Web Usage-Based Billing On Its Way 397
tripleevenfall writes with this excerpt from SFGate:
"The days of watching movies on the cheap via the Web may soon be over. Time Warner Cable and U.S. pay-TV companies are on the verge of instituting new fees on Web-access customers who use the most data. ... U.S. providers have weighed usage-based plans for years as a way to squeeze more profit from Web access, and to counter slowing growth and rising program costs in the TV business. While customer complaints hampered earlier attempts, pay-TV companies are testing usage caps and price structures that point to the advent of permanent fees. ... Cable's best option is to find ways to profit from the online shift, said [analyst Craig Moffett]. If the companies were to lose all of their video customers, the revenue decline would be more than offset by lower programming fees and set-top box spending. 'In the end, it will be the best thing that ever happened to the cable industry,' Moffett said."
Re:Municipal broadband is on its way, then (Score:5, Informative)
I can attest to this. Google recently offered the small town I work in a deal that would have paid for the construction of an entire wireless infrastructure, and 3 years of support to get the whole town Wi-Fi coverage. They only had to take up support costs after 3 years.
The town declined because Google refused to filter the connection. They were so afraid of somebody might see a tit that they turned down FREE town-wide wifi coverage.
I hate living in the Bible-belt . . . .
Re:Maybe... (Score:4, Informative)
Are you really sure about that? I got the impression that with the cable TV companies, their network's physical last mile is something like a shared ethernet (think back when you use ethernet hubs instead of switches, or even further back when you had 10base2 if you're old enough to have gone through that), in that when you're talking/listening, someone else has to wait their turn.
Of course, it sounds like your argument is to try to make them either change that, or at least upgrade its capacity. By charging per capita instead of in proportion to use, the light users who subsidize the heavy users will demand the sum of everyone's bills go down (so that their own bill goes down), thus being the incentive to upgrade the network.
I wonder if we could use this same strategy to advance Everything. Imagine if gasoline/petrol companies were to charge car drivers a fixed monthly fee for fuel, instead of per gallon. That would give us incentive to use our cars more, and give them incentive to obtain more fuel more cheaply. And since oil prospecting and drilling is much like residential cable/fiber laying in that it's nearly free and the only barrier to doing it is having the desire to do so, the strategy should work equally well.
Re:Municipal broadband is on its way, then (Score:4, Informative)
It's not just you. [dailymail.co.uk]
Look at your $60-120 cable bill and tell me there isn't something else that would make you happy with that money. At the high end, that's a family mobile plan with data for a family of four. [t-mobile.com]
Re:Asking people to pay for what they use?!? OMG! (Score:5, Informative)
I was around in the eighties when having a link from one computer to another meant that you had to pay usage fees. By the minute actually. Making large transfers of data were simply cost prohibitive, your average youtube video would have cost you hundreds if not thousands of dollars at those old rates.
When people began to talk about having a world wide internet connection they got absolutely no response from the telcoms on the issue simply because, the idea of changing their service fees from a "by the minute" to a flat rate was unreasonable. They simply refused. Then after it had been shown that data could be sent in different (beyond hearing) frequencies, without affecting their normal voice business, they still balked. Opting instead to offer their lines at the same rate for whatever usage.
In the end it literally took an act of congress to force the telcoms to lease their lines out for internet use. Not by the megabyte or by the minute.. but the whole lines. Believe me there was more than just a little resistance. Since then the telcoms have been fighting to regain the ground they lost when the internet was created, and to be able to charge you ten or a hundred times more for the same service they provide now.
In fact you are right.. there are no established laws on the books that protect the "internet" as we know it.. from being chopped up and charged for by the website. But the it wouldn't be the "internet" , and the telcoms would have no incentive at all to upgrade the available infrastructure when they could simply charge you more and more for the ever expanding pieces that they can chop off.
Re:K is across; P is down (Score:4, Informative)
Hum, I think people are confusing letters here. The K in 4K refers to the Kilo prefix, as in 4 thousands. The P in 1080p refers to "Progressive" (full scan) compare to say, 1080i "Interleaved", which is really just 540 pixels resolution.
Like a previous poster said, they used the horizontal number because it's higher, but please don't start bringing in P or other things to muddle up the issue even more.
Re:Municipal broadband is on its way, then (Score:5, Informative)
...I also no longer buy it either on CD or as downloads, because I object to the removal of my fair-use rights, and the unnecessary DRM schemes on both CDs and downloadable music that put artificial limitations on what devices I can use them with. It's been a decade or more since I last paid a cent to anybody other than private artists selling their own music.
Other than the Sony BMG's rootkit [wikipedia.org], there hasn't been widespread DRM employed on CDs. LIkewise, Amazon and other on-line e-tailers have been vending DRM-less MP3s for years now.
Re:Maybe... (Score:4, Informative)
The problem is it creates the wrong incentives. Data is not like water or gas where you can save it by not using it. The fixed costs are the same no matter how much bandwith we use, and any bandwidth we don't use is lost forever.
That's superficially true, but it fails when you look at the whole system. For one thing, supplying water or gas is not that dissimilar to supplying data. In either case, you have both a peak delivery rate determined by your distribution infrastructure, and an actual amount used. Parts of either kind of infrastructure may be shared between multiple users. A higher peak delivery rate costs more not only for the increased amount used but also for the more expensive infrastructure necessary to deliver it.
In the ISP's case they're paying for both the infrastructure ("last mile") and the upstream connection to their Internet provider(s). The latter part is the "actual amount used". These sorts of connections are generally one-way (mostly downloads), so the ISP is paying for transit based on the amount used / peak capacity required, rather than peering. If the ISP's overall bandwidth requirements drop, they can shut down some extra outside connections or renegotiate their peak transit requirements. They can't "conserve" bandwidth, saving it for later use, but they can avoid purchasing more transit than they actually need, and save the money instead. It works out the same in the end.
The actual "last mile" aspect of the infrastructure is, of course, a fixed cost, and might as well be utilized to its full capacity. However, large parts of the ISP's local infrastructure are still shared resources (upstream of the DSLAM or its cable equivalent), and the same arguments apply for this shared portion as for the ISP's upstream connections.
To summarize, there are basically three different kinds of costs associated with an Internet connection from an ISP. First, you have the ISP's transit costs, which scale roughly linearly with actual use. This is the part most compatible with usage-based billing. Second, you have the ISP's shared infrastructure, which scales with the peak bandwidth requirements for your neighborhood, plus a certain amount of fixed cost. Since the ISP probably doesn't want to vary their prices based on your location, they'll most likely be forced to rely on prioritization. The shared infrastructure should be sufficient to cover the median use for each end-user connection speed during peak hours, but above-average users may find themselves throttled in proportion to their rated speed to ensure the available bandwidth is allocated fairly.
Finally, you have the unshared connection to each end user, which is a combination of fixed costs and an additional amount depending on required peak connection speed. The final price should thus include a fixed component, a component proportional to the peak bandwidth for the local infrastructure, and a component proportional to the actual amount of data transferred. The last component may vary based on peak/off-peak hours to ensure that the fixed costs (infrastructure) are utilized efficiently.