Welcome to the New, Monetized Internet, Where Privacy Is Going to Cost You

If you think of the Internet as a public good, then think again. Internet service providers are finding new ways to monetize their customers, and all signs point to bigger bills for everyone.
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A visualization of routing paths through a portion of the Internet. (Photo: The Opte Project/Wikimedia Commons)

A visualization of routing paths through a portion of the Internet. (Photo: The Opte Project/Wikimedia Commons)

Since it powers our daily lives like electricity, we tend to treat the Internet like a public utility. We pay every month for the privilege of using it and we depend on it in much the same way we depend on flipping a light switch to brighten a dark room—it’s always going to work the same way, every time. As opposed to a cell phone contract that chargers users extra for the number of text messages sent or data used, our Internet fees hold steady every month regardless of how much we’re using it.

But the Internet isn’t a public utility. It’s a private service, subject to the whims of the market and the companies that control it. “Truly high-speed wired Internet access is as basic to innovation ... as electricity was a century ago,” writes Yeshiva University professor and Internet law expert Susan Crawford in her 2013 book Captive Audience: The Telecom Industry and Monopoly in the New Gilded Age. “But a limited number of Americans have access to it, many can’t afford it, and the country has handed control of it over to Comcast and a few other companies.”

U.S. broadband already lags behind that of countries like South Korea and Japan (we come in eighth out of the top 10 countries, behind even Hong Kong and Latvia), and other forces are quickly coming into play to make our country’s Internet less consistent and less like a public good than ever. Following the unveiling of the National Security Agency’s surveillance programs, the Internet’s general sense of anonymity has departed, turning privacy into a commercial good. And the struggle over net neutrality raises the possibility of tiered Internet service, with providers hooking up higher-paying customers with faster speeds. Welcome to the new, monetized Internet.

The new Internet is about turning the process of getting online into a series of tiered options rather than the monolithic package deals we’re used to. Want privacy or quicker downloads? You’ll need to pay for them.

The new Internet is about turning the process of getting online into a series of tiered options rather than the monolithic package deals we’re used to. Want privacy or quicker downloads? You’ll need to pay for them. And what’s more, we’re already willing to.

In a paper released in late 2013, University of Colorado economists Scott Savage and Donald Waldman found that study participants didn’t mind purchasing privacy. Savage and Waldman tested smartphone apps, an easily recognizable commodity, as a gateway to Internet browsing. Subjects were given a choice between multiple apps, one of which was a pre-existing app available in stores. The other options fulfilled the same purpose as the original, but with varying levels of advertising and privacy options at added costs. The results put a price tag on different levels of anonymity: Customers would pay $2.28 per app to conceal their browser history, $4.05 to conceal their list of contacts, $1.19 to conceal their location, and $3.58 to conceal the contents of their text messages. Eliminating advertising was worth $2.12 to a user.

The results of this study highlight an opportunity companies were already catching on to. AT&T, the fifth largest Internet service provider in the world, is carrying out an experiment in Austin, Texas, to turn privacy into a product. Customers can choose a “standard” package for a monthly fee of $99 or a “premier” package for a discounted $70, but the cheaper option comes with an agreement that the company will "use your individual web browsing information, like the search terms you enter and the web pages you visit, to tailor ads and offers to your interests.” The oddly branded services are otherwise identical. In other words, like Facebook or Google, the ISP will sell you to advertisers.

Here, the technology industry adage that “if you’re not paying for it, you’re the product” is doubled on itself. Buyers of AT&T’s premier package or a privacy-added app are both paying customers and businesses’ product.

These dollar amounts may not look huge—Savage and Waldman estimate that an app or service need only provide $5.06 in value to make it worth giving away our privacy for—but with millions of users, those fees add up. In the end, it’s a question of preferences: Would you rather pay less to get online or more to retain a degree of anonymity?

Internet neutrality frames the debate over tiered online access in a different way. “Neutrality” in this case means keeping everyone on the same Internet, not privileging those who pay more with faster speeds. But the Federal Communications Commission is currently considering new laws that would allow ISPs to sell “fast lanes.” Users wanting seamless streaming for Netflix (which currently constitutes as much as a third of all U.S. Internet traffic) could suddenly find themselves paying a surcharge for it.

ISPs are fighting against net neutrality, arguing that outlawing fast lanes actually stifles innovation. In a joint letter to the FCC, the heads of major telecommunications companies including Verizon and Time Warner explained their investment in the current regulatory framework. “We see an average of over $60 billion poured into cable, fiber, fixed and mobile wireless, phone, and satellite broadband networks each and every year,” they wrote. “And broadband gets better every year: the average broadband speeds jumped 25 percent in 2013 alone, highlighting there are no slow lanes in today’s Internet.” The Heartland Institute, a conservative think tank, suggests that net neutrality could cost the country 500,000 jobs and $62 billion over the next five years, with $55 in costs per month getting passed on to users.

Yet these costs have to be considered in context. Businesses are invested in turning Internet users into higher-paying customers instead of beneficiaries of a service that is now widely seen as a public good. Sure, putting into place new regulations for equal access to fast Internet or online privacy would mean some expense, but those measures would benefit the wider population of users—a much larger group than the signatories of the FCC letter.

If we depend on the Internet like we depend on electricity, then its integrity needs to be protected in the same way. This doesn’t necessarily mean canceling out the Web as a commercial ecosystem, but laws should ensure that efficient, anonymous access is a possibility for every U.S. citizen, not a paid-for bonus.

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