> There are a lot of pricing structures that can achieve this. A lot of them are really just the same thing using different terms. One of the better ones is to

> There are a lot of pricing structures that can achieve this. A lot of them are really just the same thing using different terms. One of the better ones is to price based on "maximum average consumption rate during peak hours", i.e. the most of the resource you're entitled to use over a few minute period during peak hours. What you're going to need to A/C your place during peak hours on the hottest day of the year. Because that's how much capacity they need to build, and then have all the rest of the time too. Well, it may well be one of the better ones, depending on what you are comparing it to, I guess, but I would think it has a pretty serious flaw: Anyone who has the option to not use any power during peak hours would get to extract value from the grid without contributing anything to its construction or maintenance, so those people or businesses who are in the unlucky position of needing power at certain fixed (peak load) times would end up paying the full cost of building and maintaining the grid that everyone is using. That doesn't exactly sound like a fair way of sharing the costs, does it? While the cost of building the grid is determined by peak load, it's not like building a grid that could only deliver the base load would be free to build. So, while it makes sense to have a price structure so that users who cause the load to exceed the base load pay for the additional costs of building a higher power grid, I don't see why it is appropriate to make them pay the total cost of building the grid, let alone how that leads to optimal use of resources. Now, your argument might be that anyone is free to just buy a bunch of batteries for their peak-load needs and thus avoid paying for their electricity (up to the point when everyone does so, so the global load curve becomes flat, thus it's peak load time 24/7, and everyone will start paying based on the energy taken from the grid after all ...)--which is true, of course. But what's the point of that? What is the problem with the grid having storage built-in and billing you for the use of that capability, rather than incentivizing/forcing you to install your own storage? In particular when some forms of storage can be cheaper than batteries, but completely unrealistic for personal use (such as pumped-storage hydroelectric). And all of that is completely ignoring that a flat load curve isn't actually desirable anymore with renewable sources, as the generation capacity is just not capable of providing that (without massive overprovisioning). In particular the A/C example that was a big problem for traditional power grids has the nice property that you need A/C roughly proportionally to the intensity of sunshine--and luckily, the generation capacity of solar panels is also roughly proportional to the intensity of sunshine. And not only does this mean that additional power from that source is available exactly when it is needed for that purpose--it doesn't even need a stronger distribution system in the case of roof-top solar, as the power is generated right where it is needed, so no need to move it long distances. > But the single thing that all of the good pricing strategies will have in common when there is no marginal cost and you're just amortizing the fixed cost of building capacity is that off peak usage is unmetered. Which is specifically the thing that "GB per month" caps get completely wrong. Well, yes, "GB per month" caps don't create any incentive towards a particular shape of the customer's load curve on any scale smaller than a month, that's maybe not quite optimal. But off-peak usage being unmetered is a pretty bad solution as well in that regard, as that obviously doesn't amortize anything, and creates an incentive to avoid certain useful investments because of a free-rider problem (you won't start a business that needs bandwidth at peak times if the fact that you have to subsidize other users of the infrastructure makes your business unprofitable). Also, while that approach doesn't solve that problem, that doesn't make it useless. Most consumers as a matter of fact have a relatively flat load curve on the scale of a month (both for electricity and for bandwidth), and a cap influences the amplitude of the curve, and thus does influence infrastructure costs. And realistically, at least most bandwidth uses of consumers have little oppportunity for incentivizing a flatter load curve. Much of the consumer traffic is videos and streams on demand, which users generally don't want to watch at 3 am, and also don't want to pre-order to watch it the next day. Of course, it would still be nice to have the option of buying cheap traffic during the night for uses that can profit from that, which obviously would also benefit the ISPs to some degree.