3 ms·

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 als

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.
  - sethrin 8y ago
    For residential service, there is no reason to expect a 1:1 reservation. This would be extremely wasteful. The exact number is not relevant, but residential bandwidth is oversold as a matter of course. Talking about capex and aggregate costs also seems to be drifting from the main theme here: whatever it costs to double the network's capacity is going to be pretty circumstantial, and not directly relevant to the topic of consumer pricing. <i>Ceteris paribus</i>, the marginal cost per individual is still negligible, and the price per unit of provisioned bandwidth only loosely coupled to cost. ISPs charge extra for higher-tier packages because having only one tier of service is leaving money on the table, and because they can.

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.
- sethrin 8y ago
  For residential service, there is no reason to expect a 1:1 reservation. This would be extremely wasteful. The exact number is not relevant, but residential bandwidth is oversold as a matter of course. Talking about capex and aggregate costs also seems to be drifting from the main theme here: whatever it costs to double the network's capacity is going to be pretty circumstantial, and not directly relevant to the topic of consumer pricing. <i>Ceteris paribus</i>, the marginal cost per individual is still negligible, and the price per unit of provisioned bandwidth only loosely coupled to cost. ISPs charge extra for higher-tier packages because having only one tier of service is leaving money on the table, and because they can.