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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."
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.
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.
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. :)
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.
Um, where exactly did the word 'free' come into play here? He never mentions how much the flat rate should be. Pricing specifics don't enter into the picture here. You're using the exact same tactics you accuse him of using (see below).
Thank you for having missed the boat completely. The point here is to let the _technology_ determine you bandwidth technology, and to charge equally across the board for it. Thus, for (pulling a number out of a hat) 29.95 a month, you get all the bandwidth your DSL line can handle. Just like a phone line and local calls. The whole point is to argue for the removal of arbitrarily-induced bandwidth limits.
No. You've again demonstrated that you've missed the point. There are things that *have* to be metered. Electricity and gas are one of them, because the costs associated with allowing a flat-rate fee for these services is astronomical. This is not true with bandwidth.
You've just used the same tactics by pointing out the "Nazi Price Fixing" comment. Also see above, where you begin dragging the concept of "free" bandwidth into a discussion that had nothing to do with things being "free".
And how exactly were you expecting "flat rates" to be determined? This is how "flat rates" are currently determined in the world at large, and it's the same "flat rate" that is being discussed in the article. Were you under some mistaken assumption that a "flat rate" is a price that never changes, even if associated costs rise?
Um, yes, have you been paying attention? The money comes from the flat rate fees that this paper is all about. If you set your fees properly, the number of users it takes to saturate a unit of bandwidth (like a T-3 for example) should pay for the bandwidth itself. If you have priced your flat-rate fees so that they do not pay for the resources they consume, you have priced yourself at a loss, and it's your own fault when your network can't survive an increase in load.
No, it's nothing like metering. There is no distinction between service levels. All users are affected by these caps. They don't pay a different price to be able to ignore them, or to be less affected by them. It's a hard limit, whereas metering represents a "soft" limit.
And who the heck said anything about giving people OC48s?? The point is to charge people a flat rate fee. Nowhere either the article by John Levine or the associated research papers by Andrew Odlyzko. If we charge a flat-rate fee for those OC48s that covers their costs to produce, there's no reason at all we can't give everyone one of them. As long as they pay for themselves, there's not an issue. The backbone is perfectly capable of growing as demand requires it, as it continues to do on a practically daily basis.
Perhaps you should start the "free bandwidth fund". Nobody's mentioned free meals here but you.
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.
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.
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