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Will Broadband Internet Metering Hurt SMBs?

As some major ISPs test usage-based Internet service plans, startups and other smaller companies worry that "metering" could adversely affect how they do business.

Gartner's Mason said that as long there is competition in the marketplace, someone will likely offer an unlimited data plan, even if metered options become more common. He added that most businesses view Internet service as a commodity; if another provider better suits their needs and budget, they'll simply switch. True enough: Judy Schmitz, who runs a bandwidth-intensive knitting retailer, said her four-person business would not stomach usage-based billing. "If a provider starts metering us and charging overage [fees], we will simply have to find a new provider," Schmitz said via email. "The market will have to be the determinant of this one."

The problem for some SMBs: That market doesn't always exist. CaliforniaContractorBonds.com struggled to find high-speed Internet that met its requirements after moving into new office space in El Dorado Hills, Calif., about 40 miles east of Sacramento. Those needs were based on the company's recent investment in a VoIP system as well as its frequent handling of large electronic documents. It picked the only provider in the area that offered what it needed and ended up in a rather unique situation, according to owner Jeremy Schaedler: A handshake deal for bandwidth that was negotiated based on the company's current headcount of three people--and on the assumption that the firm won't suddenly start gobbling up data. As a result, online services like YouTube and Pandora aren't allowed in the CaliforniaContractorBonds.com office. Several other SMBs I spoke to, such as Coalition Technologies, have instituted similar rules governing employee Internet usage or plan to in the future. They cite bandwidth--not productivity--as the primary reason. Still, Schaedler's concerned about Internet costs growing in concert with his company.

"What can happen to our Internet costs if our business doubles or triples in size at our current location is troubling, given our long-term lease and a lack of Internet provider competition in the area," he said via email.

Even SMBs unaffected by ISPs moving to usage-based pricing might face a related challenge: The prospect of their customers adjusting their online habits because they're paying by the gigabyte. That idea has already generated grumblings from data-intensive consumer services like Netflix.

Ernie Dempsey of The Part Time Entrepreneur described the consumer side of metered broadband equation in this way, which is likely to resonate with small online retailers of all stripes: "It would be like cutting off road traffic in front of shops in the city and telling the store owners that they have had their quota of visitors for the day."

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SMB Kevin
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SMB Kevin,
User Rank: Apprentice
8/1/2012 | 4:10:09 PM
re: Will Broadband Internet Metering Hurt SMBs?
1majones, thanks for comment. VoIP was mentioned as a concern by just about every SMB I heard from for this piece. No matter what they do or what other online apps they use, VoIP was consistent across the board. -Kevin Casey
Joanie Mann
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Joanie Mann,
User Rank: Apprentice
7/27/2012 | 5:13:53 PM
re: Will Broadband Internet Metering Hurt SMBs?
There are arguments that say running "thin" clients and accessing remote apps and services is a way to mitigate the impacts of bandwidth metering in the office. Then, you add VOIP because it goes really well with online apps and services, enabling that whole "work from anywhere" idea, and you rapidly learn that it's most affordable if everybody does actually work from anywhere... anywhere but the office, because the broadband charges are once again too high.

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