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?"

Comments

Not really the point...

[TripMaster Monkey]

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.

Is this a serious question?

[carnivorouscow]

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.

Re:first post

[Wavebreak]

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.

Re:first post

[XenoPhage]

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. Overusing resources? Wait a minute here.. Last time I checked, Verizon is selling me a DSL connection capable of 3 Mbps down, 1 Mbps up. They advertise it as such, and I am billed for this service. Am I not allowed to use the service I'm paying for? Should I only be using 1 Mbps down and maybe 100 Kbps up? Or, perhaps I should only be using it in bursts, 3-5 seconds per burst with a suitable wait interval in between. Kind of how the typical web browser works.

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.