Tiered Internet service

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Tiered service structures allow users to select from a small set of tiers at progressively increasing price points to receive the product or products best suited to their needs. Such systems are frequently seen in the telecommunications field, specifically when it comes to wireless service, digital and cable television options, and broadband internet access. [1]


When a wireless company, for example, charges customers different amounts based on the number of cellphone voice minutes, text messages, amount of data and other features they desire, the company is utilizing the principle of tiered service. This is also seen in charging different prices for services such as the speed of one's internet connection and the number of cable television channels one has access to. Tiered pricing allows customers access to these services who may not otherwise due to financial constraints, ultimately reflecting the diversity of consumer needs and resources.

Tiered service helps to keep quality of service standards for high-bandwidth applications like streaming video or VoIP. This comes at a cost of increasing costs for better service levels. [2] Major players in the net neutrality debate have proposed tiered internet so content providers who pay more to Internet service providers get better quality service. [3]


It was not until the Internet began its rapid evolution that tiered services became a controversial issue. And it was not until the early 2000s that Internet carriers considered the option of abandoning net neutrality policies. [4] In 2005, the FCC changed the way broadband service providers are regulated. This made broadband service providers "information services" instead of "telecommunications services". This means broadband service providers were no longer subject to common carrier regulations. [5] Since the beginning of the twentieth century, common carriage guidelines required the quality of service must be the same for all users, preventing one customer from being favored over another. [4] During the first decades of the 1900s, this policy related directly to the telephone industry, and AT&T specifically. However, in recent decades, the policy has grown to encompass a broader range of communication services. Preventing preferential treatment of customers in the realm of the Internet is referred to as the policy of net neutrality.

In the US, the former chairman of the Federal Communications Commission (FCC), Michael Powell, considered net neutrality to be fundamental to the success of the Internet and he viewed it as one of the basic rules to maintaining freedom on the Internet. [4] The FCC continued its skepticism of tiered pricing for quite some time, and it was not until concerns about the availability of the spectrum began to surface that things began to change. In 2010, FCC Chairman Julius Genachowski announced that the benefits of tiered pricing include helping to prevent data backups on networks. [6] Genachowski expressed his fear of a coming "spectrum crisis" as a result of the increase in smartphone usage ultimately clogging carrier networks.

The FCC suggested a number of solutions to the problem including greater use of the unlicensed Wi-Fi spectrum, more femtocells, and more efficient arrangement of cellular towers, but even these measures were not believed to be enough to keep spectrum bands open. [7] Attempts have been made to put price controls on tiered service. United States Congress put a bill forth to prevent a "two-tiered pricing scheme with priority service." The bill did not pass Congress, but allowed the FCC to stop ISPs from blocking websites. [8] The way ISPs tier services for content providers and application providers is through "access-tiering". This is when a network operator grants bandwidth priority to those willing to pay for quality service. "Consumer-tiering" is where different speeds are marketed to consumers and prices are based on the consumers willingness to pay. [9]

Net neutrality

Net neutrality is the practice of keeping Internet service providers from offering tiered service and controlling the ability to block out competition by restricting certain pipelines within the Internet. By blocking these pipelines, the provider creates an unfair transfer of packets across the Internet, diminishing the quality of service. Internet service providers seek to discriminate against peer-to-peer (P2P) communication, FTP, online games, and high bandwidth activities, such as video streaming. [10] This practice is called bandwidth throttling.

In 2017, the FCC Voted to repeal "Net Neutrality" in their "Restoring Internet Freedom" Order. [11] Fulling taking effect on June 11, 2018, the initiative removed barriers of the Title II regulations that had been placed on the Internet Service Providers in 2015. Due to the repeal, Internet Service Providers can initiate tiered internet services and are no longer required to treat all online traffic as equal. [12] With the removed regulations, Internet Service Providers can move forward with creating tiered internet services. Proponents of the repeal argue that the tiered internet service will allow for increased innovation in the internet. Detractors argue that it will create anti-consumer measures that crowd out emerging businesses and create a bundling system that is not within consumer preference. [13]

