MEMORY LANE - The metered Internet: All wet?
The Internet? It’s just invisible bitstreams flowing over pre-existing networks, readily available and easily replenished.
Not long after being appointed superintendent of an Indiana water department in 1895, Edwin Ford discovered a problem: water hogs.
In Hartford City, Ind., residents who used to collect water by filling buckets from outdoor pumps had been introduced to the new modern marvel of piped water that flowed directly into the home. It didn’t take long for some to realize that by keeping a constant stream of water running, they could create a cooling bath for bottles of milk and casks of butter. Why not? It worked, it was inexpensive, and compared to hauling heavy buckets from the town pump, it was a miracle of convenience.
Ford, though, worried that unchecked usage could undermine the city’s water supply economics. His solution was to keep track of how much water each household used and charge in accordance. Residents who were careless about water usage, or who continued to use running water to cool down dairy products, would no longer get away with paying the same fixed amount as moderate users.
Ford devised a climate-proof metering box to measure water consumption in Hartford, and when surrounding towns expressed interest, he began making boxes from his basement. The company he founded, Ford Meter Box Co., still supplies utility metering systems today.
That was more than 100 years ago, but the core presumption Ford made still applies. Absent any disincentive, people generally will tend to consume at a level that meets or exceeds their demand for satisfaction. (Any operator of an all-you-can-eat buffet restaurant can tell you the same.) A corresponding truth is that consumers who are aware that higher consumption leads to higher costs tend to consume less. In the mid-1980s, per capita daily use of water in Los Angeles, where water usage was metered, was about 178 gallons, about half of the estimated per capita usage in then-unmetered Sacramento, according to the Los Angeles Department of Water and Power.
The history of consumption-based billing for water and electricity would seem to provide an apt precedent to inform today’s escalating debates over broadband Internet service. After all, telecommunications providers face essentially the same problem that confronted Indiana’s Ford: the disruption posed by a relatively small number of users who engulf a disproportionate share of resources. Ford’s power users were the people who streamed cold water all day long over bottles of milk. The customers who haunt AT&T Wireless, Comcast and other providers are the enthusiasts who surf the wireless Web incessantly, or move two high-definition movies across the network every night.
But telecommunications companies have resisted making the water and electricity comparison. There are two significant reasons: First, providers are afraid of even tiptoeing near the edges of a utility sector governed by rate regulations and somber state utility commission hearings. Second, declaring kinship with power and water companies stands up an easy target for opponents.
Playing on populist impressions, industry antagonists like to point out that providing electricity or water requires building and maintaining hulking hydroelectric dams and brick-and-mortar aqueducts. The Internet? It’s just invisible bitstreams flowing over pre-existing networks, readily available and easily replenished. Or so they say.
Despite the industrial reticence to play on a long history of consumption-based billing in the utility sector, the analogy to broadband Internet service is legitimate. Not so much from a policy standpoint, but from a behavioral one. Because beyond the rhetoric, one thing is certain: More than a century of exposure to consumption-based billing practices has proven that people tend to be more restrained about usage when they know the meter is running.
That doesn’t mean telecommunications providers should rush to reprise Ford’s inventive idea from 1895. Telecom providers face a world of complications that the Hartford water superintendent did not. Applying metered billing for Internet service invites a high-profile war at a particularly sensitive time, when competition is intense and the FCC is considering a new net neutrality policy, and cable companies are easy targets for charges of attempting to choke growth of a nascent Internet video sector. Time Warner Cable’s 2009 retreat from a test of consumption-based billing indicates how choppy these waters are.
Whether providers move from crude usage caps to more refined metering approaches such as the one used by Canada’s Rogers Cable remains a puzzle. Whether they’re willing to stomach enormous public pressure is unknown. But if they do, they’re guaranteed to see changes in the way customers use their Internet connectivity. Ford proved that a long time ago.