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Seems like it would be much more expensive than the elastic demand model used now unless you used the guarantee.



The problem with the "elastic demand model" (or the "sell, don't deliver" model) is that it's not working out in the marketplace.

ISPs, instead of expanding network capacity when they lose their side of the "elastic demand" bet, throttle companies like Netflix or extort them into financing their lacking capacity.


That's not really true. Wireless carriers are expanding as quickly as they can. The problem is they're out of bandwidth, so the only way to expand capacity is to shrink the cell size.

And you can't just throw up hardware wherever you want. The bureaucracy involved (from the FAA to the FCC to local planning boards to code inspections to historical societies to nimby obstruction) in getting a single site up is staggering. Those sites are going up, but it takes time.


I wouldn't really consider selling a service to be extortion.




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