I'm downloading the newest iPhone SDK, all 1.2 gigabytes of it, while watching The Big Bang Theory on Hulu, and grabbing a few songs from iTunes. It's easy with an unlimited broadband Internet connection.

Unless you're a Time Warner customer in Beaumont, Texas that is. Time Warner is testing broadband caps, or "consumption-based billing", there. Instead of buffet-style "all you can eat" internet, you would pay for what you use. The company claims that "As few as 5 percent of our customers use 50 percent of the network", but they plan to punish everyone instead of just those 5%.

In fact, when even those 5% signed up, they were promised unlimited bandwidth. Now that they are beginning to use what they were promised, ISPs are failing to keep their end of the agreement, claiming that they are overtaxed and must charge more.

A few years ago, telecoms lobbied governments for funding to upgrade their operational infrastructure, receiving about $200 billion in incentives. Though they took the money, most of these upgrades never happened, and now we are told again that they must raise the necessary capital to do the required upgrades.

This situation in Beaumont won't be just a test for long; it will soon become common practice as ISPs look to generate new revenue streams. My ISP in Canada, cable company Rogers Communications, has already put in place a bandwidth cap of 60 GB per month, the equivalent of 15 HD movies downloaded. Those who exceed the cap will pay $5 per GB over to a maximum of $25.

This is at the same time as Rogers is pushing their Rogers Home Phone VoIP service (they call me and send a paper mailing once a week, and came to my door yesterday), which apparently has no problem with that same "scarce" bandwidth.

The Internet has grown to become a part of our lives based on low cost unlimited access. Services such as music downloading or on-demand video -- iTunes, Skype, YouTube, Vonage, and even Hulu -- exist for that very reason. Easy broadband access had been the driver for incredible innovation and wealth creation over the past ten years, and telecom and cable companies have been happy to sit back and collect the money, while doing nothing to improve the infrastructure.

It is this attitude that has caused the US to slip to 15th place in worldwide broadband penetration. Throwing roadblocks in the way of increased use will not improve the situation.

You could certainly argue that some countries in Europe or Australia have had bandwidth caps or per-per-use models in place for years, but tellingly, the greatest web innovation has come from places without limits, such as Finland (Skype, Joost), Israel, or the United States (iTunes, Netflix, YouTube, Hulu, etc.). This doesn't even include potential bandwidth-intensive medical applications such as remote radiology or cardiology that will be stalled completely by this. These applications created the demand that drove the increased broadband adoption and revenues.

The move to a pay-per-use model will also bring about a change in thinking among users, exactly the same reason the mobile Internet never took off. Am I likely to download movies or music over the Internet when I face a potential additional charge to do so? In fact, if I am paying per use, then I'll probably insist on not being forced to see advertising, especially Flash and banner ads which use more of my precious bandwidth. And I will never go to my own ISP's self-serve site when the phone call is free, resulting in an increase in their support costs.

Strangely, it was the introduction of a flat rate unlimited mobile data plan by AT&T that caused iPhone usage to soar. Yet telecom companies fail to acknowledge the irony. Perhaps the desire to make a quick buck blinds them to the obvious.

Larry Borsato has been a software developer, marketer, consultant, public speaker, and entrepreneur, among other things. For more of his unpredictable, yet often entertaining thoughts you can read his blog at larryborsato.com.

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