4 ms·

I'm not sure that makes sense - bit consumed neither reflects the value of the service to the customer, nor the unit economics of the provider. You want a serv

I'm not sure that makes sense - bit consumed neither reflects the value of the service to the customer, nor the unit economics of the provider. You want a service level guarantee (99.9% available, with some extra wiggle room for peak hours and degradation. With electricity, you're paying for energy generation, plus grid maintenance. With internet, you're only paying for grid maintenance.

em3rgent0rdr 8y ago
How about bid on a variable price per bit? Just like is done with bitcoin transactions. If you are sending an important file, in an important conference call, or are receiving an important download that you don't want to wait long for, then you choose to pay more to get faster and more reliable service, but if you are streaming a youtube or doing something in the background, then you select a lower price for moderate speed & reliability.
- RickSullivan 8y ago
  You're describing the exact thing net neutrality seeks to prevent--pricing based on the type of data being sent. I think it's dangerous to let those with deep pockets prioritize their traffic over mine.
  - em3rgent0rdr 8y ago
    > "it's dangerous to let those with deep pockets prioritize their traffic over mine" If only a finite amount of bandwidth is available to the world, then yes, the rich will be able to spend more to take bandwidth from us. However more cable can always be added, so what would actually happen is that the pie would grow.
    - paranoidrobot 8y ago
      > However more cable can always be added, so what would actually happen is that the pie would grow. This assumption is the same one behind energy grids, and assumes an ideal world with no bad actors. Instead, what happens is that incumbent players with the deepest pockets buy up all the (relevant) competition and then corner the market on capacity.
- na85 8y ago
  That sounds like a user-hostile, free market dystopia.
mcculley 8y ago
It reflects value to me. I want my connection to be as fast as possible. If I pay a fixed monthly fee, the incentive to the ISP is to throttle my connection at some point. If they have no unit economics, why do some ISPs throttle and cap after hitting a maximum?
- charleslmunger 8y ago
  A wired ISP's costs are primarily determined by capital improvements to their network, and increasing the reach of their network. The marginal cost of providing service to someone in a neighborhood that already has cables built is effectively zero - unless that households additional usage at peak hours causes congestion at the trunk. The econ 101 solution to this is variable pricing based on hours of the day, to shift consumption to off peak hours. However, that's not attractive to ISPs for a few reasons: 1. Customers don't have a good understanding of how much data various activities use. 2. Just like airline tickets, you may be paying substantially more or less than your neighbor for the same service. ISPs do not want to add additional pricing transparency or control - they would much rather adjust the rate as high as they can regardless of usage, then lower it for individuals newly signing up for service or when existing customers threaten to cancel. 3. Many large ISPs also own media and cable TV businesses that are in direct competition with high bandwidth services like Netflix. Putting caps on that apply regardless of time of day directs users to their own offerings, which do not count towards the cap. It's also a hedge to gain revenue as cable dies, and extract rents from it's replacement. 4. If you run a gym, your best customers are the ones who show up least often - the same is true for the current ISP model. A cap is a good way to shed heavy users and provides a chilling effect on existing users who don't have a good grasp of computer networking.
- learc83 8y ago
  The OP didn't say they have no unit economics--just that bits consumed doesn't reflect their unit economics.

em3rgent0rdr 8y ago

How about bid on a variable price per bit? Just like is done with bitcoin transactions. If you are sending an important file, in an important conference call, or are receiving an important download that you don't want to wait long for, then you choose to pay more to get faster and more reliable service, but if you are streaming a youtube or doing something in the background, then you select a lower price for moderate speed & reliability.

RickSullivan 8y ago
You're describing the exact thing net neutrality seeks to prevent--pricing based on the type of data being sent. I think it's dangerous to let those with deep pockets prioritize their traffic over mine.
- em3rgent0rdr 8y ago
  > "it's dangerous to let those with deep pockets prioritize their traffic over mine" If only a finite amount of bandwidth is available to the world, then yes, the rich will be able to spend more to take bandwidth from us. However more cable can always be added, so what would actually happen is that the pie would grow.
  - paranoidrobot 8y ago
    > However more cable can always be added, so what would actually happen is that the pie would grow. This assumption is the same one behind energy grids, and assumes an ideal world with no bad actors. Instead, what happens is that incumbent players with the deepest pockets buy up all the (relevant) competition and then corner the market on capacity.
na85 8y ago
That sounds like a user-hostile, free market dystopia.

mcculley 8y ago

It reflects value to me. I want my connection to be as fast as possible. If I pay a fixed monthly fee, the incentive to the ISP is to throttle my connection at some point. If they have no unit economics, why do some ISPs throttle and cap after hitting a maximum?

charleslmunger 8y ago
A wired ISP's costs are primarily determined by capital improvements to their network, and increasing the reach of their network. The marginal cost of providing service to someone in a neighborhood that already has cables built is effectively zero - unless that households additional usage at peak hours causes congestion at the trunk. The econ 101 solution to this is variable pricing based on hours of the day, to shift consumption to off peak hours. However, that's not attractive to ISPs for a few reasons: 1. Customers don't have a good understanding of how much data various activities use. 2. Just like airline tickets, you may be paying substantially more or less than your neighbor for the same service. ISPs do not want to add additional pricing transparency or control - they would much rather adjust the rate as high as they can regardless of usage, then lower it for individuals newly signing up for service or when existing customers threaten to cancel. 3. Many large ISPs also own media and cable TV businesses that are in direct competition with high bandwidth services like Netflix. Putting caps on that apply regardless of time of day directs users to their own offerings, which do not count towards the cap. It's also a hedge to gain revenue as cable dies, and extract rents from it's replacement. 4. If you run a gym, your best customers are the ones who show up least often - the same is true for the current ISP model. A cap is a good way to shed heavy users and provides a chilling effect on existing users who don't have a good grasp of computer networking.
learc83 8y ago
The OP didn't say they have no unit economics--just that bits consumed doesn't reflect their unit economics.