Binge On! - get your umbrellas out, stuff's hitting the fan.

Sat Jan 9 16:01:47 UTC 2016

On Sat, Jan 9, 2016 at 5:06 AM, Mike Hammett <nanog at ics-il.net> wrote:

>
> The best solution for everybody is the solution most consumers are adverse
> to, which is usage based billing. Granted, many times the providers have
> shot themselves in the foot by making the charges punitive instead of based
> on cost plus margin. Reasonable $/gig for everybody! :-)

I'm tempted to make an analogy to health care, insurance, and universal
coverage, but I'll abstain.

Usage based billing alters the typical hockey stick graph: the 10% of users
using 80% of the bandwidth are otherwise subsidized by the long tail.

As an ISP, usage-based billing is more sensible, because I would no longer
have to stress about oversubscription ratios and keeping the long tail
happy. But usage-based models are more stressful for the consumer; I think
I disagree that it's the best model for everybody.

Let me be a consumer advocate for a moment. One of the reasons consumers
are averse to usage-based billing is that the tech industry has not put
good tools into their hands. While it is possible to disable automatic
updates, set Windows 10's network settings to "metered", and micromanage
your bandwidth, in general:

The Internet (from the non-eyeball side) is designed around a free-feeding
usage model. Can you imagine if the App store of your choice showed two
prices, one for the app and one for the download? The permission-based
model on Android would have requests like, "This app is likely to cost you
$4/week. Is this OK?"

I don't know all the reasons that satellite provider Starband shut down,
but that was a usage-based billing market; and it would never have been a
'reasonable' $/gig.  I'm working to step into the hole they left, and
you're right that customers don't want a usage-based model to replace it.

In addition, let's say I know of an ISP that makes 10% of its revenue from
overage charges. Moving to a purely usage-based model would lower ACR, as
it would have to charge a more reasonable price/gig; that top 10% of users
won't replace the lost revenue. So even providers may have little incentive
to change models, particularly if they have a vested interest in inhibiting
the growth of video or usage in general.

-- 
Jeremy Austin