Paying Too Much To Pay Providers? Get In The Slow Lane

Maybe we should all get into the fast lane -- even for TV.

In a radical policy change, the FCC may allow Internet service providers (ISPs) -- like Comcast, Time Warner, AT&T and Verizon -- to make deals giving faster download speeds to big content providers.

Earlier this year, a Federal court struck down the FCC’s net neutrality rules, which had kept ISPs from slowing or blocking access to certain websites.

A changed policy might raise again the issue of consumer Internet usage. If ISPs get their way, not only would Netflix and others have to pay more but, perhaps in turn, consumers who are heavy users of their content.

Netflix has already struck a related deal for a more direct connection with Comcast.

What would happen if such deals applied not just to usage of the Internet, but to say overall TV usage? If a very light viewer watches three hours of programming a week and someone else 20-plus hours, logic would say the latter should pay more.



But that’s not how it works. For as long as there has been a pay TV industry, it has mostly meant an “all-you-can-eat” consumer product that’s easier to market.

Will this remain the same in the coming years? Perhaps pay TV will become a la carte.  But price-wise it won’t yield what’s often been envisioned, especially if all TV migrates to an Internet-delivery system.

This week Netflix said it will raise monthly consumer prices by one or two dollars per month  in some territories.  This increase isn’t directly attached to the issue of faster speeds and higher usage. Analysts believe it’s because of the costs incurred by Netflix in acquiring more content or producing significantly more original programming like “House of Cards” and “Orange is the New Black.”

Soon people will wonder why they spend $100 a month just to watch one hour of “Judge Judy,” a half-hour of “New Girl” and three hours of “SportsCenter” a week. They’ll also wonder why their bills for Netflix, Hulu, and Amazon Instant Video are rising.

Right now, someone is thinking about getting out of the fast lane.

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