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What Kind of Alternate Business Models Could ISPs Use?
esocid writes "After reading multiple stories over the past few months about the practices of ISPs within and outside of the US I have started to actually contemplate the benefits of the pay-per-use broadband service. Monopolistic practices have strangled broadband to the throttled money-draining cesspool that it is today. Would a pay-per-use option, or some other strategy, be better than the flat fee offered by companies today? When you think about it you are paying for an XMbps connection, when in actuality you get an 65-85%XMbps connection that you may or may not use all of the time. In addition to that, speaking as a Comcast customer, you get a throttled connection that limits your usage of certain protocols. Essentially you pay about $60-70 for a connection that you only squeeze maybe $35-45 worth of usage out of it. If a pay-per-usage option were implemented, how do you think the best way to charge for it would be? Is there some other scheme that would deliver customers the kind of QOS and value they seek?"
in terms of $ per megabyte broadband is the best deal going. taking into account the throttling and limited upstream pipes...it's still a screaming deal. go price T1's, or try to live with satellite broadband, dialup, or 3G. all these alternatives have profound limitations.
There's your business model.
I'm dead serious. Telecoms is a "natural monopoly". (http://en.wikipedia.org/wiki/Natural_monopoly) A monopoly is not something you build a business around, it's something you regulate. Thus, it is best funded by a regulatory regime AKA, a government.
And, for the practical example. I'm in Taiwan where the telecom is state owned. I am using the state owned telecom DSL service at 8M/640K for about thirty bucks a month although we just got a slight reduction in fees this month. Yeah, imagine that, a reduction. We have no throttling and the service, which I've had for about five years at that level is excellent.
Sure, there's a monthly fee for use, but the service is provided by a government monopoly which is obviously derivative of taxes.
I am myself in favor of a "you only get charged for what you actually get".
High-end commercial bandwidth is sold on a 95th percentile basis. The way it works is this: every 5 minutes they measure how many bits you sent and received in the preceeding 5 minutes. At the end of the month they throw the top 5% of the samples away. The next highest sample is your 95th percentile usage.
Are you still in favor of that payment model if I tell you that commercial bandwidth today costs between $20/megabit and $300/megabit with the average price around $100/megabit? In other words, you can have your 15-meg FiOS line, but if you nail it at 15 megs for more than 36 hours in a month, you'd pay $1500.
Still sound like such a good deal?
Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
Sorry, but people cost money. Lots of money. That's why tech support sucks. Think about it, a good tech support person who knows his/her stuff will run you $80k+ per year including overhead if you live outside of a major metro area. So for 80k you're going to be in for about $20 for each 1/2 hour help desk call. If you price your service competitively, the low end will be $20/month baseline charge and 80% of your customers will never use more (my unlimited 768k at home is $17.99, fwiw). Since your help desk probably shouldn't be more than 5% of your operating costs due to the cost of plant, bandwidth, capital, etc., you've got one help desk call per user every 20 months at break even. That's mighty low usage.
Don't even get me started on custom programming. Eveything seems easy until you have to amortize a team of $100k-200k/yr developers over a bunch of $20-$40/mo service contracts.
Is it just my observation, or are there way too many stupid people in the world?
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No, you broke it again- my parents are on Comcast and it suits them fine. They don't bittorrent, they don't download much of anything- they send email and read some websites and very rarely watch something on youtube. They're use very little bandwidth and Comcast does not interfere with anything they do.
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