Internet Access: Flat Fee vs. Pay-Per-Use 2018

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Internet Access: Flat Fee vs. Pay-Per-Use

Most Internet users are either not charged to access information, or pay

a low-cost flat fee. The Information SuperHighway, on the other hand, will

likely be based upon a pay-per-use model. On a gross level, one might say that

the payment model for the Internet is closer to that of broadcast (or perhaps

cable) television while the model for the Information SuperHighway is likely to

be more like that of pay-per-view T.V.

“Pay-per-use” environments affect user access habits. “Flat fee”

situations encourage exploration. Users in flat-fee environments navigate

through webs of information and tend to make serendipitous discoveries. “Pay-

per-use” situations give the public the incentive to focus their attention on

what they know they already want, or to look for well-known items previously

recommended by others. In “pay-per-use” environments, people tend to follow more

traditional paths of discovery, and seldom explore totally unexpected avenues.

“Pay-per-use” environments discourage browsing. Imagine how a person’s reading

habits would change if they had to pay for each article they looked at in a

magazine or newspaper.

Yet many of the most interesting things we learn about or find come from

following unknown routes, bumping into things we weren’t looking for. (Indeed,

Thomas Kuhn makes the claim that, even in the hard sciences, real breakthroughs

and interesting discoveries only come from following these unconventional routes

[Kuhn, Thomas, The Structure of Scientific Revolutions, Chicago: University of

Chicago Press, 1962]).

And people who have to pay each time they use a piece of information are

likely to increasingly rely upon specialists and experts. For example, in a

situation where the reader will have to pay to read each paragraph of background

on Bosnia, s/he is more likely to rely upon State Department summaries instead

of paying to become more generally informed him/herself. And in the 1970s and

1980s the library world learned that the introduction of expensive pay-per-use

databases discouraged individual exploration and introduced the need for

intermediaries who specialized in searching techniques.

Producers vs. Consumers

On the Internet anyone can be an information provider or an information

consumer. On the Information SuperHighway most people will be relegated to the

role of information consumer.

Because services like “movies-on-demand” will drive the technological

development of the Information SuperHighway, movies’ need for high bandwidth

into the home and only narrow bandwidth coming back out will likely dominate.

(see Besser, Howard. “Movies on Demand May Significantly Change the Internet”,

Bulletin of the American Association for Information Science, October 1994)

Metaphorically, this will be like a ten-lane highway coming into the home and

only a tiny path leading back out (just wide enough to take a credit card number

or to answer multiple-choice questions).

This kind of asymmetrical design implies that only a limited number of

sites will have the capability of outputting large volumes of bandwidth onto the

Information SuperHighway. If such a configuration becomes prevalent, this is

likely to have several far-reaching results. It will inevitably lead to some

form of gatekeeping. Managers of those sites will control all high-volume

material that can be accessed. And for reasons of scarcity, politics, taste, or

personal/corporate preference, they will make decisions on a regular basis as to

what material will be made accessible and what will not. This kind of model

resembles broadcast or cable television much more so than it does today’s


The scarcity of outbound bandwidth will discourage individuals and small

groups from becoming information producers, and will further solidify their role

as information consumers. “Interactivity” will be defined as responding to

multiple-choice questions and entering credit card numbers onto a keypad. It

should come as no surprise that some of the major players trying to build the

Information SuperHighway are those who introduced televised “home shopping”.

Information vs. Entertainment

The telecommunications industry continues to insist that functions such

as entertainment and home shopping will be the driving forces behind the

construction of the Information SuperHighway. Yet, there is a growing body of

evidence that suggests that consumers want more information-related services,

and would be more willing to pay for these than for movies-on-demand, video

games, or home shopping services.

Two surveys published in October 1994 had very similar findings.

According to the Wall Street Journal (Bart Ziegler, “Interactive Options May be

Unwanted, Survey Indicates,” Oct. 5, 1994, page B8), a Lou Harris poll found

that “a total of 63% of consumers surveyed said they would be interested in

using their TV or PC to receive health-care information, lists of government

services, phone numbers of businesses and non-profit groups, product reviews and

similar information. In addition, almost three-quarters said they would like to

receive a customized news report, and about half said they would like some sort

of communications service, such as the ability to send messages to others. But

only 40% expressed interest in movies-on-demand or in ordering sports programs,

and only about a third said they want interactive shopping.”

