Slashdot Mirror
Why Not To Meter Internet Access
A reader writes: "Many experts, especially pundit Bob Metcalfe, have argued that Internet access should be metered so that light users don't have to subsidize flat rates for heavier users. John Levine, author, expert and sewer commissioner, argues that this idea of metering the Internet flies in the face of 100 years of history."
John is too modest -- he was also involved in creating AIX for IBM. He's much more technical than he's usually portrayed as being (particularly when he writes Dummies books for Windoze lusers).
-russ
Don't piss off The Angry Economist
You pay a flat rate to be able to be online 24/7 if you so wish. There's no logic in charging per megabyte to lower the rate for the casual user. Besides, many Ethernet networks are switched these days, so every user has a nominal capacity no matter how much/little bandwith he uses.
Local phone companies don't charge metered rates for phone access, why should internet access companies? I'm a real light phone user, but I don't complain about paying $30/mo because someone else is on the phone 24/7 tying up more phone bandwidth.
--Mike
The cost of letter-delivery used to be calculated according to the distance the letter was going to go. One of the first things that Babagge did (way before he designed the difference engine) was point out that it cost more to do the calculation than it did to deliver the letter. Hence the flat rate stamp was born.
I would have thought that the same sort of thing is probably true for Internet access - especially since sending data down a wire is just as expensive as not sending data down the same wire, once the wire has been laid.
Instituting any metering system will raise the operating costs due to the trouble it takes to track usage.
And how exactly would you do that anyway. Total bits per month? Total online time?
Too many variables and way too open for abuse by unsavory providers. There's little wrong with a flat rate system IMHO.
Anyway, I suppose that really was your $.02.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Now I need to decide if its worth .05 cents to refresh slashdot to see if there are any new items of interest! Yes, lets destroy a system that works well for the masses to benefit those who cannot use AOL correctly.
I pay on my DSL connection right now.
I get 5 gig/month (which is ACTUALLY 5,000,000,000 bytes, not 5 gig). As the base package, and after that, I pay 7cents per megabyte(1,000,000 bytes).
So, if I download in excess of 5 gigs, it costs me an additional $70 per pseudo-gigabyte. Fortunately, I don't use that much, but my ISP offers a larger package of 20 gigabytes for an additional $20/month, but you must already be on the plan to take advantage of the package.
Why don't I use another ISP? NBTel is the only ISP in the province that will provide DSL.
(note: 7c/meg WAS the rate, I'm not 100% certain that it's still that high, but I haven't heard otherwise).
If you had a choice between an all-you-can-eat buffet, and an a la carte restaurant, both of which served the exact same food, and had the exact same level of service, what would you choose?
Sure, some people would say that they the buffet isn't worth it because they don't eat very much, but 90% of everyone I know would hit the buffet. And even light eaters binge sometimes, or go for the buffet because they don't know how much they're going to eat.
So the buffet restaurant makes major profits and the a la carte restaurant goes out of business (or starts offering a buffet, to stay competitive), which forces everyone to go to the buffet if they want to eat.
And then the light eaters of world whine about how buffets just aren't worth it for them, and want a la carte restaurants. But the restaurant owners already know that a la carte just isn't profitable enough, so they continue to stick to the buffet.
Who has the .sig "kids love the rich taste of content?" (or something like that) It's so appropriate here.
I can spell. I just can't type.
unless I can get a rebate on every byte/time unit spent downloading spam, cookies, and other advertizing I didn't want to transfer in the first place. :)
"Users love low flat rates". Gee, what a shock. People like free almost anything but herpes. Of course they want it for free. I'd like my car to cost $50, too. So what?
"...nearly all users pay flat rates regardless of their usage..." Not exactly. Dialup has an absolute bandwidth limit, there is only so much I can download over a 56k per month. ISDN has a higher limit, cable higher still, DSL, T1, T3, and up to OC48 (I suppose something exists beyond that). The rate I pay per month determines a ceiling on my usage.
"...metering would fly in the face of hundreds of years of history..." like metered mail (or stamps), pay by minute for long-distance telephone calls, and that is in the communications arena alone. We still have metered gas, electricity, and so on. Sounds like history is on the metering.
I don't even know where he was going with this content thing. It doesn't appear to be relevant. Maybe I'm wrong.
"Price discrimination..." way to coin a phrase that will automatically bias you against metering! Maybe he should have just used "Nazi Price Fixing" and been a little less subtle.
