Verizon CTO: Metered Bandwidth Is Inevitable

Telco's Tech Chief Says Flat-Rate Pricing Isn't Sustainable

Broadband Internet service providers will need to charge customers based on usage at some point, Verizon Communications chief technology officer Richard Lynch said at an industry conference Tuesday.

"We're going to have to consider pricing structures that allow us to sell packages of bytes, and at the end of the day the concept of a flat-rate infinitely expandable service is unachievable," said Lynch, speaking at the 2009 FTTH Conference & Expo in Houston, according to GigaOm.

The issue of bandwidth metering has been politically explosive, at least in the U.S.

Time Warner Cable this spring was attacked by politicians, interest groups and individual subscribers when it proposed to expand tests of usage-based Internet billing to four markets. The company shelved the plans, "until further consultation with our customers and other interested parties, ensuring that community needs are being met," Time Warner Cable CEO Glenn Britt said in a statement at that time.

But according to Lynch, service providers "cannot continue to grow the Internet without passing the cost on to someone," Telephony Online reported.

While he said Verizon was "not announcing a new pricing plan," Lynch noted that wireless data providers already charge based on consumption because of bandwidth constraints.

The model of charging Internet users for what they use has been instituted by major providers in Canada, including Rogers Communications and Cogeco Cable, as well as those in the U.K. and New Zealand. In the U.S., AT&T has been conducting usage-based billing trials. Comcast, Cox Communications and Charter Communications impose monthly maximum-usage limits but currently do not bill for additional bytes consumed.