Responses to repealing net neutrality

Within the United States alone, many have feared that the elimination of net neutrality will cause widespread damage to the accessibility and freedom of the internet. Particularly, senators such as Jeanne Shaheen of New Hampshire have openly criticized decisions by the Federal Communications Commission to repeal net neutrality rules in their 2017 Order. In a U.S. Senate Committee on Small Business & Entrepreneurship that occurred in May 2018, Senator Shaheen stated that a lack of net neutrality will have "major ramifications for consumers as well as for small businesses." [14] The Senator goes on to elaborate that small businesses within her state have expressed fears that broadband providers will create unfair pay systems for access to the internet that would inevitable put them at a competitive disadvantage. These concerns are especially valid in regions of New Hampshire where rural communities do not have access to high-speed broadband, or limited access with only one provider. [14]

Despite outspoken opposition from those such as Senator Shaheen, many data carriers argue that the ability to differentiate charges and access of data will allow them to increase incentives to develop innovation. This developed innovation will lead to faster service and better accessibility to content for all consumers. [15] Most recently, the FCC's move to adopt the 2017 Order has reignited the debate over how much Congress should regulate the existing net neutrality laws. The debates over this regulatory framework are expected to continue in the 116th Congress. [16]

Tiered Internet


A tiered Internet gives priority to packets sent and received by end users that pay a premium for service. [17] Network operators do this because of issues such as network management and equipment configuration, traffic engineering, service level agreements, billing, and customer support. [18]

Tiered service fair queuing

Fair queuing is an algorithm that allows for network moderators to control packets by assigning flow weights. [1] Groups of guaranteed-service applications are classed by their nature (e.g. "voice","video","game") based on similar bandwidth and delay requirements. These guaranteed-service applications are given priority over best-effort applications which are limited by the access bandwidth available to the user.

Continuous rate network model

The continuous-rate network model allow users to request any amount of bandwidth necessary for their uses and the network must be able to provide any arbitrary amount requested. There must be mechanisms put into place by the network provider that allows for a distinguishing to be made for these arbitrary requests. This process can become almost impossible for traffic with a finite duration. Bandwidth requests are inherently variable in size, arrival time, and duration and creates link capacity across the continuous rate network to become fragmented. The network would then have much difficulty in maintaining a sufficient level of utilization and users’ expected quality of service. [18]


Initial reasoning against tiered service was that ISPs would use it to block content on the Internet. [19] Internet service providers could use this to prioritize affiliated partners instead of unaffiliated ones. [20] Many argue that one fast network is much more efficient than deliberately throttling web traffic to create a tiered Internet. [21]


AT&T had a trial in 2008 in Reno, NV which was one of the first cases of tiered service for in-home broadband internet pertaining to the amount of data used. [22]

BT Group

BT Group, a British telecommunications giant, is now going to charge users of their service extra for faster delivery of content. Meaning that they will not be handling all traffic across their network equally. [23]

Tiered cellular data plans


AT&T revised their cellular data plans to create data tiers for specific types of usage. AT&T indicated that tiered pricing may be brought on in the future for LTE data plans. [24]

Metro PCS

MetroPCS has been accused of violating net neutrality by their proposed tiered cell phone data services. With some of these services being capped at a certain maximum, this violates various agreements for an open Internet. [25]


Sprint is implementing tiered data plans for their mobile broadband products. The plans come in 3GB, 5GB, and 10GB capacities. Sprint previously claimed to have unlimited service, as this is their first venture into tiered pricing schemes. [26]


Verizon Wireless introduced their LTE network with the capability for tiered services at the end of 2010. Because the company's 4G network is now available in cities across the United States, Verizon has the opportunity to charge premium prices for faster data delivery. Such data plans allow Verizon to charge under a tiered service platform, similar to many home wired Internet services. [27]


There are many arguments between ISPs, who traditionally support tiered services, and network neutrality proponents. ISPs state that tiered services are necessary to keep and maintain network performance. Also, tiered pricing schemes provide ISPs with an incentive to upgrade their networks and provide better service. Network neutrality proponents say that ISPs do not have the right to degrade Internet services to certain users and that their service should be open and consistent. [28] Verizon CEO, Ivan Seidenberg, expressed his concerns with network neutrality regulations saying that stricter regulations preventing tiered services ignore the "benefits of smart networks." [29] In 2011, it was reported that both critics and proponents believe that the debate over net neutrality and tiered services has become increasingly more partisan. [30]

Related Research Articles

<span class="mw-page-title-main">Internet service provider</span> Organization that provides access to the Internet

An Internet service provider (ISP) is an organization that provides services for accessing, using, managing, or participating in the Internet. ISPs can be organized in various forms, such as commercial, community-owned, non-profit, or otherwise privately owned.

