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 espaethDigital PlumberPremium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2
 ·Clear Wireless
| reply to r81984
Re: Flate rate is also easier to forcast said by r81984:With a flat rate when they get an influx of new customers and they will make more money right away from the flat rate fees. That only works until you saturate a market to the point that new subscriber sign-up rates drop off. Of course, the barrier for entry is huge for new providers; the cost of broadband is artificially low because existing cable plant is being leveraged in the majority of installations. Telcos and MSOs were able to leverage a vast copper cable plant already in the ground paid for by the high profit margins of other services deployed on those lines for decades. Nobody can complete to just come in and offer a data-only service offering, which is why you are seeing even in the case of muni deployments that they need to supply the triple play of phone, TV, and Internet to make the cost structure work.
said by r81984:Also, electricity rates are regulated, the cost of a byte is not. Consumable electricity generation cost is also variable based on how much electricity is generated. Electric utility rates are not regulated in every state, and the cost is not per byte -- it's in the percentage of infrastructure consumed by utilization. That's why it's a sliding scale at various points along the network and there isn't a fixed "per byte" cost universally.
said by r81984:The cost of building a network is fixed and electricity usage is basically fixed (since its price is regulated). Regardless if you are only using half the bandwidth of a strand of fiber or all of it, the cost does not change. Once you reach the capacity of your infrastructure it's forklift upgrades to provide expansion. Capacity upgrades are not linear, it's a step function. You want to improve DOCSIS cable rates, you have to replace your CMTS with one that supports DOCSIS 3.0. You want to upgrade to ADSL2+, you need to replace all of your field DSLAMs to units that support the new protocol.
said by r81984:Everything with an ISP is a fixed cost. They pay for the internet connection, they pay for equipment, they pay for tech support, etc. It makes no sense to have a variable pricing when all the costs you have is fixed based on the number of customers you have. They have to pay the full network costs regardless if customers use their full connections or not. You're leaving out one massive variable: oversubscription. The sum total of all of the subscriber access connections is greater than the capacity of the ISP's network. As usage at the edge increases, elements of the network must be upgraded to support the greater capacity demand. If the network were provisioned at 1:1 even throughput you would never be able to afford your broadband connection. (look at the pricing for T1, DS3 services as a start to index on pricing)
said by r81984:Why would you want customers to pay higher fees? I want a model that supports growth. If I want to consume 1500GB/mo at home, I want a system in place that would both allow me to do that and provide a financial incentive for companies to grow their network to be able to sell me more bandwidth. That model has delivered massive gains to the web hosting market space over the last few years, there is no reason that it couldn't deliver the same possibilities for end-user access. | | |
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 r81984Fair and BalancedPremium
join:2001-11-14
Katy, TX
 ·AT&T U-Verse
 ·AT&T DSL Service
·row44
| Flat rate supports growth. They just have to set a price that is profitable for them and can fund their upgrades.
If you saturate the market and your price is set correctly then you are making so much money you don't have to worry about ripping your customers off with per byte billing.
If they oversubscribe they get more money from the extra customers to pay for upgrades.
Problem solved.
If you actually do a fair implementation of per byte billing (all the fixed costs divided by the available bandwidth) then they will not be charging enough to afford to upgrade anything unless their available bandwidth is always maxed out.
Flat rate is fair and gives them the money to hire employees, upgrade equipment, and to provide bandwidth. Fair per byte billing will put them out of business.
If there are people that do not want to use all of their bandwidth then, oh well. The fee is for a 24/7 connection, just because you do not use it 24/7 does not mean all the fixed costs to provide that connection just disappear.
A flat rate is the fairest way to pay for the network and to keep it funded for upgrades.
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Democrats are not Socialists any more than Republicans are. | |
 jmn1207Premium
join:2000-07-19
Ashburn, VA | Don't get me wrong, I love the current flat rate structure, but the ISP does not have nearly as much control under this type of system.
By offering flat rates, as the technology moves forward and the speed and latency improves, it opens the door for innovative new products to establish themselves in the market, and with these new products comes consumer demand. The ISP's want to have as much control over when and where they spend resources on improvements. A per-byte billing structure offers far greater control over this aspect, as a properly implemented billing strategy would force customers to ration their bandwidth usage, while creating the ability for the ISP's to manage their revenues more precisely.
It's the dumb pipe panic. Per-byte billing is the most logical method for keeping things under control until the ISP's comes up with their own solutions that they can provide to customers in a way that just barely skirts the anti-competitive laws, gives them nearly exclusive control, and nets the largest profit. | |
r81984Fair and BalancedPremium
join:2001-11-14
Katy, TX Reviews:
·AT&T U-Verse
·AT&T DSL Service
·row44
1 edit | said by jmn1207:Don't get me wrong, I love the current flat rate structure, but the ISP does not have nearly as much control under this type of system. By offering flat rates, as the technology moves forward and the speed and latency improves, it opens the door for innovative new products to establish themselves in the market, and with these new products comes consumer demand. The ISP's want to have as much control over when and where they spend resources on improvements. A per-byte billing structure offers far greater control over this aspect, as a properly implemented billing strategy would force customers to ration their bandwidth usage, while creating the ability for the ISP's to manage their revenues more precisely. It's the dumb pipe panic. Per-byte billing is the most logical method for keeping things under control until the ISP's comes up with their own solutions that they can provide to customers in a way that just barely skirts the anti-competitive laws, gives them nearly exclusive control, and nets the largest profit. Per byte takes the control away from ISPs and makes it harder for them to make the profit they want because monthly usage can change drastically.
Since all the costs are fixed regardless of usage if usage is low one month they are screwed.
It is simple since the costs are fixed and do not increase or decrease with usage it makes no sense to charge by usage.
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Democrats are not Socialists any more than Republicans are. | |
jmn1207Premium
join:2000-07-19
Ashburn, VA | said by r81984:said by jmn1207:Don't get me wrong, I love the current flat rate structure, but the ISP does not have nearly as much control under this type of system. By offering flat rates, as the technology moves forward and the speed and latency improves, it opens the door for innovative new products to establish themselves in the market, and with these new products comes consumer demand. The ISP's want to have as much control over when and where they spend resources on improvements. A per-byte billing structure offers far greater control over this aspect, as a properly implemented billing strategy would force customers to ration their bandwidth usage, while creating the ability for the ISP's to manage their revenues more precisely. It's the dumb pipe panic. Per-byte billing is the most logical method for keeping things under control until the ISP's comes up with their own solutions that they can provide to customers in a way that just barely skirts the anti-competitive laws, gives them nearly exclusive control, and nets the largest profit. Per byte takes the control away from ISPs and makes it harder for them to make the profit they want because monthly usage can change drastically. Since all the costs are fixed regardless of usage if usage is low one month they are screwed. It is simple since the costs are fixed and do not increase or decrease with usage it makes no sense to charge by usage. If history is any indication of how the pricing would work, the ISP's are not going to create a situation that would cause them to lose money per subscriber. Nobody would be getting a price break with per-byte billing. The entry tier would be no less than your current, coveted fixed rate billing. The only difference would be the drastic change in the amount you would be able to download before incurring expensive overage charges, and they would probably create a "complimentary" tier that cost quite a bit more for those wishing to increase their monthly limits.
A per-byte format would never allow for 75% of the current internet subscribers to save a few dollars because of their limited amount of usage. That is not what this is about. It's all about making it impossible for anybody to use a bandwidth intensive product without either paying an outrageous amount of money, or by using something provided solely by the ISP, on their terms, and at their cost, with no legitimate competition. | |
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