As high-speed Internet service providers grope for a profitable business model, by far the most controversial development in recent months concerns a proposal to limit the amount of material customers can upload and download.

Rogers Communications of Toronto announced it would introduce such a "bit cap," probably in June, and hinted broadly it would be about 5- or 6-gigabytes per month. Rival Sympatico would say only that a bit cap is "one of the things we're looking at."

The rationale, both companies say, is that their service was never intended for the heavy use that is becoming common among a growing number of customers. ISPs pay for the amount of data they forward to, and receive from, the major backbone links that connect their servers to the rest of the global Internet. The customer's monthly fee is calculated to cover what the ISPs consider to be an "average" traffic level for e-mail, Web surfing and an occasional file download. It can become a major cost for ISPs when a customer starts transferring enourmous amounts of information over that connection on a regular basis.

Rogers Communications senior vice-president of sales and marketing, Alek Krstajic, describes how some Rogers subscribers run file-sharing software — such as Napster heirs BearShare, Limewire and Morpheus — all day long, uploading and downloading music, games and even massive movies and software programs. Others are are running on-line businesses using their connections, generating traffic that Rogers feels should be part of its higher-priced business package.

"There are people taking up to 30GB per month," Mr. Krstajic said in horror. "That's obscene!"

Mr. Krstajic and Sympatico executives call these kinds of people "abusers," saying the residential broadband system was never "intended" for that kind of heavy use.

But, subscribers retort, just what did the broadband suppliers think they were selling in the first place? Ads by cable and digital subscriber line carriers touted always-on connections, with no hint of a limit. Their very speed meant that large files could be downloaded very quickly, relieving the bottlenecks created by slow connections.

Sympatico's recent TV ad campaign is a prime example of what bit-cap critics perceive as crossed wires between the marketing and accounting deparments at high-speed ISPs. The activity in Sympatico's ad, in which musicians in different parts of the world engage in a real-time "on-line jam" with each other, is so bandwidth-intensive that it portrays a kind of high-speed paradise the "abusers" can only dream about. (Recently, Bell has taken to adding a disclaimer to the ads, suggesting this kind of activity could happen in theory, sometime in an unforeseeable future.)

Limiting the volume of material uploaded and downloaded, broadband activist Chris Weisdorf said, "is like buying a car and discovering that during the night someone had snuck in and replaced the engine with a lower-powered one." Mr. Weisdorf's Toronto-based Web site, called the Residential Broadband Users' Group (www.rbua.org), acts as a clearinghouse for high-speed users' complaints. He meets regularly with broadband suppliers to demand explanations and results.

Rogers' Mr. Krstajic retorts that 90 per cent of his company's subscribers never download more than 3GB per month, and so a 5GB cap is "very generous."

The penalties for abuse

Mr. Krstajic does not yet have an idea about what the company would do with the remaining 10 per cent of their subscribers, the "abusers." They may eventually have to pay extra every time they break the 5GB limit or simply be forced to subscribe to a more expensive account.

Over the years, ISPs have dealt with the situation by tinkering with the customer agreement. At first, the residential account was imagined to be one computer connected to the Internet — if there were two, then that constituted a network and a network meant the user was a business and should pay for a business account. But changes to the Windows operating system and the burgeoning sales of computers made home networks easy to create, and they have become so common that ISPs were forced to accept customers with home networks to avoid cutting off an ever-growing portion of their subscriber base. (An Ipsos Reid survey in January said 20 per cent of Canadian families have networked their home computers and share access to the Internet.)

The same is happening to servers, powerful computers that can host everything from modest personal Web sites all the way to e-commerce operations. Some savvy users have attached servers to their residential Internet cable connection, using them to run e-mail and file-sharing services as well as their small businesses. Newer versions of Windows include mini-servers, making the process at least as easy — and often downright irresistible — for PC owners.

Even small peer-to-peer file-sharing programs, such as BearShare, are technically servers themselves.

Rogers, for one, has had to redefine its policy on servers. A few weeks ago it identified some 12,000 to 15,000 subscribers running servers, and sent them toughly worded letters; but Rogers did this without a very clear picture of how much traffic each server was generating, and several such letters were received by activists who are members of Mr. Weisdorf's RBUA organization. RBUA snarled in protest, and Rogers, forced to backtrack, said that RBUA was "interpreting it incorrectly." Although the company is sticking to its ban on servers, it has not closed accounts running "casual servers," taking action only against those who used them excessively.

"Simply," Mr. Krstajic said, "if you're not abusing the network, then your server is not going to be flagged and caught by Rogers."

Scrap over caps

Hence the strategy of bit caps, which involves limits on both uploading and downloading files. A 6GB per month bit cap, for instance, could be set up to limit users to 5GB of downloads and 1GB of uploads to discourage users of peer-to-peer file-sharing programs.

Sympatico will say only that "there's a lot of talk" about bit caps, but nothing concrete.

Still, the talk makes it sound like a decision is just around the corner: "The pipe is only so big," Sympatico spokesman Andrew Cole said, "and it's being used by other people [through file-sharing services]. Putting in limits makes sense."

But how to implement bit caps?

The answers are technical, and not easy. Caps depend largely on the configuration of software and hardware installed by the service providers.

After announcing it would institute bit caps in April, Rogers said it ran into technical problems, and is now likely to introduce them in June. In the wake of the AtHome debacle, Rogers is being forced to rebuild its system from the ground up. As a result, despite the delays it is considerably ahead of the competition from a technical point of view: It can pick the most useful, cap-capable system it wants, given that it has no choice but to adopt new technology anyway.

Caps also go hand-in-hand with selling cable bandwidth to third-parties, companies that could in turn resell Rogers' cable service to areas not serviced by Rogers. The Canadian Radio-Television and Telecommunications Commission would dearly love to see this happen, and so Rogers is updating its system with the introduction of DOCSIS (Data over Cable Service Interface Specification) later this year. DOCSIS, a cable specification that is designed to standardize cable modems for TV, HDTV and Internet, is a creation of the Multimedia Cable Network System, of which Rogers is a partner.

But anything the providers do to control use is bound meet resistance — and even fury — from their increasingly savvy customers.

The kind of language used by Mr. Wesidorf during his exchange with Rogers, when that company issued its edict to ban all servers, is typical. "Disallowing subscribers from running casual servers on their own computers," he wrote on his Web site, "in light of the fact that the servers aren't affecting their fellow subscribers' service, is vile, vile, draconian and totally unnecessary. This action serves no purpose except to annoy, anger and irritate subscribers who follow their end-user agreement to the letter."

The battles lines have been drawn.

In part three of this globetechnology.com series, Jack Kapica examines how much high-speed Internet access is really worth, and how much it is likely to cost Canadians in the coming months as ISPs grope for a profitable business model.