"...residential telephone users can get flat rate plans with free local calls..." Said flat rate varies wildly. How much you want to bet that if everyone got on the phone and began babbling 24/7, our "flat rates" would suddenly undergo an upwards shift?
"...one can add extra fiber capacity without limit..." conveniently ignoring the cost of the fiber, installation, repeaters, etc. That money has to come from somewhere. Until Slashdot posts a nice biotech story on trees engineered to grow fiberop, I won't be holding my breath on adding fiber for free.
"...When necessary, ISPs can discourage camping via monthly caps, limits on session length, or limits on peak time usage..." Oh, I see. So, instead of having the amount of time you spend on the net affecting the cost, you're going to use the cost limit the amount of time you have. Sounds a lot like metering to me.
"...As retail users move to DSL and cable connections, where each user pays for their dedicated connection, the pricing is invariably flat rate..." for now. It's a new technology. Examine the history of the catalytic meter in electrical service here. Once we have discovered the carrying capacity, you don't think this will change?
Aside from the huge problems above, this guy fails to look at what drives economies: limited resources. The world has limited resources. I cannot convert the entire bulk of the Earth into fiber optics. Electricity costs to make. We simply cannot take the current backbone, give everyone an OC48, and have them load up as much as they like. We will run out of our finite resource, the backbone (which is more like a backweb, I guess, given the multiple spines). All of these things cost. Adding new capacity costs. Lines can be saturated. It's just like bread ... it costs to make, and only so many can use it before it is all gone. Money is an abstract method by which we allocate our finite physical resources. Just because we would like a free meal doesn't mean that the universe is obliged to give us one.
I realize I should be addressing this Andrew Odlyzko, instead of the reviewer of the article, but, geez. I feel like a troll now.
The tricky part is how do you charge for this? There seem to be two schools, the "cost plus markup" and the "value" school. The telephone companies like the "value" approach, as it generates larger profits. One possibility is to meter usage, but make the rates time dependent. Charge full-rate during peak usage periods and much cheaper rates during off-peak periods.
I see that in other countries, too.
--
Did you ever look at CompuServe's prices back in the '80s? They were charging(IIRC, someone correct me) 6 bucks AN HOUR, and that's with 1200 baud access.
C'mon we have it good!
That's redundant.
Dr. Levine is also the moderator of the comp.compilers newsgroup, and the author of _Linkers and Loaders_, which is one of the few well-written books out there dealing with linkers and run-time loaders. (If you ever wanted to know all the fsck-ed up things with the Windows .EXE and .DLL format, read this book. :-)
You cannot apply a technological solution to a sociological problem. (Edwards' Law)
There are good ways to charge for service rendered, and we need them so long as there is network congestion. One proposal I saw years ago (sorry, too long, no pointer) is that each packet carry a bid indicating how much the sender will pay to have it sent. In each time slice, routers transmit the highest-bid packets and bill them all at the rate of the lowest bid transmitted. (Billing is accumulated and done in per-day chunks or something, not with additional packets.)
A user would have some way of adjusting their bids, maybe telling email clients to bid nothing and telling their video streaming to bid 10 cents per megabyte. The email would go through eventually, which is fine, and the video streaming would work without annoying pauses -- or the user would choose to increase their bid to make it so, to suffer with the pauses, or to watch the video later, when network demand is off peak.
There are other details -- packets coming back from servers might be billed to the requestor according to some token, or maybe they would be billed to the server, who would balance the charge by revenue in their own way -- ads, merchandise sold, charges to the web viewer, whatever.
I liked the proposal when I saw it. I'm certainly happy paying a flat rate for unmetered service, and maybe I'd continuing bidding zero for my packets most of the time. But it would be nice to have the means to get some things faster when I wanted to, and it is entirely reasonable that people who want better service should pay for it. If you want to know what you're going to pay, you could set all your bids to zero, or software could help you estimate what to bid to match your budget -- and could adjust those bids as you accumulated charges to ensure that you stayed under budget.
Note that when the network is not congested, packets are transmitted for free, even the highest-bid packets, because the router is able to transmit all requested packets in each time slice. So this system is really asking the people who want extra capacity the most to pay for it.
Being in the ISP business, I have a slightly different perspsective on the matter, although I intend to read the full paper, once I get a chance.
The reason that we've never offered a metered service, even though a few people have asked for one in order to reduce their bills, is because we've never considered the work needed to keep track of users usage for billing purposes to be worth the effort.
