Slashdot Mirror
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?"
I'm sure there are several alternate business models that ISps could employ that would result in fairer, more even-handed access and pricing.
However, this is not in the ISPs best interests. The ISPs interests are best served by the current business model...the promise-you-x-amount-of-bandwidth-but-give-you-only-0.4x business model.
Don't expect change anytime soon.
____
~ |rip/\/\aster /\/\onkey
honestly, internet access is very nearly a commodity, why not bill it as such?
Assuming all my ports are equal, and I can xfer upstream and down at whatever the physical rate of the device is:
bill me by the megabit-hour. Just like txu bills me by the kWatt-hour. I can use whatever I want, but pay accordingly.
Alternately, bill me at the end of the month for gigs xferred, which is already done for hosting in some cases.
In Soviet Russia jokes are formulaic and decidedly non-humorous.
Compared to the insanity of last year, having an all-normal day would be one hell of an April Fool's.
Want to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
If you're getting charged because you're using more, you're exactly the kind of person that is overusing current resources. Switch ISPs, go to a hosting company, or find another way. You're making the experience less for the rest of us that only moderately use our connection and raising our rates. The low-use users are subsidizing you.
I know I'm risking what little karma I have as a new poster but this question seems bizarre. Throttled connection speed is primarily a US problem and has a lot to do with the telecoms not keeping their promise to Congress to create a fiber optic network across the nation. Now they're reaping what they've sown and are trying to create an excuse to pass the buck to their customers rather than fulfilling their obligations.
I could see a tiered system for connection speed that billed based on KB transfered being reasonable if the telecoms were doing everything in their power to meet increasing capacity demands but they're not.
How about they give you what they promise, set their price against what they actually think it costs and let competition work its magic. Promising what they don't deliver fscks up Adam Smith's invisible hand.
Shh.
No, the low-use users are simply not using all that they paid for, and Comcast takes advantage of that fact.
But I'm ready for it now! This is like watching what's supposed to be a horror movie, you're all ready for the jump-scare, the woman is walking around in a dark house in her panties looking in all the creepiest rooms, opening cabinets, peeking behind shower curtains, and nothing! Not even a cat jumping and screeching from some impossible location no cat should be in.
Finally I'm ready to not get suckered on April Fools and they sucker me by canceling it. Bastards.
Kwisatz Haderach
Sell the spice to CHOAM
This Mahdi took Shaddam's Throne
'And that, of course, is why most Slashdotters don't want pay-as-you go pricing: They'd be at the top of the usage list and so would pay accordingly.'
You make it sound as if it is some sort of crime to actually use the connection we pay for. We already pay a fair rate for the bandwidth we use. If you don't want to pay the price of your connection because you fail to fully utilize it you should downgrade.
"No, the low-use users are simply not permitted to use all that they paid for, and Comcast takes advantage of that fact."
Fixed that for you.
It's exactly this kind of thinking that the ISPs use to justify filtering p2p and whatnot, and it's completely wrong. You pay for a speed of X, then X is the amount of bandwidth you should be allowed to use. If you're not, that's fine, but doesn't change the fact that those that do are perfectly within their rights to do so. If your ISP doesn't want you to use the bandwidth, they shouldn't be selling it to you. What you use it *for* is irrelevant, they shouldn't even *know* what you do on the interwebs, that's your problem, the RI/MPAA's, and the law enforcement's if it comes to that. Not theirs.
Nobody expects the British Columbia Human Rights Tribunal.
Unfortunately, I can't seem to come up with a good car analogy for this.. Hrm..
At any rate, my point is this. If you're going to advertise the connection as 3 Mbps, or 10 Mbps, or even "Up to" XX Mbps, then I should be allowed to use it. I am, after all, paying for it.
That said, let's look at the pay for play model. Once upon a time, the industry decides to move to a pay for play model. So, the masses move to this new model and continue using the Internet as they always have. The "normal" users are happy to see their $60-70 per month bill drop to $45-50. The "barely use it" crew drops down to $20 per month, the base fee that covers the first few gigs of transfer per month. And then there's the hard-core crowd. The jump from $60-70 per month to well over $100 a month. And, after realizing it's costing them an arm and a leg, they either find a new provider, or curb their habits.
The problem is, the ISP suddenly realizes, to their horror, that profits have gone down! Well then, time to increase the rates we charge customers. And over the course of the next few months, or even the next year or two, the normal crowd returns to $60-70 per month and the hardcore crowd gets totally screwed and starts to diminish. The only ones really saving here are the "barely use it" crowd that really doesn't need the connection in the first place. And, the normal users end up getting royally shafted when they suddenly get infected, or have to download SP12 for Vista..
