Wednesday, May 14, 2014

A cyncial take

Kevin Drum asks:
Anyway, that's my question. There's already a perfectly good, perfectly simple way for ISPs to recover the cost of providing lots of bandwidth: just charge the customers who use it. Existing peering and transit arrangements wouldn't be affected, and there would be no net neutrality implications. So why not do it? What am I missing?
My cynical answer is that there are a lot of markets that are large but for which service is sub-optimal (think New York City)  If you charge users by bandwidth, the people in these markets would likely end up getting a discount because they are light user simply because it is nearly impossible to be heavy users.  But everyone would like some internet access.

So this is a way to have your cake and eat it as well.  In markets with bad service you make money as a gatekeeper.  In places with good service, you recover cash from the content providers who use the capacity. 

If you are wondering if this sounds a lot like a monopoly or a lack of competitive markets, you are probably correct.   After all, cell phones (which appear to still have a competitive market) had absolutely no trouble rolling out bandwidth based pricing.  Customers grumbled, but everyone gave up and adapted to it. 

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