In South Texas, Time Warner Cable customers have been given “usage trackers” that tally up all a household’s internet use. Customers who sign up for a light plan of 5 gigabytes of broadband, the equivalent of two high-definition movie downloads, are rewarded with a $5 discount each month if they don’t go over. If they do, they pay $1 for every additional gigabyte.
“We’re moving away from one-size-fits-all,” said Jon Gary Herrera, a Texas spokesman for the cable company, which now tends to call itself a broadband company instead.
Some of Time Warner Cable’s competitors are moving in the same direction toward pricing tiers for higher speeds and larger amounts of broadband at home. Usage-based billing may be advantageous for a companies bottom line but it is definitely the opposite for customers watching more and more video on the Web, as well as companies like Netflix that distribute content. Some believe that as customers are made more aware of how much broadband they’re using each month, they’ll use less of it. This will in turn protect traditional forms of entertainment distribution but will also have the negative effect of discouraging new Internet services.
Executives at cable and broadband providers say it is in their best interest to make broadband a must-have product. “The exploding growth of online video usage undercuts any argument that cable is standing in the way of this business,” said Brian Dietz, a spokesman for the National Cable and Telecommunications Association, the industry’s trade group.
But some government officials aren’t convinced. The Justice Department’s antitrust lawyers are conducting an investigation into the cable industry’s treatment of online video companies with an eye toward deterring anticompetitive behavior. Some analysts say the investigation could actually accelerate the move to usage-based billing.
Usage-based billing is seen by some as a fairer alternative to broadband caps, a term most closely associated with Comcast, which had been enforcing a limit of 250 gigabytes per Internet customer per month. Although only a small minority of customers ever exceeded the cap, it became a lightning rod for competitors like Netflix, which accused Comcast of unfairly favoring its own services.
Comcast said this spring that it would start to test usage-based billing. “Our network is not an infinite resource, and it is expensive to expand it,” David L. Cohen, a Comcast executive, said at the time.
Along with news and entertainment, the futures of entire industries — commerce, health care and transportation — are being built atop a broadband foundation. Companies big and small are coming up with ways to get faster broadband to more people; many people believe that broadband speeds will inevitably improve as time goes on, just as computer chip speeds have.
Critics say that the marketplace lacks sufficient competition, which keeps the price of broadband higher than it otherwise would be. They wonder whether strategies like usage-based billing will worsen what is already an economic barrier for some Americans. “It’s like locking the doors to the library,” said Nicholas Longo, the director of Geekdom, a new collaborative work space for small companies in San Antonio.
Time Warner Cable started testing usage-based billing in San Antonio four months ago by offering the $5 discount to lighter users. Customer service representatives at a suburban call center are now trained to ask new customers about how they use the Web; once uses (listed on a work sheet) like “Internet gaming,” “watching TV/movie clips” or “video chat” are mentioned, callers are steered toward a pricing plan with unlimited bandwidth.
The Netflixes of the world are wary of these moves, though there may be little they can do. Concerns about both caps and usage-based billing have already caused one would-be online video competitor, Sony, to rethink its plan to sell a bundle of cable channels over the Internet.
Dish Network and other companies have been preparing plans for similar bundles, which could help cause the so-called unbundling of television that consumer advocates have dreamed about for decades. But “these guys have the pipe and the bandwidth,” said a Sony Network Entertainment executive, Michael Aragon, referring to cable and broadband providers, while speaking at a meeting sponsored by Variety in April.
Still, Mr. Aragon added, “We do believe there’s a business model out there.”
Millions of poor Americans may still be left without health insurance despite the Supreme Court upholding President Obama’s signature legislative accomplishment, the Affordable Care Act. The Supreme Court ruling did not give individuals the option to opt of the law’s mandate but states were granted the option to not expand their Medicaid programs leaving coverage for at least 17 million poor people in limbo.
Republican officials in more than a half-dozen states said they are either opposed to or had serious doubts about expanding Medicaid, regardless if the federal government picks up all the costs in the first few years and covers at least 90 percent of the expenses after that.
In writing the law, Congress assumed that the poorest uninsured people would gain coverage through Medicaid, while some people with slightly higher incomes would receive federal subsidies to buy private insurance. Now, poor people who live in a state that decides to not expand its Medicaid program will find themselves unable to obtain either Medicaid or subsidies.
Under the law, subsidies are available to people with incomes from the poverty level up to four times that amount, but not to people with incomes below the poverty level ($23,050 for a family of four).
Governors in Kansas, Nebraska and South Carolina, among other states, have said they would have difficulty affording even the comparatively small share of costs that states would eventually have to pay.
Gov. Dave Heineman of Nebraska, a Republican who is chairman of the National Governors Association, indicated that he was against expanding Medicaid eligibility.
“As I have said repeatedly, if this unfunded Medicaid expansion is implemented, state aid to education and funding for the University of Nebraska will be cut or taxes will be increased,” Mr. Heineman said.
In South Carolina, Rob Godfrey, a spokesman for Gov. Nikki R. Haley, said, “We’re not going to shove more South Carolinians into a broken system that further ties our hands when we know the best way to find South Carolina solutions for South Carolina health problems is through the flexibility that block grants provide.”
In New Hampshire, State Representative Andrew J. Manuse said he and other Republicans were already working to block the expansion of Medicaid. “We can’t afford it,” Mr. Manuse said. “It’s as simple as that. Thank God the Supreme Court gave us an option.”
Republican governors in Wisconsin and Louisiana said they would wait to see the results of November’s elections before deciding whether to expand Medicaid, in the hope that Mitt Romney will be elected president and undo the health care law. “That’s why we have refused to implement the Obamacare health exchange or the Medicaid expansion,” said Gov. Bobby Jindal of Louisiana.
“Because the expansion is such a good deal for states, they should move forward and cover low-income adults in their states,” said Judith Solomon, a health policy analyst at the Center on Budget and Policy Priorities, a liberal research and advocacy group. “But what happens in states that do not go ahead and provide coverage? The poorest adults — primarily parents and other adults working for low wages — will be left out in the cold.”
Richard J. Umbdenstock, the president of the American Hospital Association, said that hospitals around the country would lobby for the Medicaid expansion. “If states do not avail themselves of this opportunity,” he said, “the federal money will go to other states, and hospitals will be left with large numbers of the uninsured.”
Nancy M. Schlichting, chief executive of the Henry Ford Health System in Detroit, said she “absolutely will lobby” for the expansion of Medicaid. She said she expected Gov. Rick Snyder, a Republican, to support the expansion, but she added, “he may have trouble” getting it through the Michigan Legislature.
Congress has repeatedly expanded Medicaid in the last 25 years, and states often had new sources of revenue, like money from the settlement of lawsuits against major tobacco companies. “But this time is different,” said Dennis G. Smith, secretary of the Wisconsin Department of Health Services. “Virtually all states are struggling to sustain their current Medicaid programs.”
Illinois, facing severe financial problems, has already delayed Medicaid payments to some health care providers.
“Many hospitals are not being paid for six months or more after they provide services and file claims,” said Danny Chun, a spokesman for the Illinois Hospital Association. “Illinois is dead broke.”