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Comment by Negitivefrags | Hacker News Reader

This entire problem comes down to the fact that internet isn't priced the way other utilities are.

You don't pay your water company a fixed rate based on the size of the pipe to your house. You pay based on water actually delivered. You don't pay your electricity company based on the maximum number of amps that can flow down the wire, you pay for the electricity consumed.

Internet should be paid in bytes delivered. Then all the incentives will be aligned for all parties.

High usage end users pay for more of the network than low usage end users, which they should because they are the ones putting strain on it.

The ISPs would then prefer to transport the larger content that users demand because they will be paid more for it. Thus they are also incentivised to create more and better infrastructure to deliver it.

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Internet should be paid in bytes delivered. Then all the incentives will be aligned for all parties.

That sounds like the interests will greatly favor the ISP. They can leave prices the same, institute a monthly data cap then gouge users on their overages. Yes, I can definitely see how this would be a huge win for customers...

Unlike water and electricity, the internet isn't a finite resource in the sense that the data will 'run out' if we use it too much. The people generating content are paying on their end and the users consuming content are paying on their end. We don't need to be careful not to overuse the internet, lest we leave future generations without the ability to use it.

I agree but unlike electricity or water where quality of service is regulated (water quality etc) internet service is not.

We would need some sort of regulation to force ISPs to provide a pipe that doesn't suffer random packet loss or connection problems. In addition you would need some way to make ISP upgrade to better pipes or you will be stuck with 56k for ever.

I believe all new homes in the US are now equipped with a minimum if a 200A circuit by law which would equate to your internet speed minimum being regulated.

> I agree but unlike electricity or water where quality of service is regulated (water quality etc) internet service is not.

It is very regulated. Starting a new utility that relies on public property (easements for landlines or spectrum for over the air) requires cutting an epic amount of red tape. In fact, it is such a messing process that only the very politically well connected companies can even consider entering the market.

It's definitely regulated. It just isn't regulated in the way that you want.

Big difference is that most households in a neighborhood use about the same amount of water or the same amount of electricity. I'd feel safe saying that 95% of my neighbors fall within a factor of 2 of my usage.

Water and electricity usage is also very predictable.

But Internet usage can vary a lot between households and between days. I could easily see there being quite a few people consuming a factor of 10 less bytes than me and also there being some number using a factor of 3 or so more than me, and this can also change a lot from one day to the next.

I don't like this idea because I'm a power user and would stand to lose in this transition but I realise that's not a good argument.

Here are some thoughts:

Other utilities usually come with a base fee, ie. even if I were to consume no electricity I'd still pay some amount of money per month. The total cost is (base fee + usage fee). So it's not purely based on consumed resource amount.

If we were to transition to a consumption based fee model to realign incentives, it would stand to reason that the amount of revenues the telcos should get should not change significantly. I expect that the telcos would not be able to resist gouging their customers if consumption based fees were to comeback (competition might drive down prices... eventually).

Water and electricity are quite cheap (in first world terms). There's an incentive not to be grossly wasteful with either, but that's it, really. It'd be nice if internet consumption fees could work in a similar way.

>> Water and electricity are quite cheap (in first world terms). There's an incentive not to be grossly wasteful with either

Interesting. I know that Americans use the most water, by far, compared to other countries, but do they also use the most internet?

The people who use 1TB/month on their home cable internet remind me of people like Lance Armstrong who spend $1,600 on their water bill in Austin.

> competition might drive down prices

If there was any competition.

There is a big difference between bandwidth and water. After being built (which I grant can be substantial), the bulk of the costs to the water provider is the volume of water provided. If my neighbor uses twice the water I am, he's costing twice the same and should be charged the same.

But not all bytes are equal. If I am pulling 1 Linux DVD at 3am and my neighbor is pulling down 2 per night at 3am, the costs he is placing on the system are not twice mine. The actual electricity costs between moving his bits and my bits are negligible.

Instead, the cost is in building out the pipe to handle the maximum load each evening when everyone is pulling videos down and/or Skyping to Grandma. And even then not all bytes are equal. I might really want the voice packets of my Skype session to go through right now, but be able to tolerate several second of lag on the video I'm watching from Netflix, while letting the video of my Skype call degrade as needed.

I don't think you can put ISP regulations into one simple sentence. They need a more complicated and thus expensive regulatory regime. And, yes, the more complicated, the more subject it will be to lobbying pressure from people with different views from you. It still strikes me as the least-bad solution.

EDIT: Water and electricity providers do care about peak usage somewhat. Water companies need to keep up pressure, and electric companies need to keep the electrons flowing no matter what. But the water company can tolerate a 5% dip in water pressure, and electric companies have ways of, say, disabling AC units to juggle demand during especially high periods of usage.

I think we need some way of discouraging the single biggest consumers of the shared resource (such as charging them more) during peak usage while still providing incentive for the ISP to increase capacity. Lots of people fear that the ISPs would just use this to increase revenue instead of to properly ration a shared resource. I totally understand that fear because I trust my ISPs about as far I can throw their headquarters. But other providers of shared resources with much more predictable demand patterns still have ways of dealing with demand surges, so I don't see how ISPs could hope to function in the long-term without some kind of peak-demand management.

I am based in the UK and it is exactly how it is charged for on the consumer side, I can choose how fast I want my delivery to be (1mb/s -> 80mb/s) and also the monthly total consumption (10GB -> 20GB -> 40GB -> "unlimited").

http://www.productsandservices.bt.com/products/broadband/pac...

I don't see how that's much different than the usual here in the US. You're paying monthly for a connection, variable fee based on speed of that connection, and then you have a data cap. I don't see how that's paying based on consumption.

So they are offering an average of 4, 8, or 16 kb/s?

Dialup is faster than that!

This method also incentivizes ISPs doing their damndest to get rid of the lowest consuming tier of customers, even if there is no other service available (seeing as how they've managed to monopolize service carrying in most municipalities).

I essentially do pay by-the-byte. I have Suddenlink cable in Texas, and I get a bandwidth cap of 350gb for $70, with each additional 50gb at $10.

I've heard similar about Comcast and the rest, but no one's put two and two together.

Landline phones generally have a fixed rate. You can use it 24/7 to call at a fixed price.

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