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This is a for profit business not a limited common ressource being shared. What you are missing here is that the adjustment is not low usage users subsidising

This is a for profit business not a limited common ressource being shared. What you are missing here is that the adjustment is not low usage users subsidising high usage users, it’s OVH margins. Nobody is being subsidised. Low usage users just make OVH more money than high usage users. OVH doesn’t mind because per user costs are actually low and they are already competitive at that price without adding more complexity to their product mix. Users which would lead to an actual loss are rate limited.

immibis 2y ago
If you pay $5 and use $100 of bandwidth costs, you are in fact being subsidized by other users, not by margins. We don't know what OVH pays for bandwidth though.
- michaelt 2y ago
  If I order some shoes from Amazon, I find them uncomfortable, and I return them for a full refund causing Amazon to incur a loss - have I been "subsidised" by other customers? Personally I would say if Amazon makes a profit selling you a book and makes a loss shipping me some shoes which I return, the loss was paid by Amazon, not by you.
  - wang_li 2y ago
    Yet book prices will be adjusted so, on net, Amazon does not lose money.
  - Aachen 2y ago
    The comparison is more apt if you gained something (because the bandwidth user gets a product out of it), say by having worn the shoes for a day and doing this every day so you get free shoes for life. Then, yes, it's pretty clear the paying customers are the ones footing your bill
- RandomThoughts3 2y ago
  But nobody can do that. OVH doesn't let you be a large net negative. What happens is roughly that: - You are costing 1$ (bandwidth, etc.). You make OVH 4$. They are happy. Nobody offers you a cheaper alternative so you are stuck paying 5$ anyway. - You are costing 4$ (bandwidth, etc.). You make OVH 1$. They are happy as marginal costs are low anyway. - You are costing more than 5$. OVH severely rate limit your bandwidth to cut their costs and wait for you to leave because the service is now useless to you.
saurik 2y ago
> What you are missing here is that the adjustment is not low usage users subsidising high usage users, it’s OVH margins. I did not miss this, and it was part of my point: the only reason this makes any sense at all is because these providers are ripping people off on bandwidth, which is how they have a margin so large that they feel a need to hide it from people under this kind of ridiculous pricing abnormality. What is awkward is just accepting that and helping to make it worse by advocating for making it easier to kind of hide that fact: bandwidth is a commodity product, and these pricing games aren't pro-consumer because they somehow help people not have to worry about one month getting ripped off too much... they are anti-consumer because they enable the perpetuation of the state of affairs wherein people get ripped off in the first place. The bandwidth providers know this, but they--of course ;P--like their excessive margins... but, if you just stopped claiming this was pro-consumer and realized what was actually going on here, the idea that a margin so excessive as to be able to essentially make the usage for the median user irrelevant should indicate a nigh-unto-ridiculous level of market distortion. Like, we shouldn't sit around and just tolerate these margins. And that this particular pricing trick helps make these margins a bit more stomached by people really sucks! And in some sense I get it that it does make it easier to stomach... but... only because I think people are just buying into the idea that this must be a reasonable price :(. And--even then--it doesn't fix the other problem I talked about (which I explicitly hedged as being in the world where the price wasn't set up to gouge everyone): when Facetime came out, it overnight was going to cause everyone with an iPhone to suddenly need more bandwidth, and so network providers temporarily needed to ban it or charge more for it; we see the same thing with the step up to video streaming services from basic web browsing, leading to providers feeling a need to zero-rate. The reality is that bandwidth IS a limited common resource being shared at that provider--the same as any other product where the price isn't being distorted: this is the whole reason we use markets for this stuff in the first place--and the pricing of it at different providers should encounter market forces to drive it down closer to cost... except we are trapped in a local minimum here by people who refuse to understand that unlimited schemes cost more, not less.
- RandomThoughts3 2y ago
  You don't actually tolerate high seller margins. Hosting is a competitive market. If there was significant gains to be made by being more aggressive on the low end of the market, providers would already be doing it (and they are - OVH 5$ offer is quite aggressive). There is a reason nobody actually offers a better deal.

immibis 2y ago

If you pay $5 and use $100 of bandwidth costs, you are in fact being subsidized by other users, not by margins. We don't know what OVH pays for bandwidth though.

michaelt 2y ago
If I order some shoes from Amazon, I find them uncomfortable, and I return them for a full refund causing Amazon to incur a loss - have I been "subsidised" by other customers? Personally I would say if Amazon makes a profit selling you a book and makes a loss shipping me some shoes which I return, the loss was paid by Amazon, not by you.
- wang_li 2y ago
  Yet book prices will be adjusted so, on net, Amazon does not lose money.
- Aachen 2y ago
  The comparison is more apt if you gained something (because the bandwidth user gets a product out of it), say by having worn the shoes for a day and doing this every day so you get free shoes for life. Then, yes, it's pretty clear the paying customers are the ones footing your bill
RandomThoughts3 2y ago
But nobody can do that. OVH doesn't let you be a large net negative. What happens is roughly that: - You are costing 1$ (bandwidth, etc.). You make OVH 4$. They are happy. Nobody offers you a cheaper alternative so you are stuck paying 5$ anyway. - You are costing 4$ (bandwidth, etc.). You make OVH 1$. They are happy as marginal costs are low anyway. - You are costing more than 5$. OVH severely rate limit your bandwidth to cut their costs and wait for you to leave because the service is now useless to you.

saurik 2y ago

> What you are missing here is that the adjustment is not low usage users subsidising high usage users, it’s OVH margins. I did not miss this, and it was part of my point: the only reason this makes any sense at all is because these providers are ripping people off on bandwidth, which is how they have a margin so large that they feel a need to hide it from people under this kind of ridiculous pricing abnormality. What is awkward is just accepting that and helping to make it worse by advocating for making it easier to kind of hide that fact: bandwidth is a commodity product, and these pricing games aren't pro-consumer because they somehow help people not have to worry about one month getting ripped off too much... they are anti-consumer because they enable the perpetuation of the state of affairs wherein people get ripped off in the first place. The bandwidth providers know this, but they--of course ;P--like their excessive margins... but, if you just stopped claiming this was pro-consumer and realized what was actually going on here, the idea that a margin so excessive as to be able to essentially make the usage for the median user irrelevant should indicate a nigh-unto-ridiculous level of market distortion. Like, we shouldn't sit around and just tolerate these margins. And that this particular pricing trick helps make these margins a bit more stomached by people really sucks! And in some sense I get it that it does make it easier to stomach... but... only because I think people are just buying into the idea that this must be a reasonable price :(. And--even then--it doesn't fix the other problem I talked about (which I explicitly hedged as being in the world where the price wasn't set up to gouge everyone): when Facetime came out, it overnight was going to cause everyone with an iPhone to suddenly need more bandwidth, and so network providers temporarily needed to ban it or charge more for it; we see the same thing with the step up to video streaming services from basic web browsing, leading to providers feeling a need to zero-rate. The reality is that bandwidth IS a limited common resource being shared at that provider--the same as any other product where the price isn't being distorted: this is the whole reason we use markets for this stuff in the first place--and the pricing of it at different providers should encounter market forces to drive it down closer to cost... except we are trapped in a local minimum here by people who refuse to understand that unlimited schemes cost more, not less.

RandomThoughts3 2y ago
You don't actually tolerate high seller margins. Hosting is a competitive market. If there was significant gains to be made by being more aggressive on the low end of the market, providers would already be doing it (and they are - OVH 5$ offer is quite aggressive). There is a reason nobody actually offers a better deal.