At the same time, I do think they're a bad idea for everyone. If we had usage-based billing ten years ago, I don't think there would be a YouTube or a Netflix. Electronic distribution of games would probably not exist. Major image sharing sites like imgur would not be nearly as popular. Webapps would be less common. People would be much more likely to delay software updates or forgo them altogether.
I think that usage-based billing does represent a major impediment to the continued advancement of the Internet. This is certainly a major blow to any future where cloud-based backups or video sharing are more common or see new applications.
It is true that many of the people reading this thread are top bandwidth users overall, but I question whether their peak-hour contribution to e.g. Netflix congestion is any more or less than the average Netflix subscriber. I also do not accept the claim that advanced users are "subsidized" by the other subscribers. If anything, the higher monthly fees paid for 50, 60, or 100mbit/s are helping to pay for the physical costs of the lower tiered users.
That said, usage-based billing is not a terrible idea, as long as the metering is 100% transparent, standardized, and as dirt cheap as it really should be. The second biggest argument I have against metered billing is that it's mentally taxing to have to think about every bit you send and receive. The first argument against it is that it's a technique to gouge customers.
The vitrol is aimed at unreasonably high fees. Quite justifiably, I might add.
You know what, let's do that usage-based billing, the difference between 5GB and 300GB would be about 1%, because of the small cost of the shared pipe. This is just more bullshit from Comcast, unheard of anywhere else on this planet.
Maybe I'm biased, but I can't see where I went wrong.
It's not your personal pipe. The bandwidth on the segment connected to you is shared with your neighbours. Upgrading the bandwidth on your segment costs money, ergo we do not want you to use "too much" bandwidth. Pre-emptively curbing bandwidth usage with threats of and/or actual overage fees, ensures higher operating margins and puts off upgrade expenses, thus increasing profits.
Not perhaps the answer you were hoping for, but hey, corporations gotta make money, right?
You are conflating two very separate issues and the statement is false. Being a top-1% user by volume does not mean that you are subsidized by everybody else.
Network costs are diven by peak usage, i.e. when there is a risk of congestion. Peak usage is during primetime and the majority of users are online then. Thus almost everybody uses the network at the same time and it makes sense to share the cost equally. Hence nobody is subsidizing anybody else.
Here's the data to back me up:
"In order to investigate these issues, we took real user data for all the broadband customers connected to a single aggregation link and analyzed the network statistics on data consumption in five-minute time increments over a whole day.The data was shared by an ISP in North America who wanted to understand its own network usage. Our analysis tracked both data consumption (i.e. total MB downloaded) and bandwidth usage (i.e. Mbps being used).
...
42% of all customers (and nearly 48% of active customers) are amongst the top 10% of bandwidth users at onepoint or another during peak hours."
Source: diffeaction Analysis http://www.fiberevolution.com/2011/11/do-data-caps-punish-th...
Secondly, the problem isn't with 'usage-based billing' in general. The problem is that this isn't 'usage-based', because the only thing that has changed from the previous billing is a over-priced fee tacked on for people who go over the cap. True usage-based billing would allow for people to actually save money when they used little bandwidth a month, but this doesn't allow for that.
WAY back when cell phones were first getting popular I got one through my employer. It was a personal phone, but they allowed employees to get personal phones through their business plan. I paid a very modest monthly flat fee and then $0.10/minute for usage. No caps. $0.10/minute for voice sounds absurd today but then it was quite reasonable and the costs were completely predictable.
The person being subsidized is the computer-illiterate person who uses no data except for during peak times and then requires several tech-support calls a month.
Usage based cost makes sense for electricity or water. If you use more, they have to send more to your house. It's not the same for bandwidth, unless the total amount is over the available bandwidth.
The marginal cost to Comcast is close to zero, the question is how to account for upgrades if everybodys usage goes up enough to exceed network design capacity.
Regular folk unexpectedly think that the cost of normal network upgrades are included in this so called "monthly subscription fee", but Comcast has real accountants with actual hard copy degrees on their walls that tell us that we need additional "bandwidth usage fees" and "overage fees" to pay for it in the US.
I have a feeling they just have more people in the "peak users" category than the "over 300gb" category, so its easier to piss off the smaller group.
With more people cutting the cords, this is only going to get worse -- people come home and watch TV. I personally don't want to pay for a 10 lane highway with 5% utilization 90% of the day just to avoid 2 hours of traffic, so I definitely don't want to pay for internet that guarantees 50 mbps or whatever even during peak hours (if I wanted that I'd lease a line - I just want a cheap connection to the internet). I don't want to pay the ridiculous cost of over engineering. I'd rather see solutions that embrace the reality of that situation.
There are a few problems with this. Firstly, very few users are going to cut down peak usage, because it's during primetime that they have the free time and inclination to use the Internet.
Secondly most people don't even know what a GB is. Thirdly, you assume usage-based fees are meant to curb usage rather than drive profits.
> or services would offer a way to cache episodes locally during the night so you can watch them after work.
Since we are basically talking Netflix here, this is never going to fly with the DRM guys.
This is not a technical problem, as you can see, since the desided outcome can be reached, if you are willing to ignore some legal niceties...
As to metering, that might work if there were competition. But, as has been repeatedly pointed out, there is little or no effective broadband competition in the U.S.
"No capacity" has a similar spectre in the last mile as to that which was recently demonstrating in the Netflix inter-connection choking scandal. Although last mile requires more outlay than "fixing" Netflix, the money is there (currently in outrageous profits).
The major ISP's have had years -- and very significant government subsidies and other favors -- to fix this. They haven't. We need the infrastructure to keep our economy competitive. Time to (re)regulate, and to open the field up to municipal development and competition.
(and fwiw, i have no interest in defending comcast. i bring this up mainly inform myself about the circumstances.)
Also, common carrier phone services only had usage charges for long-distance service.
Someone else just needs to come out with better and cheaper services. Comcast sucks and is milking their monopoloy.
Not really true. Maybe within an exchange--don't really remember. But there were certainly usage-based charges even within an area code.