Avoiding Net traffic tie-ups could cost you in future

— -- Back in the days of dial-up, Internet users were content to watch text download onto screens, one excruciating line at a time.

Nowadays, people get annoyed if they have to wait more than a few seconds for downloads to their PCs, laptops or mobile devices. They also want Hollywood-quality video feeds for everything from TV shows and blogs to breaking news.

"People's expectations of the Internet have changed significantly," says Imran Shah, co-founder and managing partner of IBB Consulting in Boston. "As soon as they click, they expect video to be a seamless experience."

The good news for consumers is that the Web is awash with cool new applications — such as high-definition video — that tap into the power and reach of the Internet. The bad news: Net obsession in the future could cost you.

AT&T t and Verizon vz have spent more than $70 billion in the past two years to expand capacity and fortify their networks with optical technology and other capacity-enhancing gear. Consumers will ultimately foot the bill. Trying to get broadband costs and revenue in line, some carriers are eyeing Internet service plans that charge by the megabyte. That could set the stage, eventually, for the end of Web plans that are priced on speed instead of actual consumption, which is now the case.

The basic problem: Consumers are becoming enamored with applications such as streaming high-definition video that eat up a lot of bandwidth. It was OK so long as those applications were on the fringe, with few users. But pressure on broadband networks ratchets up significantly once millions of people start engaging in bandwidth-intensive activities simultaneously, says Suraj Shetty, a senior director at Cisco, the big equipment maker.

Pushing the trend along, he says, is the explosion of digital cameras and other Web-enabled devices. Peer-to-peer services, which give users a cheap way to share, steal and borrow files from computers worldwide, are another a factor, he says. More than 60% of Web traffic is generated by peer-to-peer computing. "These are the challenges of the 21st century," Shetty says.

Paying for what you use

By 2010, the average household will be using 1.1 terabytes (roughly equal to 1,000 copies of the Encyclopedia Britannica) of bandwidth a month, according to an estimate by the Internet Innovation Alliance in Washington, D.C. At that level, it says, 20 homes would generate more traffic than the entire Internet did in 1995.

Larry Irving, co-chair of the alliance, which supports the spread of broadband, says it's only fair for consumers to pay for the bandwidth they use. "If you use more electricity, you pay for more electricity," he says. "This is no different." Right now, most Internet-access plans are priced by speed — faster plans cost more; slower ones are cheaper.

Consumer advocate Gene Kimmelman, public policy director of Consumers Union, says the issue isn't whether consumers should pay more, it's how carriers manage their bandwidth. Some carriers "could double or triple their Internet capacity if they cut down on their video-on-demand" offerings, he says.

That debate aside, Internet providers are starting to dabble with consumption-based subscription plans as consumers increasingly want access to the Web anytime, from any location.

Bracing for that reality, Verizon Wireless last month unveiled two monthly plans that charge by the megabyte for mobile broadband access — $39.99 for 50 megabytes and $59.99 for 5 gigabytes. Verizon says the plans offer ample bandwidth for most users. The 50-MB monthly plan is enough to handle 17,000 e-mails; the other can cover 1.7 million e-mails. The service is popular among business travelers; customers purchase a special modem that snaps into a laptop for an on-the-go Internet connection.

Customers who opt for the lower-price bucket will pay $1 for each additional megabyte; customers in the other plan pay 50 cents. Verizon says it has no plans to reprice its DSL services, which are used by 6.7 million residential and small-business customers.

Richard Lynch, Verizon's chief technology officer, says the new approach was designed with high-bandwidth users in mind. "It essentially lets you have all (the bandwidth) you want, as long as you help pay for it." The plans, he says, are also Verizon's way of putting bandwidth hogs on notice. "If a couple of guys are hogging the entirety of the network, we think they should pay."

You'll get no argument from Rogers Communications, which provides high-speed data services to 1.5 million customers in Canada. A few years ago, Rogers instituted bandwidth caps for high-speed customers. Caps are generous — 95 gigabytes for the most expensive plan, which costs $99.95 a month. The cheapest offers 2 gigabytes of bandwidth a month for $24.99.

