My I.S.P. (Frontier) wanted to cap DSL at 5 GB a month!
I'm not against metered billing, in principle, but the rates would have to be reflective of what it costs to provision the marginal bandwidth.
The bandwidth cap issue highlights two crises that the industry faces: (i) the nature of fiber optic networks is such that it's several orders of magnitude cheaper to move data between hubs in major cities than it is to move it over the "last mile" to the consumer and (ii) video streaming from Youtube, Netflix and other providers is starting to provide real competition for cable television.
(i) leads to pricing schemes that don't reflect the cost of provisioning services; installing the "last mile" might cost a few thousand dollars up front, but this gets amortized over bills that a customer pays over a long time. Upgrading a customer to a higher speed tier is the only way that the ISP can offer "better service for more money" to a customer but the increase almost certainly won't be reflective of the difference in costs. As we've seen in the airline industry, crazy pricing leads to pathology in the long time.
As for (ii), ISP's can't be seen as good actors when they are in the competitive cable television business. As customers turn on to streaming video, utilization is outpacing the rate at which ISPs want to invest in infrastructure -- and in the long term, the many ISPs which are cable providers realize that customers who've got access to Netflix and other streaming video services might decide they don't need to blow $80 a month for 500 channels full of crap.
(ii) is a real threat to the cable companies. My apartment building pays for basic cable, but I haven't even hooked up a tuner the entire time I've lived here. I pay for Comcast's 50Mbit/s plan and get my video from Hulu/Netflix/YouTube, and yet YouTube still stutters and buffers frequently.
you bet. one underlying problem is the pricing model. you get "take it or leave it" packages that were negotiated by guys in suits between cable companies and content owners (who are often different units of the same business.)
as a result, you pay for Fox News when you pay for basic cable in many places, but you can't get Al Jazeera English. The consumer's got no way to say "I don't care for Spongebob Squarepants" or "I don't want my kids watching those stupid live action shows about rich kids that are on the Disney Channel" short of withdrawing from the system alltogether.
With no market discipline on the individual channels, they can keep sucking worse and worse until people eventually give up on the whole package.
I'm not against metered billing, in principle, but the rates would have to be reflective of what it costs to provision the marginal bandwidth.
The bandwidth cap issue highlights two crises that the industry faces: (i) the nature of fiber optic networks is such that it's several orders of magnitude cheaper to move data between hubs in major cities than it is to move it over the "last mile" to the consumer and (ii) video streaming from Youtube, Netflix and other providers is starting to provide real competition for cable television.
(i) leads to pricing schemes that don't reflect the cost of provisioning services; installing the "last mile" might cost a few thousand dollars up front, but this gets amortized over bills that a customer pays over a long time. Upgrading a customer to a higher speed tier is the only way that the ISP can offer "better service for more money" to a customer but the increase almost certainly won't be reflective of the difference in costs. As we've seen in the airline industry, crazy pricing leads to pathology in the long time.
As for (ii), ISP's can't be seen as good actors when they are in the competitive cable television business. As customers turn on to streaming video, utilization is outpacing the rate at which ISPs want to invest in infrastructure -- and in the long term, the many ISPs which are cable providers realize that customers who've got access to Netflix and other streaming video services might decide they don't need to blow $80 a month for 500 channels full of crap.