now. Thanks

  • will Says:

    Welcome to the age of bend over plans.
    It's not about bandwidth,it's about boosting profit and creating monoploies.
    Thanks FCC,Thanks EuroBama,Thanks people who don't care enough to say no!

  • Alessandro Viani Says:

    I completely agree with this article. I've been saying this for a while. With all the emphasis on HD video, streaming, and cloud storage, the internet providers impose data caps. An SD 1 hour TV show on iTunes is about 600MB. Watching a few hours on Hulu or Netflix could easily blown through 4GB in a day; and that's just with video! In SD! Note to price gouging ISPs, pirates aren't the only one's who use bandwidth.

  • Andrew Says:

    How long do they plan to do this? When are 'cable' and 'scheduled television' going to finally die. I plan to have my own place one day with ONLY internet but I don't want to put up with this bulls*it. How can I circumvent this?

  • Greg Says:

    This article is so funny! For a 1 GB cap / month in my country I have to pay $30, and overage is about $1 for every 3.5 MB. Yes, you read that right, it's approximately $300 for 1 GB once you're over the limit.

    DSL is available, but including line rentals it works out to about $70 for 5 GB, and then $5 for every 1 GB after that.

    It's at least getting more affordable, but you're still in a much better position than we'll be for years.

  • charles Says:

    Wow! it seems all these big companies are attacking the consumer. You already have to pay regular cell minutes charged extra for data, texting, or what speical feature they come with and decide put a charge on it. All that and now on to cap things off. The only message to these companies will see if millions of people cancel the services making them loose money fast!!!! Unfortunately we have become slaves to the technology around us and the people control it and do what ever unless drastratic changes come into play. We really forget there is strength in numbers.

  • Avram Piltch Says:

    @Michael. Wow! What plan gives you a 425MB cap?

  • Michael Says:

    This is already true on HughesNet. I am afraid to download windows updates on multiple computers per day, since for $80 per month, we are given 425 MB combined upload and download, 800 Kbps down and 250 Kbps up. You CAN'T watch HD video online, and if you are patient enough to queue it up on YouTube and wait, you may be slowed down to slower-than-dialup speeds. Even watching too many standard-def videos when other people in the household are browsing can exceed the cap. It's ridiculous...

    The worst part is that Comcast comes part of the way down my road, but not to us. So close, yet so far...

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