A survey commissioned by MacWorld (Charles Piller, “Dreamnet”, MacWorld,

Oct 1994, pages 96-105) which claims to be “one of the most extensive benchmarks

of consumer demand for interactive services yet conducted” found that “consumers

are much more interested in using emerging networks for information access,

community involvement, self-improvement, and communication, than for

entertainment.” Out of a total of 26 possible online capabilities, respondents

rated video-on-demand tenth, with only 28% indicating that this service was

highly desirable. Much more desirable activities included on-demand access to

reference materials, distance learning, interactive reports on local schools,

and access to information about government services and training. Thirty-four

percent of the sample was willing to pay over $10 per month for distance

learning, yet only 19% was willing to pay that much for video-on-demand or other

entertainment services.

If people say they desire informational services more than entertainment

and shopping (and say that they’re willing to pay for it), why does the

telecommunications industry continue to focus on plans oriented towards

entertainment and shopping? Because, in the long run, the industry believes that

this other set of services will prove more lucrative. After all, there are

numerous examples in other domains of large profits made from entertainment and

shopping services, and very few such examples from informational services.

It is also possible that the industry believes that popular opinion can

easily be shifted from favoring informational services to favoring entertainment

and shopping. For several years telecommunications industry supporters have been

attempting to gain support for deregulation of that industry by citing the

wealth of interesting informational services that would be available if this

industry was freed from regulatory constraints. Sectors of the industry may well

believe that the strength of consumer desire for the Information SuperHighway to

meet information needs (as shown in these polls) is a result of this campaign.

According to this argument, if popular opinion can be swayed in one direction,

it can be swayed back in the other direction

Popular discourse would have us believe that the Information

SuperHighway will just be a faster, more powerful version of the Internet. But

there are key differences between these two entities, and in many ways they are

diametrically opposed models.


The metering that will have to accompany pay-per-view on the Information

SuperHighway will need to track everything that an individual looks at (in case

s/he wants to challenge the bill). It will also give governmental agencies the

opportunity to monitor reading habits. Many times in the past the FBI has tried

to view library circulation records to see who has been reading which books. In

the online age, service providers can track everything a user has bought, read,

or even looked at. And they plan to sell this information to anyone willing to

pay for it.

In an age where people engage in a wide variety of activities online,

service providers will amass a wealth of demographic and consumption information

on each individual. This information will be sold to other organizations who

will use it in their marketing campaigns. Some organizations are already using

computers and telephone messaging systems to experiment with this kind of

demographic targeting. For example, in mid-1994, Rolling Stone magazine

announced a new telephone-based ordering system for music albums. After using

previous calls to build “a profile of each caller’s tastes … custom messages

will alert them to new releases by their favorite artists or recommend artists

based on previous selections. ” (“Phone Service Previews Albums” by Laura

Evenson, San Francisco Chronicle, 6/30/94, p D1) Some of the early experiments

promoted as tests of interactive services on the Information SuperHighway were

actually designed to gather demographic data on users. (“Interacting at the

Jersey shore: FutureVision courts advertisers for Bell Atlantic’s test in Toms

River”, Advertising Age, May 9, 1994)


No one can predict the future with certainty. But we can analyze and

evaluate predictions by seeing how they fit into patterns. And an analysis of

the discourse around the Information SuperHighway shows remarkable similarity to

that which surrounded cable TV nearly a quarter-century before. Though there is

no guarantee that the promises of this technology will prove as empty as those

of the previous technology, we can safely say that certain powerful groups are

more interested in promoting hype than in weighing the possible effects of the

Information SuperHighway.

The Information SuperHighway will not just be a faster Internet; in fact

it is possible that many of the elements that current Internet users consider

vital will disappear in the new infrastructure. Though the average consumer will

have many more options than they do from their home television today, attempts

at mass distribution will likely favor mainstream big-budget programs over those

that are controversial or appeal to a narrower audience. It is possible that

diversity available from all sources will decrease and independent productions

will be even further marginalized. And the adoption of an asynchronous

architecture (a ten-lane highway coming into the library or home with a tiny

path leading back out) would pose a significant barrier to those seeking to be

information providers, and would favor a model of relatively passive consumption.

And the kind of massification and leveling of culture that will follow is likely

to be similar to the effects of broadcast television on culture.

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