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The form of the argument is tangential, but the validity of "argument from analogy" is dependent on the strength of the analogy. Few analogies hold up to substa

The form of the argument is tangential, but the validity of "argument from analogy" is dependent on the strength of the analogy. Few analogies hold up to substantial scrutiny, and the specific examples cited were all fairly distant in kind from the product in question. I certainly don't mean to dwell on that more than might be relevant, but I did think it reasonable to offer this characterization, since you had similarly characterized the OP's form of argument. Nothing in the OP's comment can be inferred to be a denial of diminishing returns: if there is "wiggle room", then you should give them the benefit of the doubt. Also, there's no inherent reason to expect that the cost of bandwidth would be anything close to linear. The cost to the ISP does not necessarily increase due to the provisioned speed of a modem, and the used bandwidth is in most senses unmetered. Also, for what it's worth, whether the OP feels like they're getting a good deal is more-or-less independent of the actual mathematics at hand. There is every reason to believe that bandwidth is a special case: the cost to either the customer or the ISP is not linear with either usage or provisioned speed. However, since the parent's argument is not inconsistent with the concept of diminishing returns, it does not seem valid to arrive at that inconsistency by inference, when other more charitable interpretations exist. P.S. I'm afraid I don't understand your use of the word "arrant".

greggyb 8y ago
I guess we'll have to disagree on the interpretation of, "Yes I have better (maybe 1.5 to 2 times as fast) Internet than my parents who are in Europe, but I also pay 3 times what they pay for it." To me, the most charitable interpretation of this is that 3x price is a negative that diminishes the argument made previously that speeds are higher in the US. For that to be true, then there is an implicit argument that the price should be lower. Either this argument is there, or the parent is simply complaining. I don't see much other possibility. Again, I am not arguing by analogy but offering a general case, movement against which must be justified. As was mentioned in a cousin post, and as I mentioned, there are different technologies in play: https://news.ycombinator.com/item?id=18668662 https://news.ycombinator.com/item?id=18668662 With this, why should one expect that the cost for ~2x speed on cable should have any relation to ~x speed on DSL. As for your argument on bandwidth, you seem to treat it as unlimited. It is absolutely a scarce resource and often overprovisioned. The network gear of any ISP only supports so much throughput. It is not an uncommon experience on cable to see drops in throughput at peak hours. Price and artificial bandwidth restrictions for individual modems (your package level) are the tools to handle such congestion and scarcity. Regarding arrant, I mistyped errant, a reference to knights-errant.
- sethrin 8y ago
  No, I am not arguing that bandwidth is unlimited. That would be prima facie impossible. I'm somewhat confused and distressed to read a summation of my argument which implies such an absurdity; it seems objectionable in the context of a calm and reasoned debate. I'm sure that you meant no offense. I'm not incapable of arguing absurdities, but I hope that this is rare, or at least I hope that you may assume so for courtesy's sake. Bandwidth is not unlimited, but the point seems irrelevant: costs do not scale linearly, in any sense, for any participant. It does not cost the ISP more or less if my modem is provisioned for 10 or 100 Mbps. It may or may not cost them more money if that bandwidth is actually used, but very few individuals have any large impact on their ISP's operating costs. The aggregate utilization does affect this, but the marginal operating cost per customer is much closer to "fixed/negligible" than "linear in proportion to usage". Correspondingly, customers are not billed based on usage (in the normal case). The implicit argument is certainly that the price should be lower, but they did not argue a linear price relationship. There is no reason to believe their argument would be invalidated if that were the case, but they did not.
  - greggyb 8y ago
    When an ISP leases bandwidth to a customer, they must reserve some amount out of their total available. They may reserve the full amount they have leased, or they may reserve some portion of it. Either way, the reserve is finite and proportional to the actual total bandwidth (the proportion may be 1:1, which is the simplest, but the proportion does not matter for this discussion). The marginal cost of provisioning me 100Mbps is therefore not limited to the cost of the hardware and setup, but is the opportunity cost of reserving bandwidth for my use. They may not lease this reserve to anyone else. This cost is reflected in the price. Additionally, we can observe that ISPs tend to grow. Even in a fixed area, they will upgrade hardware over time to increase total available bandwidth. This is driven by demand by existing customers for more bandwidth and new customers. This hardware is very expensive to provision. In fact, I expect that going from total bandwidth x to 2x likely costs more than twice as much as x. I would also argue that it likely costs at least thrice as much. Products of high fixed cost and finite supply will never be sold at marginal cost (or at least not for anything approaching profit). They will approach marginal cost as N increases (where N is the size of the finite supply). Another way we can think of a customer leasing bandwidth is that they are purchasing a share of that large and expensive network equipment. I posit that these are valid ways to look at it. The first, because there is not infinite bandwidth, ISPs must price it like the scarce good it is - prices are how we address scarcity. The second, because ISPs must not price their service as if they are never making another network upgrade. Again, I am willing to haggle on the cost of 2x performance. I would make all of these arguments for any value under 3x price, as I mentioned above, which is clearly stated in the original parent. There is no need to stick to a strict linear interpretation, and I have said as much more than once now.

