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Hulu started out with a simple mission: to try and reduce illegal copying of TV shows, by providing a way to watch the most popular shows online legally, after watching some ads.

It was a tremendous success. So much so that the TV companies tried to cripple it, introducing mandatory waiting periods before you could watch popular shows. But even that hasn’t been enough to stop the site from growing in popularity and revenue. The TV networks have decided it’s time to take the next step: no more Hulu unless you pay for a bundle of cable channels.

They hope that this will be enough to force customers to keep paying for cable bundles. I think they are deluded, and it will just drive people back to illegal copying of TV shows.

Comcast has launched an Internet-based video-on-demand service on Xbox 360. They have also put download caps on their residential Internet customers.

And as predicted, they have decided to exempt their own commercial service from the download caps, while subjecting competitors like Amazon and Netflix to the caps.

This is how the ISPs plan to battle against Internet TV: by using caps to maintain their monopoly. It’s why we needed net neutrality rules.

Usage-based billing is back for Time Warner customers in South Texas. The new plan is described as optional, and gets you a $5 discount per month if you’ll agree to a usage cap of 5GB. Overages are still an utterly unreasonable $1 per GB.

There’s an associated promise: “Time Warner Cable customers will always have access to unlimited broadband at a flat monthly rate.”

Of course, exactly what that rate will be in a year or two is anyone’s guess.

Now, how about some IPv6?

I’ve been waiting for an ISP to do this since the whole data cap saga started. Finally, one of them has. Canadian ISP Shaw has announced its own streaming “Movie Club”, and declared that its data caps don’t apply to data from its own service.

This is what it’s really all about. The cable companies know that the Internet is the future of TV, and don’t want to become just a data pipe provider. Data caps allow them to cripple services like Netflix, Amazon Unbox and the iTunes store, and make their own offerings look cheaper and more useful.

WIRED reports that AT&T starts capping usage on Monday. DSL and U-Verse customers will be limited to 150GB and 250GB respectively, and charged $10 per 50GB after that.

As caps go, that’s pretty reasonable–$10 per 50GB is only about a 100% markup. Still, I’m glad I’m unmetered.

Comcast has launched its new “ultra-fast” 105Mb/s Internet service, “Extreme 105″. That’s actually a good speed, comparable to broadband Internet available in Korea.

There are a couple of catches, though. It’s $105 per month, and you can only use it at full speed for 5 hours before you hit your data cap.

$105 per month for 5 hours of high speed Internet? Sign me up… No, wait, don’t.

Ars Electronica has published an article comparing Internet usage caps around the world.

…British Telecom (BT) are abandoning usage caps. Apparently they aren’t necessary to have a profitable broadband business after all.

If you thought you were going to avoid usage caps by avoiding the cable company, think again. As of May 2nd, AT&T will be capping its U-verse Internet service at 250GB a month. Regular DSL customers will be capped at 150GB a month.

This is nowhere near as bad as Time Warner’s old proposal, of course. 250GB is a fairly reasonable limit for most people, and the overage charges are closer to reasonable too: $10 for every additional 50GB.

Still, that’s 20¢ per GB, where each GB costs them about 3¢. It’s an astronomical markup, and it’s sad that it’s comparatively sane for the industry.

Cancel Cable: How Internet Pirates Get Free Stuff

I’m not sure this book needs any further comment…