So be careful what you ask for. Per-bps payments are great... For the ISP.
XenoPhage
Technological Musings
At the risk of getting into the same tired argument with the same slashdotters I argued with yesterday about health care*, I have to agree with you. I don't believe natural monopolies like roads and electricity should be left to the private sector. Here in Springfield our power company is owned and run by the city government. Our rates are the lowest in the state, and our electricity is the most dependable.
-mcgrew
* there are some here who believe that the huge problems we have financing our health care are, believe it or not, caused by overregulation rather than the fact that the customer has no choice, nor can have any choice. I have to agree to disagre with these folks.
mcgrew's razor: Never attribute to stupidity that which can be explained by greedy self-interest
If they throttle you, and CLEARLY tell you so before you buy, then that's fine. I wouldn't buy a service from them if I had a choice, but it's fine. What I have a problem with is selling you bandwidth and not delivering. And resorting to the "you're degrading other people's service" bullshit. You use what you pay for, it's that simple, and if it hurts others then it's the bloody ISP's fault for making promises they can't keep. Not yours.
Nobody expects the British Columbia Human Rights Tribunal.
Bandwidth seems to be _far_ more expensive in the US, both for residential lines, and for servers. (I could be wrong on this, as I haven't bought bandwidth in a US datacenter in a couple years.)
As for what business model should the ISPs use... well... for starters, adopt the business model of clearly stating exactly what your accounts do and do not provide. If you say "unlimited", make sure you really are selling unmetered connections. Don't say "fair use policy applies" -- say "customers on this plan may transfer up to ___ GB per month." Don't manipulate people's traffic -- that includes faking RST packets to hurt BitTorrent, but it also includes manipulating DNS queries to point unused domains to your "parking" (read: spam) pages. Don't prevent outbound access on any port -- in the US I was shocked to find that the ISP that serviced the building I was staying in blocked all outbound connections on ports 25, 587, and 2500. If you start blocking ports, you're not providing an Internet connection -- you're providing a limited form of Internet access. Basically, the ISPs should adopt the model of actually providing what they claim, and not treating their customers like children.
Come on, what is wrong with a lot of you?!? Sure, at this point in time a minority of users might be using the majority of the pipes. "Tax the heavy downloaders!" you say. Have you forgotten that Microsoft (X-BOX Live and Marketplace), Sony, Apple (HD movies), Joost, Tivo, Netflix, Amazon, etc. etc., all want to push more and more bandwidth intensive apps and uses?? Sure, Joe average may only use 5GB now with occasional YouTube videos. Maybe $15/mo would be good for him. But if the big players have their way, and they will, Joe will be watching, buying, and streaming HD video and games in the near future. 5GB ain't gonna cut it. The ISP's would love to knock everyone up to a "high tier" service that's $100/mo, but that sucks if that's the entry point just because the ISPs have milked this cash cow as long as they could.
ISPs creating tiered service levels is only them trying to prevent the inevitable - that they are being pushed into only providing an on-ramp to the Internet, and that's all. We're in the middle of a revolution in how content will be delivered, this crazy notion of tiered service levels is only going to mess that up. Of course, it will be steamrolled by innovation in the field.
It's like a small town experiencing a population growth, and wanting to turn Main St. into a toll road to discourage new citizens. Tiered pricing isn't designed to make things more fair; it's designed to discourage those at the top end and make those at the bottom end feel like they're getting a good deal.
We're already seeing mobile phone service becoming a commodity, with carriers offering true unlimited service after years of nickel and diming you for each partial minute you use. Are the cell carriers going to start complaining that everyone is actually talking constantly 24/7 and using up their lines? No, they'll build out more infrastructure to meet the demand. Why would the ISPs go the opposite route??
It's not a problem of cables, it's all about pricing.
Go out and find out how much it costs to buy, say, 100 megabits of real, honest, unlimitted, *guaranteed* bandwidth. Divide that by 17, and look at just how much you would have to charge users taking up a full 6 megabits just to break even. Then factor in the cost of your network and maintaining it.
Whether their business practices are honest or not (often, they're not, as they don't tell you what they're going to do) is irrelevant. People who think that it's their right to max out a multi-megabit connection for the cost of a couple of lunches need to wake up and join reality.
If broadband companies don't limit user's use, then there are only three eventualities: Either service will suck for everyone, everyone's prices will rise greatly, or prices will rise for those who use the most. There's no other way for the company to stay in business without something subsidizing them. When you look at countries with ultra-cheap broadband prices, they're subsidized.
Oh, you're not stuck, you're just unable to let go of the onion rings.