The long game on metered pricing and Net Neutrality

Last week, Time-Warner announced that it is experimenting with metered Internet pricing in a couple of markets. The same week, HBO (owned by TW) announced that it will be offering a number of its shows free over the Internet to existing HBO cable subscribers.

Ars Technica notices what seems to be a bit of a contradiction: on one side, TW are sending lots of new data down the pipe in the form of HBO shows, while on the other side they are making it more expensive for such high-bandwidth applications.

But most commentators miss the long game. Here’s what I predict.

Time-Warner will meter but will not count the HBO bits against the consumers’ data plans.

Soon Apple, Netflix, ESPN, YouTube and others will realize that metering makes their shows expensive to consumers. Solution? Pay TW to carry their content without charging against the consumers’ bandwidth limit, as with HBO above.

Ditto when (if) Verizon, Comcast and AT&T start metering. In this scenario, ISPs get paid by the consumer and the producer.

Which seems, on its face, like a nightmare for advocates of net neutrality, right? Big content providers paying the middleman ISP to deliver their bits.

And yet there is no prioritization of anyone’s data in this scheme. No content is being blocked. All bits are delivered like other bits. The only distinction is whether that delivery is paid by the producer or the consumer.

Personally, I think this may work out to be a fine model. Consumers pay according to what they consume, leading to more efficient use of network capacity. If a producer wants the consumer’s eyeballs, they pay for them in the form of a bandwidth subsidy.

Now, I don’t know if consumers will buy a metered plan, or what price tiers would be successful. But if the ISPs do their research and segmentation correctly, this could be a game-changer.