European ISPs Monitor Broadband

UNITED KINGDOM – At a time when cutting costs associated with broadband service is on every telecomm and Internet Service Provider's (ISP) mind, the idea of offering price points based on the amount of data uploaded and downloaded from the Internet has taken off in Europe and might soon become a new trend in the U.S.

According to a recent study conducted by Jupiter Media, Norway's Telenor and Telekom Austria already base their monthly broadband fees not on speed, but on data volume, and Germany-based T-Online offers a set fee for usage that is limited to one Gigabyte per month, and tacks on an extra fee for every additional Megabyte used.

Jupiter says that in an effort to limit the amount of bandwidth-hogging that occurs with file-sharers, some European providers deliberately offer low upload speeds to discourage excessive file exchanges with popular peer-to-peer networks and services.

Additionally, Jupiter reports, broadband providers like T-Online and Telekom Austria offer download speeds of 768 kbps, but uploads as slow as 128 kbps.

Typically, a large majority of file uploads come from U.S.-based servers, the study says, which means that European ISPs get hit with an international broadband fee every time their users interact overseas.

When this new price point strategy will take off in the U.S. is still anyone's guess, say industry analysts, regardless of its growing acceptance in Europe.

A central point in Jupiter's study is user acceptance of this new business model and how in countries where computer users are relatively new to the wonders of high-speed access these fee rates are more likely to be adopted. But among more tech-savvy, younger users, the response is often negative.

According to Jupiter, only 5 percent of Internet newbies said they would consider changing broadband providers if a data-based fee was implemented into their service plan. Whereas, eleven percent of respondents that had been using the Internet for three or more years said they would consider changing broadband providers in order to avoid the price point.

Jupiter recommends that the more options presented to users, the less likely it is that they will migrate to other providers, in particular tiered pricing rates that offer the same speed but different data capacity levels.

"This would appeal to newer users looking for a low-commitment way to experiment with broadband, as well as those 'frequent waders' who use broadband frequently, but only for brief sessions," says Jupiter.