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What’s the point of rationing something that costs a hundredth of a cent per GB?

You get 10TB of bandwidth for a dollar. Once average usage per subscriber goes over that, then we can talk.






I think the real problem is that the supply is too inelastic. The marginal cost of delivering more data is trivial, until part of your network gets congested, and then your short-term options are limited. This is the same problem that water utilities often face: it's cheap, until you run out.

Assigning a single rate ($/TB) requires you to make some assumptions that are at risk of being violated in exceptional circumstances. Using variable pricing to charge more during peak hours is too complicated for consumers to keep track of and their options for changing behavior are limited, so this earns the ISP more money but doesn't eliminate congestion during peak hours.


> Using variable pricing to charge more during peak hours is too complicated for consumers to keep track of

Why? It works for electricity.


Peak vs off-peak prices for electricity aren't that far apart—up to a factor of 3 in my area for residential service. And that's for a fixed schedule of peak/shoulder/off-peak hours. More dynamic demand-based pricing of electricity doesn't work all that well for residential service; it basically requires automated load-shifting that's far more practical for industrial customers than residential.

The cost curve for internet service during peak hours is a lot steeper. I think it would take much more than a 3x price multiplier during peak hours to get any noticeable demand reduction beyond what streaming applications already do by dropping down to lower resolutions automatically. (Assuming that the base cost for off-peak usage is remotely realistic, ie. orders of magnitude lower than the metered prices we pay for cellular data in the US.)




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