Traffic problems on the information superhighway dominated the discussions at a recent meeting of the Internet Engineering Task Force (IETF), problems that are likely to increase as more users take advantage of flat rate pricing plans from service providers.
Some 1,200 networking engineers gathered in San Jose for the IETF meeting in December to discuss a range of Internet related topics. But one of the most important focused on how the commercialisation of the Net is placing increasingly heavy burdens on the existing infrastructure.
No solutions were offered at the meeting, but it is an issue likely to haunt future gatherings of the group as flat rate pricing schemes encourage lengthier surfing time by users freed from the restrictions of ?watching the meter? when they log on.
The latest company to offer this type of pricing initiative is America OnLine (AOL) , the biggest of the US service providers. From 1 December, it replaced its metered, by-the-hour charges with a flat rate of $19.95 a month for unlimited usage.
Despite initial controversy from some low-usage customers who fear their monthly bills are likely to go up in the new regime, the pricing initiative has been a undoubted success for AOL, at least in one sense. Since the new scheme was introduced - promoted with blanket TV and print advertising offering 50 free hours - AOL has been flooded with new or additional users.
But this has had the side effect of slowing down connection times and increasing the likelihood of getting a busy signal when log-ons are attempted. Steve Case, AOL?s chief executive, has already admitted to the CNN news network that there were problems, particularly during peak times.
It could get worse. Despite the fuss over the way the new scheme was introduced, AOL claims that most of its customers have actually opted for the flat price. To date, two-thirds of its 7 million customers are eligible for the new pricing with the remaining third being offered it on their billing date, which is determined by the date on which the customer first signed up.
AOL plans to address the bandwidth shortage with an increase in the number of telephone lines and modems, with an expectation of adding over 10,000 modems a month to its infrastructure. It will also encourage customers to use alternative or back-up telephone numbers for Net access.
Ironically as the biggest provider opts for a flat rate approach, the company that started the trend is pulling out and going back to a by-the-hour charging policy. Netcom, which began a uniform pricing fee policy three years ago, claims that dropping this strategy will allow it to offer customers greater efficiency and a better service.
Officially the reason for the shift in thinking is related as much to the demographic profile of the Netcom customer base as it is to the bandwidth blockage issue. The company contends that most other providers customers use the Net for entertainment or recreational purposes and as such are likely to put up with glitches or slowdowns in the service.
But, it argues, some 75 per cent of Netcom?s 580,000 subscribers are professional types who use the Internet for commercial or business purposes. As such, an efficient and reliable service is their top priority. A Netcom spokesman said that too many people were finding it difficult or impossible to log on to their service providers. ?That doesn?t work for somebody who depends upon Internet service for their business,? he said.
One of Netcom?s fears is that a reduced service offering from providers may render existing tariff levels unsustainable. It intends to invest heavily in infrastructure to boost access speed and reliability and shore up customer support operations. All that is obviously giong to cost, so the company is making a virtue out of potentially bumping up the bills of many of its subscribers. Netcom will, it claims, offer premium services for premium prices.
It?s something of a gamble for Netcom - will customers stick with its ?quality? offering or opt to keep their monthly bills the same by switching to another provider? The presence of major telecoms carriers like AT&T in the Internet services market will guarantee the continuation of loss-leading flat rate payment plans as a means of winning business for their core telephone businesses. So one way or another, the $20 a month option seems here to stay. What the price will be in terms of Internet performance is another matter entirely.
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