<span class="mw-page-title-main">Internet access</span> Individual connection to the Internet

Internet access is a facility or service that provides connectivity for a computer, a computer network, or other network device to the Internet, and for individuals or organizations to access or use applications such as email and the World Wide Web. Internet access is offered for sale by an international hierarchy of Internet service providers (ISPs) using various networking technologies. At the retail level, many organizations, including municipal entities, also provide cost-free access to the general public.

<span class="mw-page-title-main">Net neutrality</span> Principle that Internet service providers should treat all data equally

Network neutrality, often referred to as net neutrality, is the principle that Internet service providers (ISPs) must treat all Internet communications equally, offering users and online content providers consistent rates irrespective of content, website, platform, application, type of equipment, source address, destination address, or method of communication.

Bandwidth throttling consists in the limitation of the communication speed, of the ingoing (received) or outgoing (sent) data in a network node or in a network device.

A data cap, often erroneously referred to as a bandwidth cap, is an artificial restriction imposed on the transfer of data over a network. In particular, it refers to policies imposed by an internet service provider in order to limit customers' usage of their services; typically, exceeding a data cap would require the subscriber to pay additional fees based on whether they have exceeded this limit. Implementation of a data cap is sometimes termed a fair access policy, fair usage policy, or usage-based billing by ISPs.

In the United States, net neutrality, the principle that Internet service providers (ISPs) treat all data on the Internet the same, and not discriminate, has been an issue of contention between network users and access providers since the 1990s. With net neutrality, ISPs may not intentionally block, slow down, or charge money for specific online content. Without net neutrality, ISPs may prioritize certain types of traffic, meter others, or potentially block traffic from specific services, while charging consumers for various tiers of service.

<span class="mw-page-title-main">Internet in the United States</span> Overview of the Internet in the United States of America

The Internet in the United States grew out of the ARPANET, a network sponsored by the Advanced Research Projects Agency of the U.S. Department of Defense during the 1960s. The Internet in the United States in turn provided the foundation for the worldwide Internet of today.

Net neutrality in Canada is a debated issue, but not to the degree of partisanship in other nations, such as the United States, in part because of its federal regulatory structure and pre-existing supportive laws that were enacted decades before the debate arose. In Canada, Internet service providers (ISPs) generally provide Internet service in a neutral manner. Some notable incidents otherwise have included Bell Canada's throttling of certain protocols and Telus's censorship of a specific website critical of the company.

<i>Comcast Corp. v. FCC</i> 2010 US Court of Appeals for the District of Columbia case

Comcast Corp. v. FCC, 600 F.3d 642, is a case at the United States Court of Appeals for the District of Columbia holding that the Federal Communications Commission (FCC) does not have ancillary jurisdiction over the content delivery choices of Internet service providers, under the language of the Communications Act of 1934. In so holding, the Court vacated a 2008 order issued by the FCC that asserted jurisdiction over network management policies and censured Comcast from interfering with its subscribers' use of peer-to-peer software. The case has been regarded as an important precedent on whether the FCC can regulate network neutrality.

The Federal Communications Commission Open Internet Order of 2010 is a set of regulations that move towards the establishment of the internet neutrality concept. Some opponents of net neutrality believe such internet regulation would inhibit innovation by preventing providers from capitalizing on their broadband investments and reinvesting that money into higher quality services for consumers. Supporters of net neutrality argue that the presence of content restrictions by network providers represents a threat to individual expression and the rights of the First Amendment. Open Internet strikes a balance between these two camps by creating a compromised set of regulations that treats all internet traffic in "roughly the same way". In Verizon v. FCC, the Court of Appeals for the D.C. Circuit vacated portions of the order that the court determined could only be applied to common carriers.

