We have been operating with the illusion for a long time now that bandwidth is an infinite resource. We could get away with this because most people didn't have computers that could handle large amounts of data, and they didn't have a reason to handle large amounts of data. That's changed. Computers are faster, hard drives are bigger, and people want to stream movies. Most people didn't want to use all of the bandwidth available to them, so we could pretend it was infinite.
But it's not. It's finite. It seems obvious to me we need to move to the same model we use for electricity and water: pay for what you use.
What's strange to me is many of the people who I know are technically knowledgeable decry bandwidth capping, but don't propose a simple pay-for-what-you-use model. I agree that advertising infinite bandwidth and then charging for "overusage" is wrong. But I also recognize that a flat-fee for widely variable usage isn't sustainable for ISPs.
I hate the idea of caps on my data transfers. I don't want to have to pay per-GB fees.
I also hate the idea of having to pay-as-I-go for LD telephone, for minutes on my cellphone, for gas to power my car. I mean, I paid almost $30K for my car; why should I have to fork out more money just to use what I've already bought?
</sarcasm>
Really, I do hate it. But if we don't allow companies to make money by providing bandwidth, then no one will want to enter the market, and without competition we'll never get better or cheaper services.
Maybe you're right. Although they're rare, there is certainly precedent for private roads, and many of these are successful. For example:
"The Dulles Greenway is a private road built in the western suburbs of Washington, D.C., in 1995. Though constructed with some restrictions set by the state, it was built with private money and is run as a for-profit business. The first year it opened, 6.1 million trips were made on the road. In 2006, 21 million trips were made. This type of private toll road has the ability to move large numbers of people without the aforementioned problems associated with the federal interstates that we are told are indispensable. It has shown its viability, and we might well be seeing many more of these private toll roads in the future."
See http://www.fff.org/freedom/fd0809d.asp
The problem is that the ISPs' approach has little to do with passing their costs on, and more to do with holding back new forms of media distribution. Price/GB should be nonincreasing, with a nonnegative connection cost. I've seen pricing plans with $50 for 250GB, but $1.50/GB overage. Clearly, the fixed cost is not -$100, but is intended to punish heavy users rather than selling them what they want.
That it takes more expense to handle customers with higher bandwidth usage.
Which doesn't address why you think it's unsustainable. The business model for ISPs has always been been that the lower end user subsidizes the use of bigger consumers. I interpreted that you believe this model is losing it's viability and I am wondering what information you have that shows this. Or did I misinterpret your original post?
Edit: Not to mention that I've never understood how bandwidth caps actually address any problem that an ISP faces.
The idea is to prevent people from canceling cable and using the internet to watch TV not to cover costs.
The cable company costs are well below than 10c per GByte used, but that's not going to prevent users from watching video online so they bump things well over 10 times their true cost. In the end it's a win / win either people keep cable or they milk those who switch.
So? Why does that mean their business model is unsustainable? Do you have a reason to expect that bandwidth consumption will grow faster than the ISPs can keep up or are you just guessing?
Of course I'm guessing. It just seems like an obvious guess to me - specifically, that people's bandwidth usage will start to resemble other utilities. I'm surprised you find it a controversial guess.
I don't necessarily find it controversial, just that I haven't seen enough evidence to suggest that's it is correct. So when people make the statement, I like to find out if they are guessing or if they have more information than I do on the subject. Perhaps that wasn't clear from my initial response.
> That it takes more expense to handle customers with higher bandwidth usage.
It doesn't cost any more to set up their accounts and bill them. It doesn't cost any more to run the wires.
There is some marginal cost for bandwidth. There are some third order router-cost effects. There are some fourth-order power effects.
Note that time of usage has a huge impact on costs. Someone who downloads 1GB/month at peak periods is more expensive than someone who downloads 250GB/month at off-peak.
But it's not. It's finite. It seems obvious to me we need to move to the same model we use for electricity and water: pay for what you use.
What's strange to me is many of the people who I know are technically knowledgeable decry bandwidth capping, but don't propose a simple pay-for-what-you-use model. I agree that advertising infinite bandwidth and then charging for "overusage" is wrong. But I also recognize that a flat-fee for widely variable usage isn't sustainable for ISPs.