A few years ago in the early days of broadband in the UK, all broadband packages were sold based on their speed. A 512 Kbps residential user would typically pay around £25-30 per month, and faster 1 Mbps or 2 Mbps connections were charged at business rates of about £70-100 per month. This was partly due to the fact that the wholesale costs from BT for these services were very different. In 2004 BT Wholesale changed its charging scheme to usage and capacity-based charging prompting a change in how broadband was sold to end users by flattening the pricing of the end user broadband connections regardless of speed, and charging more for the 'central pipe' (the connection from BT's network to the ISP which provides Internet access). Each ISP had to choose either a 'Usage Based Charging' or a 'Capacity Based Charging' model. The former has a lower fixed cost but the ISP incurs a charge on the amount of traffic their users pass through the network whilst the latter is a higher fixed charge with no usage charges.
These changes resulted in ISPs offering faster connections at lower costs, but it also meant that some kind of limiting factor had to be imposed to ensure costs did not exceed revenue from each user. A 'pay for what you use' type environment has become more popular, and this market has been growing over the last year. NTL however have tried to induce a reversal of this trend by announcing their 10 Mbps product is 'unlimited'. These unlimited products are supposedly offering users the same service they used to receive before these new usage-based products came in to affect.
It should however be noted that this is not always the case and the word 'unlimited' is usually very subjective and subject to small print. This term is still commonly used since it is a very effective marketing tool. An article on TheRegister (The 'free' fairy story) goes in to some details on how Toucan advertise their broadband services as unlimited, without any formal limits, but may restrict over-use of heavy users. After some probing, the actual point that they impose some rate limiting on 'heavy users' is found to be surprisingly low. This problem isn't just limited to Toucan, but they are an example of what is becoming more common.
Many broadband services that classify themselves as 'unlimited' are bound by restrictions of what is normally known as a 'Fair Usage Policy' which usually means that after a certain amount of data has been downloaded by a user in a month, either a warning will be sent to the user to inform them that their usage is deemed excessively high along with a request to curb their usage, or some form of traffic shaping is imposed such that traffic originating from other users of the service are prioritised to ensure they do not receive a degraded quality of service due to a few heavy users. ISPs often neglect to make it clear that if you are a very heavy user, you may find your Internet connection is about the speed of a dial-up connection. Readers may remember much discussion of PlusNet's traffic shaping and Sustainable/Fair Usage Policy last year, and the stir it caused amongst some of their users.
The Advertising Standards Authority (ASA) recently ruled in favour of Vodafone in a complaint against them based on the definition of 'unlimited' in connection to mobile 3G data ransfers. Within their brochure advertising 3G data cards with unlimited usage, a footnote linked to the word 'unlimited' claims that a 'Fair usage of 1GB applies'. The ASA deemed this as acceptable usage of the word 'unlimited' as the policy imposed is fair and stated within the advert. This type of bending of the definitions of words to suit the needs of the marketing of a product should cause users concern. The more common it becomes, the more those companies who feel particularly responsible about their clear product descriptions will feel they have no choice but to use the same terminology in fear of users believing their products are more limited unless they describe them as 'unlimited', even though the opposite may well be true.
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