Edison's approach was to charge for electricity on a per-bulb basis.
Even after Thomas Edison's introduction of a reliable incandescent light bulb began to spark demand for electricity in the 1880s, something was missing from the electricity equation.
Interest in electrical light alone wouldn't be enough to provoke a build-out of first-generation networks for moving electricity across cities and towns. There had to be proof that the economics of charging for electricity would work to produce an investment return on the laborious task of wiring the community and building the grid.
Edison's approach was to charge for electricity on a per-bulb basis, a thesis that was reflected in the name of his company, the Edison Electric Illuminating Co. of New York. His idea was to make electricity easily affordable, in part so that more people would buy more light bulbs. "We will make electricity so cheap that only the rich will burn candles," Edison is said to have famously pledged.
But power companies perceived a broader array of applications for electricity, and required a different way to get paid than counting bulbs connected to a direct-current electricity network. In order to bill customers for the use of electricity no matter what the application, network operators needed to employ some sort of measurement system that would track how much current customers used. That way, the revenue associated with current could be aligned with consumption, and the company in charge of supplying the power had the motivation to encourage its use.
The induction watt-hour meter that became prevalent in the 1890s filled the bill. By recording the number of rotations made by a metal disk in response to magnetic flux, the watt-hour meter could accurately measure alternating current usage, and companies could charge accordingly. Invented by a Pennsylvania engineer, Oliver Shallenberger, and embraced by the Westinghouse Electric Co., the watt-hour meter was the bridge between the technology of electricity and the business of electricity. Its adoption by Westinghouse launched the onset of the modern electrical grid. By the 1920s, nearly two-thirds of U.S. households had electricity, and to almost all of them was attached an induction watt-hour meter using a fundamental approach that remains widely used (and that spawned a collection of songs and folk lore surrounding the job of meter-reader). Only now are long-anticipated interactive meter systems, which convey usage indicators over a data network to a central collection site, coming to the marketplace with meaningful scale.
Shallenberger, a top student at the Naval Academy at Annapolis, devoted his professional life to the study of electricity after returning from naval service in 1883. Working for the Union Signal and Switch Co. of Pittsburgh – owned by George Westinghouse – Shallenberger observed one evening, in a seemingly random incident, the way a small spring twitched slightly after touching a magnet spool located near a core of wires.
A 1998 American Institute of Electrical Engineers article described the moment: "Before [Shallenberger] left the laboratory that night developed from this accidental suggestion the complete conception of the alternating current meter, an object for which he, as well as many others, had for many months sought in vain."
The idea of metering consumption came so early and was so instrumental in the commercial introduction of electricity that it has never been seriously questioned.
Scrutinizing the monthly electric bill is a ritual for millions of customers who hope to find ways to scrimp. But there is no particular political or social demand for "unlimited" electrical consumption, or any market-induced expectation for it.
A different circumstance confronts broadband Internet providers. By providing ever-escalating data rates and performance for flat monthly fees, cable and telecommunications companies have trained their customers to expect that broadband flows across a broadening array of devices without the intrusion or oversight of usage meters.
That's now changing. In Reno, Nev., and Beaumont, Texas, AT&T and Time Warner Cable, respectively, have introduced trial approaches that measure bandwidth consumption and apply additional fees for those who have exceeded prescribed benchmarks. Other providers have introduced, or are contemplating, related consumption caps that, if exceeded, can trigger fees or penalties.
The common, early reaction by users tends to be shrill and alarmist. But over time it seems certain that the system of supplying broadband Internet connectivity will begin to resemble that of the electrical grid, where charges reflect individual consumption habits. For providers, finding a precedent to point to will be easy. Shallenberger invented it more than 100 years ago, and if you're using electricity right now, it knows.