This is the second article in a series aimed at analyzing the motive behind the various bandwidth caps that have recently been enacted by numerous Internet Service Providers.

In the preceding article, The Relative Cost of Internet Access, we looked at the differences in costs between various service tiers available from two Internet Service Providers. For those interested in a simple recap, here it is: the cost of a broadband Internet connection in Germany is (slightly) lower than the cost of comparable connection in the United States. But not only is the pricing more attractive in Germany, the speed of the connection is superior as well. Excluding special offers and discounts, customers in Germany have no trouble signing up for an uncapped connection of 32 Mbit/s down, while U.S. customers, looking to spend no more than their German counterparts, are limited to only 6 Mbit/s.

So now the question remains: why the hell is an Internet connection so darn expensive in the US, and why are so many ISPs now considering, or, worse yet, actually implementing, bandwidth caps?

In order to answer this question, let’s take a brief look at which ISPs are capping their customers and to what extent they are doing so:

• Comcast: 250GB cap on total bandwidth consumption per month.
• Time Warner Cable: Toying with the idea of total bandwidth caps at about 40 - 75GB per month.
• Cablevision: No explicitly stated cap; although some report that heavy usage is frowned upon.
• Verizon FIOS: No cap, whatsoever.

These four — Comcast, Time Warner Cable, Cablevision, and Verizon — represent practically the entire high-speed ISP industry as it exists today in the United States; so much for competition, right?

Notice anything interesting about the various caps that these four companies are imposing on their customers? Here’s a hint: look at what else they’re invested in.

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This article is the first in a series aimed at discussing the cost of Internet access around the world, as well as the implications of imposing ever stricter bandwidth caps on customers.

Intuitively, one might assume that as technology advances and becomes more readily available that products and service should become ever more abundant and ever cheaper. One would presume that in the most populous state in America, where the boundaries of technology are continually being probed and pushed back, that something as basic as an Internet connection would be relatively cheap, certainly no more expensive than a connection somewhere in Europe, right?

Looking at the numbers, however, this is not necessarily the case, and reasons for this pricing discrepancy are not immediately apparent. In order to understand why the prices are the what they are, one needs to understand the who the players are, as well as the state of the industry as a whole.

But, before we get too far into the analysis, let’s start out by looking at the numbers.

Internet penetration in the United States is at roughly 45 percent (according to a census taken last year), and with the number of services and devices what use the Internet increasing daily, this percentage is bound to skyrocket in the coming years. That being said, however, the United States is still way ahead in terms of Internet penetration when compared to the rest of the world, and as such, the rate of adoption in the U.S. is not quite as high as it might be in some other, more rapidly developing, parts of the world. In fact, while the percentage of Internet users in the rest of the world is at around 20 percent of a given population, Internet adoption (in the rest of the world) is growing at a rate of about 395% — compared to a growth rate in the United States of about 228%.

Despite the high penetration, however, the cost of service in the United States is rather steep, even when compared to other developed nations. To illustrate my point, let’s take a look at the cost of a high-speed Internet connection in Germany versus the available offers from Comcast, the most popular Internet Service Provider (ISP) in the United States.

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Barely a week into the new year, several stories broke suggesting that the National Telecommunications and Information Administration had run out of funding to provide any more coupons for the upcoming digital television transition. Responding to this news, the Obama administration began an immediate campaign to delay the transition, fearing that as many as six million households would be unable to meet the transition deadline.

After a new bill was drawn up, it was quickly rammed through the Senate. Yet, in a surprising turn of events the bill failed to make it through the House of Representatives. Undaunted, however, by this initial defeat, the bill was resubmitted, and on the second pass through, it was voted into law — 264 for, versus 158 against.

So, now that the DTV transition date has been officially moved back, to June 12^th, 2009, what does that mean for the average consumer?

Well, for one, there’s going to be an awful lot of seriously confused consumers. For months now, the air waves have been saturated with the public service announcements urging consumers to get ready for the transition to DTV. When the first announcements were made that such a transition was in the works, there was a tremendous amount of confusion regarding the exact purpose of this transition, how it was to be implemented, how it would occur, and whether or not services would be lost.

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Lossless codecs, like FLAC, are great when it comes to preserving all the quality present on the original media. Unfortunately though, they do take up quite a bit of space and most lossless codecs are far from popular in the mainstream. Therefore, it often becomes necessary to sacrifice some of the quality in order to recoup some disk space and increase compatibility — because the day that the iPod supports open source codecs, is also likely to be the day that hell freezes over…

So, you’re stuck with hordes of FLAC files and you want to convert them all into high-quality MP3’s, and, of course, you’d like to do all this without paying a penny, correct? Is that even possible? After all, the Fraunhofer Society currently owns the rights to the MP3 codec, and they’re not shy about cashing in on it.

Fortunately, there is a solution, and both of the tools needed for this operation are available for free!

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Despite the troubled roll-out, the beta to Microsoft’s next operating system, Windows 7, is finally available. But, unless you are either a die-hard Microsoft fan (possible, though unlikely), or a true geek, you’re probably thinking to yourself, “So what?”

Well, if that’s your first reaction, then I really can’t blame you. Traditionally, trying out beta releases of operating systems has been a real hassle. Either you’re so eager and willing to try out the very latest that you can’t wait to repartition and reformat a drive in order to install the new OS, or you just can’t be bothered.

Wouldn’t it be great if you could just boot your current operating system – be it XP, Vista, or some Unix variant – pop open a window and run Windows 7 in that?

Not only would this be a great alternative to a traditional installation, but it’s also pretty easy to setup!

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