Internet bottlenecks are places in telecommunication networks in which internet service providers (ISPs), or naturally occurring high use of the network, slow or alter the network speed of the users and/or content producers using that network. A bottleneck is a more general term for a system that has been reduced or slowed due to limited resources or components. The bottleneck occurs in a network when there are too many users attempting to access a specific resource. Internet bottlenecks provide artificial and natural network choke points to inhibit certain sets of users from overloading the entire network by consuming too much bandwidth. Theoretically, this will lead users and content producers through alternative paths to accomplish their goals while limiting the network load at any one time. Alternatively, internet bottlenecks have been seen as a way for ISPs to take advantage of their dominant market-power increasing rates for content providers to push past bottlenecks. The United States Federal Communications Commission (FCC) has created regulations stipulating that artificial bottlenecks are in direct opposition to a free and open Internet.

Net bias is the counter-principle to net neutrality, which indicates differentiation or discrimination of price and the quality of content or applications on the Internet by ISPs. Similar terms include data discrimination, digital redlining, and network management.

Internet rush hour is the time period when the majority of Internet users are online at the same time. Typically, in the UK the peak hours are between 7 and 11 pm. During this time frame, users commonly experience slowness while browsing or downloading content. The congestion experienced during the rush hour is similar to transportation rush hour, where demand for resources outweighs capacity.

<i>Verizon Communications Inc. v. FCC</i> (2014)

Verizon Communications Inc. v. Federal Communications Commission, 740 F.3d 623, was a case at the U.S. Court of Appeals for the D.C. Circuit vacating portions of the FCC Open Internet Order of 2010, which the court determined could only be applied to common carriers and not to Internet service providers. The case was initiated by Verizon, which would have been subjected to the proposed FCC rules, though they had not yet gone into effect. The case has been regarded as an important precedent on whether the FCC can regulate network neutrality.

<span class="mw-page-title-main">Zero-rating</span> Internet access under certain conditions

Zero-rating is the practice of providing Internet access without financial cost under certain conditions, such as by permitting access to only certain websites or by subsidizing the service with advertising or by exempting certain websites from the data allowance.

<span class="mw-page-title-main">Internet Slowdown Day</span>

Internet Slowdown Day, part of the "Battle for the Net" initiative, was a series of protests against the repeal of net neutrality laws coordinated by websites and advocacy groups in the United States occurring on September 10, 2014. The official site explains: "On September 10th, sites across the web will display an alert with a symbolic 'loading' symbol and promote a call to action for users to push comments to the FCC, Congress, and the White House."

Net neutrality law refers to laws and regulations which enforce the principle of net neutrality.

<i>United States Telecom Association v. FCC</i> (2016)

United States Telecom Association v. FCC, 825 F. 3d 674, was a case at the U.S. Court of Appeals for the D.C. Circuit upholding an action by the Federal Communications Commission (FCC) the previous year in which broadband Internet was reclassified as a "telecommunications service" under the Communications Act of 1934, after which Internet service providers (ISPs) were required to follow common carrier regulations.

Net neutrality is the principle that governments should mandate Internet service providers to treat all data on the Internet the same, and not discriminate or charge differently by user, content, website, platform, application, type of attached equipment, or method of communication. For instance, under these principles, internet service providers are unable to intentionally block, slow down or charge money for specific websites and online content.

<i>Mozilla Corp. v. FCC</i> 2019 American court case

Mozilla Corp. v. FCC, 940 F. 3d 1 was a ruling the United States Court of Appeals for the District of Columbia Circuit in 2019 related to net neutrality in the United States. The case centered on the Federal Communications Commission (FCC)'s decision in 2017 to rollback its prior 2015 Open Internet Order, reclassifying Internet services as an information service rather than as a common carrier, deregulating principles of net neutrality that had been put in place with the 2015 order. The proposed rollback had been publicly criticized during the open period of discussion, and following the FCC's issuing of the rollback, several states and Internet companies sued the FCC. These cases were consolidated into the one led by the Mozilla Corporation.


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