Needed: Toll Plazas On The I Way

On Aug. 7, America Online Inc., the world's largest online service, went dark for 19 hours. The system crashed while AOL was upgrading its equipment to deal with the skyrocketing demand for Internet connections. Deprived of E-mail and connections to the World Wide Web, users complained bitterly, making the front pages across the country.

While it's unlikely this bug will be repeated, the AOL outage is a warning for the entire Internet. The demand for Internet-related services is soaring faster than anyone predicted just a couple of years ago. Every Internet company is being forced to add capacity to handle the mushrooming volume of E-mail messages, Web pages, and video.

But upgrading a complex network like the Internet is not as simple as buying a bigger refrigerator. It's like adding a room onto your house while you are living in it. The process is noisy, messy, and disruptive. Moreover, building more capacity won't solve the Internet's congestion problem. Adding bandwidth will only encourage more people to get online. Net engineers are finding out what transportation planners have known for years: Building a new road to alleviate traffic jams simply attracts more cars. So after the new road is finished, traffic remains just as sluggish.

In the case of highways, the best solution for congestion is to build more roads--while charging cars and trucks for usage. This is done both directly, by levying tolls, and indirectly, by taxing gasoline and diesel fuel. Such usage fees keep the congestion under control by providing an incentive to drive less, and they generate funds to build and maintain roads.

It's time for Internet users to start paying for usage. Right now, most subscribers pay a set charge for a connection, not according to the amount of data they send--but that's changing. Already, the largest Internet providers are beginning to bill smaller providers for handling their data. Soon, these fees will trickle down to individuals. Forcing Net advertisers to pay for huge broadcasts of messages will cut down on junk E-mail. And just as trucks pay more in tolls, heavy consumers of bandwidth such as videos and phone calls should pay more. That will discourage extravagances like broadcasting rock concerts over the Internet.

The shift won't be easy. Nobody likes tollbooths or gas taxes. But if the Internet is to thrive, that's what is needed.

Before it's here, it's on the Bloomberg Terminal.