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When "free" is no longer free
From: David Farber <dave () farber net>
Date: Sun, 3 Aug 2008 12:09:34 -0400

Begin forwarded message:

From: dewayne () warpspeed com (Dewayne Hendricks)
Date: August 1, 2008 9:12:53 AM EDT
To: Dewayne-Net Technology List <xyzzy () warpspeed com>
Subject: [Dewayne-Net] When "free" is no longer free


With its pending decision to censure Comcast over its network- management practices, the Federal Communications Commission could be planting the seed for an interesting natural experiment on the economics of "piracy". On Comcast's earnings call COO Steven Burke said the company "disagrees" with the apparent decision but added, "we're going to adjust our network management techniques to go to a bit more of a consumption-based model." In other words, charging by the bit, as Time Warner Cable is now testing in a few markets. While Time Warner launched its tiered-pricing test on its own initiative, heightened scrutiny of ISPs' network-management practices by the FCC could turn the Time Warner test into a trend, as Burke's comment suggests. One effect of that trend would be to pass some of the bandwidth costs associated with P2P file-sharing on to those who are actually engaging in it, whether legally or illegally. The upshot could be the "free" is no longer so free. "Piracy" would start to have a price (of sorts).

[ and competition to Video on Demand will vanish djf]


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