Originally Posted by Wiggin
Yes, the prices are high, perhaps higher than they should be. But by what rational explanation do you think flat-rate pricing is an economically fair pricing structure? it costs money to upgrade equipment to handle the higher bandwidth that some folks use. If everyone still only used a few MB of data a month, these companies wouldn't have to spend billions to upgrade the infrastructure. Why should my mom, who uses very little data for email and a little web browsing, pay the same amount as someone who is streaming Netflix movies every night?
And what does the government creation of the internet have to do with anything? Do you think the government paid for all the cables, routers, switches, and computers that keep it running?
Just as disturbing to me as the greedy corporations is the perverse level of self-entitlement felt by so many people. You must also think that we should have all you can consume electricity, gas, water, food, etc.
That said, what we do need is strong, clear neutrality regulations, to prevent someone like Comcast from giving their own services, such as Pay-per-View, a leg up against the likes of iTunes and Netflix. The bandwidth used for those services should be considered on an equal footing as the other providers. That will prevent them from jacking up bandwidth prices to hurt the competition.
First, bandwidth/data usage is not analogous to gas, electricity, water, food, etc. usage. All of those things you compared it too are tangible items, which are actually consumed. Bandwidth also is not like a road because packets traveling over it do not cause wear and tear in the way and to the degree that cars and trucks would. Bandwidth is more like a warehouse
It costs a certain amount to build a warehouse that can hold a certain amount of stuff, and you need to build the warehouse big enough so that you can fit everything into it at your busiest times, but, once you build it, the costs of maintaining it and keeping it running are relatively fixed and independent of how much stuff is moving through it. Sometimes an air conditioner blows out and you have to replace it, if it looks like business will increase, you have to build an extension, and you have to pay your staff even when they are just playing solitaire. But those costs are pretty much the same regardless of how full the warehouse is at any moment and how much stuff moves in an out of it.
So, it's not a perverse sense of entitlement that makes people think they ought not have to pay metered rates for what ought not be a metered service. It's an understanding of what they are really paying for and the realization that by metering it like gas, electricity, water, the ISPs are effectively charging them in a way that doesn't reflect "consumption" of anything, just maximizes profits.
If charges for connection and bandwidth usage were really reflective of the costs to ISPs, people wouldn't complain about metered usage, but they aren't. Reflective of actual costs would mean that there's a flat rate for service with a very small incremental rate based on usage. By "very small", I mean something around pennies per GB, which is the true incremental cost incurred due to people streaming netflix videos 24/7 vs. someone who only does a little light web browsing and email. And the reason the incremental cost is small is because when they acquire any customer, they have to build out the network the same amount as for any other because they can't predict individual bandwidth usage, only the likely average, so each customer has the same base cost and data usage only increases that cost a tiny amount.
The current tiered usage rates don't reflect this at all. They also very directly undermine network neutrality. Consider the pay-per-view service you mention above. If the incremental charges incurred by the customer make netflix streaming expensive compared to pay-per-view, which is delivered over the same network but not subject to usage charges, then the carriers have effectively made competing services less attractive by making them more expensive.
However, in one sense, bandwidth ought to be treated like gas and electricity. Sources are usually limited and it has become an essential service, thus allowing carriers to engage in exploitative pricing. It might well serve the public good if rates for bandwidth were subject to the same regulatory approval process as public utilities.