ISPs Don't Really Want Per Byte Billing > Bandwidth costs money. (Duh!)

Bandwidth costs money. (Duh!)

OK....there is a very fundamental mistake in your logic. You are correct that bandwidth cost money, but you are conflating two thing....bandwidth and usage.

Bandwidth is the CAPACITY of your Internet connection. Think of it as the size of an empty pipe. This is what we pay for today...a connection SPEED or bandwidth. Back to the pipe. The bandwidth (size) of the pipe doesn't care if it's empty or if water is flowing through it at full rate.

Usage on the other hand is the AMOUNT of water that flows through the pipe. Now the utility company charges you based on the AMOUNT of water you use because water is a limited natural resource.

Now back to your Internet bandwidth. ISPs know that the true cost of providing service is in providing the connection. This is because that's the same pricing model the ISPs are charged to pay for their connection to a backhaul carrier or to each other. The cost is in the connection size or capacity or BANDWIDTH, whether that connection is running at full capacity or sitting idle. Bits themselves cost nothing. They're not a limited natural resource like water, gas, coal, etc.

So in summary:

Bandwith = capacity = speed = true cost of service and the fair business model we operate under today.

Usage = amount = actual bits = a fabricated business model not based on actual costs which represents a pure money grab by ISPs based on punitive overage charges.

reply to SuperWISP
What you are really saying is that nothing should be able to get in the way of an ISP over selling connections to their obviously limited bandwidth.

Thanks, got it.

reply to Michael C
You've left oversubscription out of your equation.

The sum of all access connections (ie, end-user broadband connections) is greater than the total capacity at distribution. As usage at the edge increases, real money needs to be spent to upgrade capacity at distribution.

That's where the usage-based billing systems are derived from -- it's developing the funding source to provide the capital for future upgrades on oversubscribed links. It sets up a system that those who contribute the most towards driving future expansion pay end up covering most of the expense.

reply to SuperWISP
Except for a few crazies here I don't think anyone here opposes reasonable network management so long as it is agnostic to the type of traffic and origin of the traffic. I also don't mind having tiered plans, but the overage must reflect the cost of delivery and not be a penalty as such I do believe that these also need to be regulated. Not based on a static number, but based on a ratio of speed to base cost.

Something like the maximum rate you can charge per GB is equal to twice (the monthly cost - the fixed cost associated with it) / The GB cap. So a 150GB cap like comcast provides which costs $100 per month, let's say $20 comes from the fixed cost (this is a guess) would mean a price cap of $80 / 150GB = $0.53 per GB.

For a smaller plan like you see for wireless which have much higher data costs which is say $100 per 5GB with the same fixed cost (again this cost has nothing to do with reality, real numbers would be nice) would be $80 / 5GB = $16 per GB.

reply to axiomatic
Just because you can't connect all of the people at the same time at full speed doesn't mean you're overselling it. If it did you would have to say we oversell are: roads, electrical grid, phone system and water system. All of these are based on average maximum usage models.

It is true that a lot of ISPs do oversell their connections (according to the average maximum usage), but this isn't universally true and bandwidth management is still important even without overselling to ensure that the entire system operates efficiently just like how we have traffic laws to ensure that our roads work correctly.