Digital Home Thoughts: Netflix Criticizes ISP Nickel and Diming

"Wired ISPs have large fixed costs of building and maintaining their last mile network of residential cable and fiber. The ISPs’ costs, however, to deliver a marginal gigabyte, which is about an hour of viewing, from one of our regional interchange points over their last mile wired network to the consumer is less than a penny, and falling, so there is no reason that pay-per-gigabyte is economically necessary. Moreover, at $1 per gigabyte over wired networks, it would be grossly overpriced."

The battle over how you access your Internet seems like it will never end. Data caps in Canada (and the US) are quite common, meaning that services like Netflix are in a difficult position. Streaming movies adds a considerable amount of convenience since you have access to a large library (sometimes) of videos to watch. However, data transfer caps and overage fees can make such luxuries impractical.

When Netflix announced they were opening to Canadian customers, Canadian ISPs immediately announced they were lowering their caps. Now with Usage Based Billing seeming to become a reality, it seems like services that are data heavy may be few and far between. Resellers like Primus, who previously offered unlimited DSL has placed a 25GB data cap on their service. Anything over and you pay overage fees at rather impressive rates. On top of that, certain types of Internet traffic are still being shaped.

Sadly, it seems that at least for some places, it looks like there is plenty of potential for your Internet costs to go up, or be forced to limit your activity as companies seek to squeeze even higher profits backed by regulatory authorities.