Level 3 Communications Issues Statement ConcerningComcast'sActions

George Bonser gbonser at seven.com
Mon Nov 29 23:59:27 CST 2010


> 
> On Mon, Nov 29, 2010 at 22:17, William Herrin <bill at herrin.us> wrote:
> 
> > So you're saying: treat it like electrical service. I have a 200 amp
> > electrical service at my house. But I don't pay for a 200 amp
> service,
> > I pay for kilowatt-hours of usage.
> >
> > There are several problems transplanting that billing model to
> > Internet service. The first you've already noticed - marketing
> > activity has rendered it unsalable. But that's not the only problem.
> 
> Not quite.  Look at mobile data plans.  A very few are unlimited, most
> are per byte.

If the end user had to foot the real bill, providers would have
incentive to innovate.  We might have higher quality video that uses
less bandwidth because consumers would demand it.  If the user doesn't
foot the bill, if the cost is some artificial flat rate and if the
network attempts to tax the provider for it, it just doesn't work.  It
is subsidizing the end user by taxing the provider.  It is sort of like
having no personal income tax and trying to make the government
supported only by business taxes.  In that way, the end user has no real
understanding of the real cost of it and it places a huge barrier of
entry to production.  If you so it the other way where the buyer
actually pays for what they are using, market forces will produce
efficiency.  

Also, increasing subscription for internet by $1 wouldn't be enough to
make users switch but would (according to Wikipedia) generate an
additional $15.930 million per month of revenue. Nearly $200 million per
year will buy a fair amount of network upgrades.

I am a believer in metered service, though. You pay for what you use.

 




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