Techdirt has an interesting article about how many US internet service providers have sold their customers unlimited bandwitch, and then backed out on that promise.

They argue that they have to do traffic shaping (which basically consists of slowing down the traffic from certain applications, mostly P2P software) in order to allow other applications to benefit from that reduction in traffic (people can access their email due to the slower P2P speeds).

There are two major issues when ISPs cap your bandwidth (which arguably has the same effect as traffic shaping — it prevents you from using up all the bandwidth, thereby giving everyone their fair slice of the pie).

However, there are two major problems with this.

1. If they can’t provide you with unlimited bandwidth, they shouldn’t have sold it as that in the first place. Telecommunications companies are infamous for doing this, not only with internet service, but also with other services such as mobile services (for example, you sign a three year contract, where they give you unlimited evening minutes, and then a year later reduce those minutes to 1000 per month).
2. Internet service should not differ from any other kind of service. Would you be OK with your home phone provider telling you could only talk for five minutes at a time if your call was not business-related? The service provider should not be the ones choosing what you do with the bandwidth they provide you.

Perhaps the answer to ISPs throttling particular types of traffic (for example, BitTorrent traffic) is just to encrypt it all.