According to numerous sources, some internet service providers (ISPs) like Time Warner Cable and Comcast are looking into charging their users a "per Gigabyte" charge per month instead of, or in addition to, the "unlimited" internet access monthly fee they currently charge.

As downloading MP3's, movies and video games has become mainstream, ISPs have started to see a large rise in the bandwidth usage they handle.  This has become a problem for some ISPs because their ability to provide "high speed" internet to all of their customers is reduced.  Their networks have a finite ability to handle bandwidth, similar to a water hose can only accommodate a certain amount of water at any given time.  The more bandwidth customers use, the less bandwidth there is to sell to new customers, not to mention that current customer's speeds will be affected negatively.

The per-bandwidth price model would allow companies to make profits that are more in line with what they were before large downloads were so common.  For example, if 100 customers used 2 gigabytes each of bandwidth (200Gb usage) and making $45/mo per user ($4500 per 200Gb of used bandwidth or $22.50 per Gb revenue) in the past, and now those same 100 customers are using 6 gb (600Gb usage) paying about the same amount ($4500 per 600Gb used or $7.50 per Gb revenue) then ISPs need to charge more per Gb to get back to those higher margin times. Please note that these figures are just arbitrary figures but they give you an idea as to how ISPs see this...

They could raise everyone's rates but why do that when not everyone is using the same amount of bandwidth?  So their idea is to charge per-Gigabyte and therefore get the steady stream of revenue per Gb that they are looking for.  There are some problems with this though. 

First, customers and businesses started using more bandwidth because it was touted as being "unlimited."  Services like iTunes started to flourish because customers could purchase and download lots of music, etc due to this as well.  If ISPs hadn't sold this as "unlimited," services like iTunes, Amazon Unbox, etc wouldn't have taken off like they have.

The second problem is that getting users to sign up for "unlimited" internet and then changing their plans to pay per Gb, is that its a bait and switch situation where they get people to sign up for service expecting one thing and getting something else.  It's not the user's fault that they are taking advantage of unlimited internet when they were promised unlimited internet. 

I can understand that bandwidth usage can never be unlimited, but to sell services as unlimited, and being able to charge users more money due to that fact, is a problem that shouldn't be looked past.

One can look at this the same way the oil shortage is looked at.  We're so used to living on a whole lot of oil but the resources are finite.  As we use it up the price skyrockets.  Is this going to happen with the finite resource of bandwidth?  ISPs probably won't lay more cable at an expense of millions of dollars just to satisfy our need for bandwidth without us paying for it.  In my opinion, because of the way they sold what bandwidth they did have as unlimited, they should be responsible for keeping up with the demand without added cost to us, but realistically that will not happen.

So what should be done to utilize ISPs finite bandwidth while still living the way we're used to?