greggyb 8y ago

I guess we'll have to disagree on the interpretation of, "Yes I have better (maybe 1.5 to 2 times as fast) Internet than my parents who are in Europe, but I also pay 3 times what they pay for it." To me, the most charitable interpretation of this is that 3x price is a negative that diminishes the argument made previously that speeds are higher in the US. For that to be true, then there is an implicit argument that the price should be lower. Either this argument is there, or the parent is simply complaining. I don't see much other possibility. Again, I am not arguing by analogy but offering a general case, movement against which must be justified. As was mentioned in a cousin post, and as I mentioned, there are different technologies in play: https://news.ycombinator.com/item?id=18668662 https://news.ycombinator.com/item?id=18668662 With this, why should one expect that the cost for ~2x speed on cable should have any relation to ~x speed on DSL. As for your argument on bandwidth, you seem to treat it as unlimited. It is absolutely a scarce resource and often overprovisioned. The network gear of any ISP only supports so much throughput. It is not an uncommon experience on cable to see drops in throughput at peak hours. Price and artificial bandwidth restrictions for individual modems (your package level) are the tools to handle such congestion and scarcity. Regarding arrant, I mistyped errant, a reference to knights-errant.

sethrin 8y ago
No, I am not arguing that bandwidth is unlimited. That would be prima facie impossible. I'm somewhat confused and distressed to read a summation of my argument which implies such an absurdity; it seems objectionable in the context of a calm and reasoned debate. I'm sure that you meant no offense. I'm not incapable of arguing absurdities, but I hope that this is rare, or at least I hope that you may assume so for courtesy's sake. Bandwidth is not unlimited, but the point seems irrelevant: costs do not scale linearly, in any sense, for any participant. It does not cost the ISP more or less if my modem is provisioned for 10 or 100 Mbps. It may or may not cost them more money if that bandwidth is actually used, but very few individuals have any large impact on their ISP's operating costs. The aggregate utilization does affect this, but the marginal operating cost per customer is much closer to "fixed/negligible" than "linear in proportion to usage". Correspondingly, customers are not billed based on usage (in the normal case). The implicit argument is certainly that the price should be lower, but they did not argue a linear price relationship. There is no reason to believe their argument would be invalidated if that were the case, but they did not.
- greggyb 8y ago
  When an ISP leases bandwidth to a customer, they must reserve some amount out of their total available. They may reserve the full amount they have leased, or they may reserve some portion of it. Either way, the reserve is finite and proportional to the actual total bandwidth (the proportion may be 1:1, which is the simplest, but the proportion does not matter for this discussion). The marginal cost of provisioning me 100Mbps is therefore not limited to the cost of the hardware and setup, but is the opportunity cost of reserving bandwidth for my use. They may not lease this reserve to anyone else. This cost is reflected in the price. Additionally, we can observe that ISPs tend to grow. Even in a fixed area, they will upgrade hardware over time to increase total available bandwidth. This is driven by demand by existing customers for more bandwidth and new customers. This hardware is very expensive to provision. In fact, I expect that going from total bandwidth x to 2x likely costs more than twice as much as x. I would also argue that it likely costs at least thrice as much. Products of high fixed cost and finite supply will never be sold at marginal cost (or at least not for anything approaching profit). They will approach marginal cost as N increases (where N is the size of the finite supply). Another way we can think of a customer leasing bandwidth is that they are purchasing a share of that large and expensive network equipment. I posit that these are valid ways to look at it. The first, because there is not infinite bandwidth, ISPs must price it like the scarce good it is - prices are how we address scarcity. The second, because ISPs must not price their service as if they are never making another network upgrade. Again, I am willing to haggle on the cost of 2x performance. I would make all of these arguments for any value under 3x price, as I mentioned above, which is clearly stated in the original parent. There is no need to stick to a strict linear interpretation, and I have said as much more than once now.