Linked by fran on Tue 1st Feb 2011 23:04 UTC
Internet & Networking There is a falling out between governments & ISPs on the one hand and consumer groups and companies like YouTube and Netflix on the other. Lately more punitive measures affecting these companies and consumers have emerged that include increased throttling, greater per-usage billing and lower internet caps. The internet as whole is struggling to find a self-sustaining business model that supports the rising speed and bandwidth requirements of consumers and online media purveyors. The conflict boils down to who should pay and to what degree they should pay.
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RE: Simple proposal
by alcibiades on Wed 2nd Feb 2011 08:43 UTC in reply to "Simple proposal"
Member since:

Why, in economic terms, should you ban usage charges? I understand why you may not like them. But what is the rationale for banning them? It is really not at all clear why someone who downloads 10s of movies in a month should pay the same as someone who downloads a few emails. Why someone who listens non-stop to the radio over the net should pay the same as someone who only uses email.

The proposal to ban usage charges is what? As a matter of law or telecoms regulation?

Why don't we ban usage charging for beer. That way people who only have one a couple of times a week would subsidize those who really, really enjoy their drinking?

Reply Parent Score: 3

RE[2]: Simple proposal
by Soulbender on Wed 2nd Feb 2011 10:45 in reply to "RE: Simple proposal"
Soulbender Member since:

Why don't we ban usage charging for beer. That way people who only have one a couple of times a week would subsidize those who really, really enjoy their drinking?

You're my pick for president.

Reply Parent Score: 2

RE[2]: Simple proposal
by Yamin on Wed 2nd Feb 2011 14:25 in reply to "RE: Simple proposal"
Yamin Member since:

In 'economic terms', it is very difficult to price data to have an accurate cost. It's certainly not a cost per GB. I could go into more detail here... but basically... it's very difficult to price it. It would be some overly complex formula with time of day usage, destination of the packet (peering), current congestion, infrastructure pricing... All to create what is an artificial price. There is really no cost to data once the infrastructure is in place... with the exception of transit charges.

But more importantly, it is too tempting for a natural monopoly like an ISP to abuse it's power to get overuse charges from users beyond what it actually costs.

Also ISPs can abuse their power to prevent competition for voip, video services... as many ISPs are involved in many markets. This is what happened in Canada. Netflix sets up... suddenly Rogers, Bell... decide to start charging for usage above 25 GB... basically making Netflix not usable.

Lastly, I don't believe the regulators should play numbers games or deal in details when regulating. They should make big blanket regulations and enforce them. That's my own political view of regulations.
And I don't want government regulators having to go into pricing details and trying to figure out if ISPs are abusing their monopoly or pricing correctly for data...

Given that an ISP can throttle traffic... just do a big blanket regulations and ban usage charges and avoid the whole mess.

It's simple. They all have the network equipment to do it.

Reply Parent Score: 2

RE[3]: Simple proposal
by zlynx on Wed 2nd Feb 2011 15:08 in reply to "RE[2]: Simple proposal"
zlynx Member since:

It certainly is a cost per GB!

When the ISP is using oversubscription, and almost everyone does, then each of their customers can use the full network speed, one at a time. But they cannot all use it, all of the time.

Oversubscription is a completely legitimate way to set up the network. It lets each customer enjoy the high speed connection as long as they don't use it for long periods of time.

This setup directly translates into a cost per usage. The user who uses large amounts of bandwidth is taking it away from the other users. To support all users using full bandwidth would require additional build-out of routers, fiber, etc.

The real cost of a 20 Mb Internet connection used 24/7 is much, much higher than $30/month, so anyone paying for cable, be glad you're oversubscribed.

Reply Parent Score: 3