When is a terabyte NOT a terabyte?

Bad news coming our way from the US: BellSouth Chief Architect Henry Kafka warns the price per consumer will explode if ever IPTV becomes popular. IPTV is basically television via the Internet Protocol. This slightly worrying message comes a few days after AT&T announced it was buying Bell South which signalled the reunion of the Baby Bells in what seems to be a remake of Terminator 2.

Kafka believes an IPTV user will consume 224GB per month - that’s roughly two DVDs’ worth. At the approximate price of 50c per GB, he estimates each user will cost a whopping $112 per month. Since the user will pay, at most, around $30 per month, there will be a net loss of nearly $1K per user yearly. Multiply that by several million, and you have an idea of the trouble they may be facing.

Kafka admitted it could turn even nastier should HD Video become mainstream with an estimated 1TB downloaded per month. That’s more than I have downloaded since I started surfing the internet nearly a decade ago. That terabyte, he says, will cost him $560. How he calculates that sum is something of a mystery to me. The cost of a terabyte of bandwidth from a webhosters like Dreamhost for only $7.95 a month, , that’s 70 times less.

Some of you will argue that we are not speaking of the same terabyte of bandwidth here. I agree, but then the general trend in the webhosting industry is one of decreasing, rather than increasing, prices. And as far as I am concerned, the webhosting industry is not complaining about having to limit the amount of bandwidth supplied to their customers. Right now, the more the merrier it seems.

You don’t need to agree, but to me, all this smells like the ol’ Fear, Uncertainty and Doubt syndrome. The merger of the Baby Bells signals the return of the monopoly of the 80s and, with that, rising prices. You can bet your lucky coin that sooner or later, Premium Internet packages and download transfers will be introduced, as the U.S. slowly sinks in the ranking of broadband enabled countries.