4 ms·

What you are describing is merely competition. Everyone pays the same marginal amount per kWh for a given amount of electricity—ignoring minor details like conn

What you are describing is merely competition. Everyone pays the same marginal amount per kWh for a given amount of electricity—ignoring minor details like connection charges and time-of-day pricing. Yes, having more aggregate demand will tend to raise prices for everyone, but that doesn't amount to a subsidy. Internet access is typically billed as "unlimited" so those who use it very little pay a high rate per bit transferred, while those who use it a lot pay a low rate. Some of this is due to the base cost of providing service (fixed last-mile connection costs incurred whether the line is used or not) but the rest is a subsidy from low users to high users. How much of each is debatable; the costs of home internet are largely concentrated in the last-mile connection costs rather than bandwidth and data centers, yet the bandwidth still isn't free.

newaccount74 4y ago
> that doesn't amount to a subsidy It's really the same thing as in the flat rate case. It's a bit less unfair since the cost rises linearly, but it's not enough to leave small consumers unaffected. People who consume small amounts of a utility still pay more because of people who consume a lot.
- nybble41 4y ago
  > People who consume small amounts of a utility still pay more because of people who consume a lot. No, they really don't. People consuming small amounts and large amounts both pay more due to higher aggregate demand. If it weren't for the many small users the aggregate demand would be lower and the large users would also be paying less—do you consider that a subsidy in the opposite direction? No, of course not—because a price being bid up by competing consumers is not what is meant by the term "subsidy". Now, if you banned large users from the system, or imposed discriminatory pricing as you previously suggested for the purpose of keeping prices low for the small users, that would be a subsidy: interference in the market to benefit one group at the expense of another.

newaccount74 4y ago

> that doesn't amount to a subsidy It's really the same thing as in the flat rate case. It's a bit less unfair since the cost rises linearly, but it's not enough to leave small consumers unaffected. People who consume small amounts of a utility still pay more because of people who consume a lot.

nybble41 4y ago
> People who consume small amounts of a utility still pay more because of people who consume a lot. No, they really don't. People consuming small amounts and large amounts both pay more due to higher aggregate demand. If it weren't for the many small users the aggregate demand would be lower and the large users would also be paying less—do you consider that a subsidy in the opposite direction? No, of course not—because a price being bid up by competing consumers is not what is meant by the term "subsidy". Now, if you banned large users from the system, or imposed discriminatory pricing as you previously suggested for the purpose of keeping prices low for the small users, that would be a subsidy: interference in the market to benefit one group at the expense of another.