Rogers recently started charging fees to those who exceed their monthly allotments. It also offers an online tool that customers can use to see how much bandwidth they're using. Strategy chief Michael Lee says Rogers is trying to sensitize customers to the fact that broadband capacity isn't unlimited, or free.

Peer-to-peer computing presents a special challenge, he says. "You can never put in enough capacity to satisfy the behavior."

Consumer addiction to the Internet is a double-edge sword for carriers. They stand to reap billions from additional data revenue. But they must spend heavily to add new capacity to stay ahead of demand.

In the rarefied world of high-speed networks, nothing is ever simple or cheap. Add too much capacity in the wrong place, and it will sit idle, with no hope of recovering its costs. Add too little, and a network will surely crash at the first hint of congestion, angering customers and regulators.

To avoid slowdowns, carriers have to manage their networks carefully, says Philippe Morin, a division president at Nortel, nt the big Canadian equipment maker. Otherwise, he says, "The user experience could go back to what we had with dial-up."

As for prioritizing traffic — a basic tool used by carriers for decades to maximize network efficiency — that's turned into a political sinkhole.

Under the banner of "net neutrality," Internet players such as Google goog argue that all digital bits are created equal and should be treated the same. In other words, transmission of a medical file to an emergency room doctor should be treated the same as, say, a Web search for Italian restaurants.

Morin says "net neutrality" has no meaning in the context of broadband networks, which are huge and exceedingly complex. Such networks, he says, are engineered to make optimum use of existing capacity — traffic is prioritized and shifted constantly to maintain smooth traffic flows. "Networks are managed," Morin says. "This concept of an unmanaged network, it's much more of a theory."

Video is the biggest driver of bandwidth consumption, by far. Online video-viewing soared 66% in the USA in February from a year earlier, according to market tracker ComScore.

Video site YouTube reflects the trend. It fields 100 million video downloads and 65 million video uploads daily. And a high-definition video-streaming option is on the way. Once that happens, high-definition video will go mainstream, Morin predicts.

The problem: High-definition video is the Humvee of broadband, guzzling five times as much capacity as regular video. Once high-definition video takes off, bandwidth consumption, now at a record high, could blow into the stratosphere, Morin says.

"We're into a new world now," he says. "Bandwidth planning for the peak of Mother's Day (calling) just doesn't work any more."

Caught off guard?

Vint Cerf, chief Internet evangelist for Google — that's his real title — says capacity constraints are just an excuse for carriers to squeeze customers.

Cerf's solution: a cap on speed, not usage. He says it makes more sense for consumers to pay for a maximum rate of transmission. As for the peer-to-peer problem, Cerf doesn't disagree that it eats up a lot of broadband capacity — maybe too much.

"It needs better engineering," says Cerf, one of the original architects of the technical protocols that led to the formation of the Internet. Cerf says the computing protocols that drive peer-to-peer services could easily be altered to make them more bandwidth-efficient.

But network capacity is the real issue, he says. Cerf thinks a lot of carriers were simply caught off guard by the explosion in Web usage, which is why they're running so hard now to catch up.

"Doubling (capacity) isn't enough," he says, not with bandwidth-sapping applications such as high-definition video headed their way. "These various attempts to constrain consumer demand … are a reflection of limited capacity and oversubscription."

Easy for Google to say, says Sprint's network chief, Kathy Walker. The Web giant doesn't have to plan, install, finance and maintain high-speed broadband networks that support millions of users. Nor does it have to worry about "the individual subscriber experience."

To ensure that consumers have a good Web experience, she says Sprint spends an awful lot of time on issues such as security, privacy and, yes, network capacity — making sure there's plenty for all the bandwidth-crunching applications that are gaining popularity. That said, "We have a finite amount of capital to deploy. It's a constant balancing act."