Two answer your question, there are two broad schemes used. The first is the peak bandwidth scheme (used by those who sell "burstable bandwidth") where you pay for the peak data rate you use usually with some averaging and time dependance. (In the most recent deal proposed to me it wasn't clear to me what the penalties were for exceeding the base rate.)
The second is to simply charge by the bit, possibly with a certain amount provided at the base rate. For example, for 1.5 MB DSL service, you might be given, say, 50 gig per month (which corresponds to a utilization of about 10% of your line's capacity) at the base rate (maybe $10 per month for the bandwidth only.) plus, say, $1 per gig after that. I wouldn't meter outbound traffic at all. There's no point. I also wouldn't meter the traffic from your premise to my equipment, so you can check your mail as often as you'd like or load the Web page that shows your current month's usage without fear that that will put you over your quota.
I'd suspect that even heavy-duty Web surfers and email addicts would have trouble getting anywhere near the base rate, and I'd offer fixed-rate service (maybe $20 per month) for the Napster users and guys who browse the binaries newsgroups.
In my opinion, the key to customer acceptance of this mechanism is twofold. First, you need to offer a fixed rate for those people who want it. As the article points out, many people will pay substantially higher for a fixed-rate service than a variable-rate. Second, you have to make it easy for people to know what their usage rate is.
One reason why people who have cell phones will pay extra for a large flat-rate plan instead of choosing a metered rate plan which might actually cost them less money is uncertainty in their usage. When starting out, most people don't have any idea how much they're going to use their phone. Once they now, then it isn't worth the bother to make the change. Take away that ignorance any fewer people will make that choice. Make it easier to switch and people will.
I will tell you that although I worked out this scheme in some detail, it's not likely to be put in place. That's because the largest part of the cost of providing the service doesn't have anything to do with the upstream bandwidth, which is all this scheme meters.
Lets discuss free services shal we?
I currently pay a phone bill, an electrical bill, a wireless bill, cable, rent, my car, buy groceries, and put fuel in my car. I choose not to pay for internet access (lunchtime/morning workbreak instead). I also do not pay for water or heating - two common bills which are covered by my landlord.
Personally, it would be ideal if I did not have to pay for any of this, but that is equivalent to wishing money grew on trees.
I classify bills into two types: essential and non-essential. Essential bills cover any survival based service: Water, Electricity, heating, grocery, and housing (rent). Non-essential bills include Phone, Wireless, Cable, a car, gasoline, and ISP access.
The government subsidises most essential costs for families who are low-income. They do not pay it outright, they do however cheapen or give tax credits for these costs.
It *could* be argued that all of these bills are non-essential, as there are people who chop their own wood for heating, do not use electricity and grow and hunt for their food. Quite literally I spent the weekend with friends who do this. They have a phone (for business actually), and gas power. If they need electricity *for his laptop* they use car batteries. Soon they will be adding solar to their cabin and actually charge batteries that way. They have gas lights, gas stove and a gas refridgerator. Their house is amazingly warm from the woodstove (though I hear it gets a little nipply during a cold snowstorm if the fire goes out.) Quite honeslty they are making little impact on the environment (they would be getting Nuclear Power - which they are against, and the addition of the solar/wind powers will increase their self-sufficency). Lastly their water is gravity fed not pumped - what exactly that means I am unsure.
While I grew up in rural Maine, I now live in Boston and I am afforded an amazing amount of conveniences. I however, envy every aspect of that house - it is an engineering dream. They built a nearly autonomous home and are expanding its autonomy from overpriced utilities further.
But I digress....
Internet access is so survivally trivial that to even consider that it, of ALL bills, should be free is ludicrous(spelling?). You have no RIGHT to be online. You have no RIGHT to own a computer. You made the decision to purchase a computer, you made the decision to purchase an online service. There was never a question of your survival if you did not.
I will consider my friend an exception to the system and maintain the "essentiality" of the services I qualified as essential before. Proposal of free online service is silly - as there are many services necessary to survival in modern society which should be free long before ISPs are.
An ISP is a "PROFFIT" based company. They have every right to charge whatever the hell they feel like (within reason).
I work for a research engineering firm and to even consider charging half of what we do (let alone offer it for free) is completely ludicrous.
---
You say you want a revolution?
