Time Warner Pulls Plug On Metered Billing Tests

fudreporter is one of many who writes to tell us that Time Warner is not planning to continue their tiered consumption tests at this time. The company is not completely admitting defeat, stating that they "may return to the idea in the future," but for now the test has been shut down. "The plan would have established several tiers based on how much consumers use the Internet. Time Warner Cable had said at the time that it believed that consumers who download the most content need to pay more to cover infrastructure upgrades. The plan was first announced two weeks ago, then modified with higher download caps last week. In a news release yesterday, Glenn Britt, the chief executive of Time Warner Cable, said, 'We will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met.'"

Comments

Um...

[Anonymous Coward]

http://tech.slashdot.org/article.pl?sid=09/04/16/2047220&art_pos=27

Re:The problem is, Time Warner is right

[langelgjm]

Heh, your nick is funny given the content of your post.

The problem, though, is that this isn't just a typical shared resource. If we were talking about food, or oil, or water, of course a flat-rate, all-you-can-eat model wouldn't work. All of those are commodities that can be used up.

Internet access is different. You can't "use up" your connection, in the sense of permanently depleting it, requiring that more be made or acquired. All you can do is saturate it. Obviously if too many people seek to saturate a finite connection at one time, there won't be enough to go around, but there's no permanent depletion. That's not exactly the same as the traditional tragedy of the commons.

To make an analogy, think of a buffet that serves chicken wings. Let's assume they can serve 1000 wings per hour, and that the wings have a marginal cost of $0.

So, if we only serve 100 customers at a time and assume that they will eat 10 wings / hr., we should be alright. Now, maybe we decide to oversell our capacity, and serve 200 people at a time, banking that the average customer only eats 5 wings / hr. Sure, they may be a few who gorge themselves and eat 25 wings an hour, but they'll be balanced out.

Now, we notice that the average person is eating 20 wings an hour. So, we have several options. We could only admit 50 people at a given time. We could serve 2000 wings an hour, and still take 100 people. We could limit everyone to 10 wings an hour. Or, we could ditch the buffet idea, and start changing everyone $1 / wing.

Notice which one of those doesn't actually solve the capacity problem: charging per wing. Sure, maybe it discourages people from gorging themselves on 100 wings, but if the average consumption is rising, charging by wing doesn't fix the capacity problem.