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Comment by sliverstorm | Hacker News Reader

There's always a vitriolic reaction in geek communities to usage-based billing. I'm used to it by now. My personal conclusion (as much as people shout at me otherwise) is that geek communities quietly realize they are top-1% users and their usage patterns are subsidized by everybody else, so a switch to usage-based billing represents a greater costs to themselves. You see that kind of thing in politics all the time.

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> My personal conclusion (as much as people shout at me otherwise) is that geek communities quietly realize they are top-1% users and their usage patterns are subsidized by everybody else

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...

I agree this is a major motivation for most of the people arguing against it. It is certainly mine. I switched to a business plan just to get away from caps.

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.

That was definitely true in the 90's and early 2000's. I don't think it's true anymore. Totally normal non-geeky people use absolutely enormous amounts of bandwidth on services like Youtube and Netflix these days. Unless you're some kind of torrent nut, your data usage patterns probably pale in comparison to that of the average joe watching sitcoms to wind down at night, and there are a lot more average joes than there are pirate hoarders.

First, I would assume services like Netflix are the largest consumers of bandwidth these days, and I know my wife generally watches more overall than I do. Unless you are specifically running some kind of server from home, or torrenting, I doubt most 'geeks' compete with video streaming on a usage basis.

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.

Yes, I could live with a flat per-GB charge. The caps and "overage" penalties are what is annoying. Why do companies set their customers up to feel like they are doing something "wrong" by using more of their services?

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.

My personal conclusion (as much as people shout at me otherwise) is that geek communities quietly realize they are top-1% users and their usage patterns are subsidized by everybody else

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.

Explain to me why this is wrong: the last mile is what costs a ton to ISPs (much less than what Comcast charges though) to build and maintain. So why would you make it more expensive for people to use their personal pipe, which just stands there anyway?

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.

> So why would you make it more expensive for people to use their personal pipe, which just stands there anyway?

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?

Also, because they can, because what other choice do you have aside from paying their ransom? Personally, I'm super happy that they're doing this, since it's more ammunition to shut down the TWC merger. Really really hope that their penny pinching backfires on them.

Usage based billing would be great. As far as I can tell, I have to spring $80/month even if i don't use anything. I appear to be hovering around 100g. $20/month would be great.

I'd expect the base rates to settle around current mean--or probably median--usage. Not sure what that is although some data here https://gigaom.com/2012/07/19/america-show-me-your-broadband... Suggests that 100GB might not be a bad stab but likely influenced by the more technologically sophisticated.

> There's always a vitriolic reaction in geek communities to usage-based billing

The vitrol is aimed at unreasonably high fees. Quite justifiably, I might add.

Unless you're on satellite - and backhaul satellite costs are absolutely absurd, I would know - you're not costing the ISP a fortune because you FTP data at 4 AM.

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.

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