The end of unlimited internet: back to the 90s?

Telecoms want to end unlimited internet and bring back pay-per-use billing

In November 2009, elEconomista published an article that set off every alarm: telecom operators were considering scrapping unlimited internet plans and replacing them with a model charging for the volume of data downloaded. The proposal, which back then seemed like a distant threat, has resurfaced several times, most recently in February 2014, when the debate returned to the forums with the same intensity. Sixteen years later, the question remains open: will telecoms manage to impose per-gigabyte billing?

The economic argument: punishing the freeloader or squeezing the customer

The operators' reasoning is simple: a few users account for most of the traffic — P2P downloads, streaming, massive updates — while the majority just browses, checks email and uses social media. Under a flat model, the heavy user benefits at everyone else's expense. But the comparison with water or electricity doesn't hold up: the network is not a resource that runs out; its bottleneck lies in edge routers, not in the copper cable. A calculation that keeps coming up in analyses of the problem points out that, with a 6 Mbps connection at 39 euros a month, the theoretical cost per gigabyte barely reaches 0.043 euros if maximum capacity were used. At 5 cents per GB, most households would pay less than 10 euros a month. Yet telecoms bill between 50 and 70 euros per line, with landline service and maintenance as the drag.

Competition and technology: the brake that never quite arrives

The arrival of 4G and, later, fibre optics expanded network capacity and cut transport costs. Competition between operators — Movistar, Vodafone, Orange, Yoigo — should have buried the idea, but it hasn't. Offers converged on a model of capped-data plans, especially on mobile, while fixed ADSL kept flat pricing at the cost of shrinking speeds. The Yoigo case, which scrapped its "free calls for life" without the courts stepping in, shows that contractual promises are worthless when the lobby acts in unison. If all the major players agree on the change, customers can only switch to an alternative operator, but in Spain the infrastructure duopoly limits the real options.

The ghost of the 90s and user resistance

Those who lived through the 56k modem era remember the dread of the phone bill charged by the minute. Going back to metering every megabyte would be a step backwards, not only technological but social. Services like Netflix, YouTube or Steam's automatic updates — one user estimated a terabyte of games — would be hit hard. Although advocates of pay-per-use insist it would be fairer, most analyses agree that the real goal is not fairness but raising average revenue per subscriber.

Today, unlimited internet survives, but with lower speeds and more conditions. Every so often, the ghost of the end of flat pricing reappears. The last time was in February 2014, and the thread is still open. Nobody knows when the final blow will come, but the tacit agreement among telecoms suggests it is only a matter of time.

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