There has been quite the buzz on usage based internet pricing, primarily by Time Warner Cable in Austin/San Antonio area as a test market. With the emergance of streaming videos, television, and movies on demand, Internet services providers are starting to see how they can either curb this or capitalize on this. Once again the faithful and non abusing users are being punished because of a few people taking advantage of their ISP services. However there are no restrictions considering it is an “unlimited service” from ISPs and that is what they advertise, we should say people are taking full advantage of their bandwidth not abusing.

What does this mean to OnLive? Well this could affect this if more ISPs go to this model of pricing. ISPs have for years tried to clamp down on how we use the Internet from peer to peer file sharing to using a VPN connection on a residential line. Omar L. Gallaga of Austin360.com give his take on the who usage based pricing from Time Warner Cable. Back to OnLive, this coule be detrimental to OnLive if this goes nationwide. OnLive as well as many other gaming on demans systems do require quite the bandwidth. OnLive requires at least a 5 Mpbs connection for high definition. That would be about 63% of my 8 Mpbs connection from Comcast Cable.

Well the speculation from Gallaga is that perhaps Netflix or Xbox would make deals with ISP to have immunity with them. If you connect to these places you will not be charged. We shall see what happens. We shall see what happens in Austin.