Actually, metering tech support would make more sense. But 900 numbers have such a bad reputation (and the telco takes such a big cut) that that doesn't work.
Metering connect time has been tried; remember AOL. That's history.
The only way metering is going to happen is if somebody gets a monopoly. Otherwise, unmetered services will wipe out metered ones.
Imagine if residential electrical usage were paid flat rate instead of metering. It seems to be much the same model as Internet access: everyone needs a certain amount of infrastructure to handle their needs, even though they don't often use it fully.
The main objection would be that the cost of producing electricity is not marginal when compared to the cost of building infrastructure, EXCEPT for nuclear and renewables, where the cost of maintaining infrastructure is almost all of the production cost. So flat rate would actually encourage utilities to invest in renewables and nuclear, and discourage use of fossil fuels.
Residential usage can benefit from conservation practices under metering, but only so much. Today, we subsidize electric utilities' conservation and education efforts. If flat-rate were the model, the advantages of such efforts would be evident to the utilities, and the efforts would increase: utilities would likely pay appliance manufacturers and home-builders to build in efficiency, rather than conservation-minded consumers having to pay a premium and hunt for such products.
Electric use wouldn't suffer the same level of "abuse" as bandwidth -- after a certain point, you don't need any more wattage in your light bulbs. If bandwith flat-rates can survive with "campers", electric flat rates could survive with people running businesses on their residential feeds.
Finally, we are facing an electric capacity shortage in the US today, and the article's point that metered service increases peak use is important here.
Has anyone heard proposals along these lines?
What would it do to the home-generation and co-generation efforts that benefit from reducing their metered usage? Could these producers simply not pay the flat rate and provide the power themselves?
"You can't get something for nothing." - my grandfather, on the stock market and Reaganomics.
...for broadband connections.
Why? I currently have @Home service (yeah, I know it sucks, but it is all I can get right now), but in order to stay legit, I am not allowed to run servers. I am also capped on my upload bandwidth (and probably capped on the download, but at several times what the upload cap is).
Before I signed up for the service, I repeatedly tried to get them to offer me more bandwidth and the ability to run a server (hey, I am not wanting to so I can run an MP3 or p0rn server - I just would like to host my site at home, instead of through HE), even offering to pay more for any extra bandwidth I use, etc. They suggested I look into @Work - but since this is a hobbiest site with low hit counts, I can't afford that kind of access.
I was even willing to keep the cap, and just allow me to run a server, but they wouldn't do it (they wouldn't even let me negotiate the contract)...
Bleh...
Anyhow, if we could get metered service for those who want it, and allow us to run servers and pay for what is used, then maybe we can get out of these stuffy contracts that disallow you from reselling the service or using it to run a server or whatnot, and get back to just providing a pipe to use.
I support the EFF - do you?
Reason is the Path to God - Anon
One of the biggest problems with metered billing is what do you do when someone decides to rack up your bill? Let's say I'm some script kiddie whose on an unmetered line (say at college.) Let's say I do a ping with 10K packet size to your home DSL address at the default frequency of once a second for a month. By my math, that adds up to almost 25GB of traffic. One ping a second won't even get noticed by 99% of DSL users, until they get that $200 dollar ISP bill.
That's one of the big problems with metered billing. It's one thing when a script kiddie gets upset at you and floods you with traffic for a few hours. It's a whole different story if you get a huge bill from your ISP because of it.
If everyone goes to metered billing you will see all sorts of abuses as crackers try to set up servers on other peoples machines to avoid paying the bills for their traffic. Add that up to the aforementioned harrasment traffic jacking up peoples bills. Plus the dishonest users who blame their traffic spikes on "hackers".
I just don't see it being worth the headache for an ISP to charge by the byte. You can bet that any user that is hit by the above problems is going to run screaming to the nearest flat rate ISP. Besides, the rates are metered to a certain extent. Dialup access is not the same cost as OC-3 by a long shot. So all the dialup users are in the same cost pool. So what? They are in a different cost pool from the DSL users, who are in a different pool from the T3 users, etc.
What a horrible idea. I don't want my electric bill to go up, just because all my neighbors prefer refrigerated air over evaporative cooling, incandescent over flourescent, etc. Flat rates take away peoples' incentive to be efficient.
The reason you can't compare bandwidth to electric is that when electricity is flowing a resource is really being used up. It's not just infrastructure, it's consumed energy too. With bandwidth, there isn't the consumption aspect of it.
---
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.