How Network Non-Neutrality Affects Real Businesses
Posted by Adam McNamara | Filed under Business, Law & Politics, Tech
Take a moment to read this fantastic article by Rich Baker, founder and CEO of Glance Networks. In one of the most articulate and easy to read articles on the subject, Rich talks about the real impact traffic shaping by ISPs has had on his business. He goes on to say that instead of a flat rate pricing scheme currently employed by ISPs, billing should be based on bandwidth usage only. I agree with his assessment. It seems logical that people should only pay for what they use, correct?
So what’s the problem? There are two problems with applying a consumption based billing model to consumer internet usage.
First, ISPs are typically cable and/or phone companies. Their existing business models are based on flat rate billing. Everyone knows that by making a fixed amount recurring bill, customers tend to worry less about cost. If customers are billed by usage, they begin to micromanage the time spent on whatever the activity is in an effort to minimize the bill.
The second, and most important problem, is that there is no nice linear model pricing structure. What would happen if ISPs began charging $10/GB of traffic? The average household internet bill would remain around $40/month. However, those of us who use the internet to for high bandwidth activities like downloading television shows, stream videos, and share files suddenly see our internet bills go up to $600/month. In order to make the same amount of money from most of its customer base, it has to charge a fraction of the customer base a mint. The problem is that the second group is getting larger by the day.
Tags
bandwidth | file sharing | isp | Net Neutrality | traffic shapingRelated posts
Tags: bandwidth, file sharing, isp, Net Neutrality, traffic shaping