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An emailer pointed out that my comment that content owners would be better off with a system that "billed senders for the bandwidth they used" was imprecise. "Bandwidth" is a measure of capacity, whereas I meant to say they should be billed for "bandwidth use."
He also noted that ISPs had tried this strategy of billing for use early on, but moved to flat rates. To which I responded:
And you are also right that the ISPs started this way, then shifted. But at the time, use was not a scarce resource. Now, they, and last-mile purveyors such as universities, think it is getting there, so they are looking for ways to profit from the scarcity. Plus, the ISPs are under a lot of pressure from the content people and from their own desire to get a cut from the value of the content flowing over their fiber to move against unauthorized P2P. Charging heavy users more might be one way to get a cut without sharing it with the content owners. It is also amusing to note that there is a family resemblance between this issue and the airline seat pricing developments discussed yesterday. In both instances, a premium is attached to a particular good -- aisle seats with legroom for airlines; Quality of Service and/or total usage for bandwidth -- and the purveyors are trying the figure out how to extract more revenue from those who value these amenities the most.
It should also be noted that the inevitable consequence of the suppiers' collecting more revenue from some users is that the prices to other users will drop. A win-win, for all -- until Congress decides to compel net neutrality, or perhaps neutrality in airline seat pricing.
posted by James DeLong @ 9:29 AM | Big Tent
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