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G_Poobah
join:2004-01-17
Schenectady, NY
| reply to maartena
Re: Is Broadband a Utility?
I disagree..
Broadband being billed as a utility is ABSOLUTELY WRONG. Period.
Reason: There is no incremental or unit cost for broadband, unlike electricity or water.
Well, I pay for 1.5mb downstream T-1 for my internet. If I USE all 1.5mb/sec, the cost to the local loop provider (verizon) is NO DIFFERENT than if I use 0mb/sec. The cost to UUnet is NO DIFFERENT than if I use 0mb/sec. So using 1.5mb/sec vs. 0mb/sec is the same cost. In water, if I use 100 gallons per second, then they need to pump 100 gallons more of water, which means there's a unit cost.
The internet is a capital intensive, but unit free utility. You have capital costs, but that's what we are paying for every month. As long as there is REAL COMPETITION, the concept of 'charging for the byte' will never succeed, since I the consumer, will base my decision on what's a better value for me. We don't exist to serve the corporation. Just repeat that and you'll understand.
*final note: Do you REALLY think that you'll get a discount if you only use your high speed for 'web browsing'?
*double final note: Mr. Burns blocking out the sun, in order to increase the revenue of the power plant is probably the closest analogy to what the telco's what for the internet. And we all saw what happened to Mr. Burns. (in the real world, even going to a better hospital won't upgrade your condition from 'dead' to 'alive' though. | |
djrobx
join:2000-05-31
Valencia, CA
 ·PHONE POWER
 ·AT&T U-Verse
·AT&T CallVantage
·Time Warner VOIP
 ·RoadRunner Cable
| quote:
There is no incremental or unit cost for broadband, unlike electricity or water
Your phone line is a utility and it is no different than internet data transfer. If they want to bill by use they can charge per kilobyte. With VOIP threatening to eliminate pay-by-minute telephone service, I think telcos will be looking more and more towards implementing metered rate internet service.
-- Rob
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\\ROB - a part of the SCB local network | |
DaDogs
Semper Vigilantis
Premium
join:2004-02-28
Deltaville, VA
| reply to G_Poobah
said by G_Poobah  :I disagree.. Broadband being billed as a utility is ABSOLUTELY WRONG. Period. You opine.
said by G_Poobah :Reason: There is no incremental or unit cost for broadband, unlike electricity or water. Unfortunately this is not true. If I purchase a T-1 from Verizon, AT&T or someone else. It will carry 1.544 Mbits/sec. That is all it will carry. If I run full 24x7 for one 30 day month it will move 1.544*60*60*24*30 bits of data. Since it is a fixed cost pipe. My price per bit is the monthly cost of the pipe over the total number of bits I can move in a month with that pipe. Therefore I pay an incremental price per bit for the gaurantee from Verizon that I can move that much traffic per month if that is my desire. It is in the Service Level Agreement. They gaurantee me a certain performance. I pay the big bucks to get that performance.
said by G_Poobah :Well, I pay for 1.5mb downstream T-1 for my internet. If I USE all 1.5mb/sec, the cost to the local loop provider (verizon) is NO DIFFERENT than if I use 0mb/sec. Yes it is. If your traffic only stayed on the local loop, your statement would be true. Are there lots of web sites on your local loop? Your carrier, Verizon in this case, pays for their connection to the Internet whence your traffic arrives to your local loop.
said by G_Poobah : The cost to UUnet is NO DIFFERENT than if I use 0mb/sec. So using 1.5mb/sec vs. 0mb/sec is the same cost. In water, if I use 100 gallons per second, then they need to pump 100 gallons more of water, which means there's a unit cost. Do they pump that water from your local loop or does that water come from a water tower somewhere (THE INTERNET).
said by G_Poobah :The internet is a capital intensive, but unit free utility. BULLSHIT.
said by G_Poobah : You have capital costs, but that's what we are paying for every month. As long as there is REAL COMPETITION, the concept of 'charging for the byte' will never succeed, since I the consumer, will base my decision on what's a better value for me. We don't exist to serve the corporation. Just repeat that and you'll understand. Mark this down and take it to the bank. You will live to see per byte pricing on data arriving at your computer by ANY medium.
said by G_Poobah :*final note: Do you REALLY think that you'll get a discount if you only use your high speed for 'web browsing'? *double final note: Mr. Burns blocking out the sun, in order to increase the revenue of the power plant is probably the closest analogy to what the telco's what for the internet. And we all saw what happened to Mr. Burns. (in the real world, even going to a better hospital won't upgrade your condition from 'dead' to 'alive' though. What? 
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We dogs are NOT impressed with pussy cats. | |
calvoiper
join:2003-03-31
Belvedere Tiburon, CA
| reply to G_Poobah
said by G_Poobah :...There is no incremental or unit cost for broadband, unlike electricity or water. ... Well, I pay for 1.5mb downstream T-1 for my internet. If I USE all 1.5mb/sec, the cost to the local loop provider (verizon) is NO DIFFERENT than if I use 0mb/sec. ... The internet is a capital intensive, but unit free utility. You have capital costs, but that's what we are paying for every month. As long as there is REAL COMPETITION, the concept of 'charging for the byte' will never succeed, since I the consumer, will base my decision on what's a better value for me. ... Poohbah, I beg to differ.
EVERY ISP today uses some form of "resource sharing" or "concentration" to serve its users. You may in fact be buying 1.5mb/sec and you may well be entitled to 1.5mb/sec connection to the Internet.
That does not mean that your ISP necessarily installs and maintains 1,000 times that capacity (1.5gb/sec) all the way through to every peering point for every 1,000 customers it serves. In reality, the ISP's high level connections are much smaller than that, wisely recognizing that not every customer will be up/downloading the full 1.5mb/sec for each and every one of the 86,400 seconds in a day.
As more and more users "fully use" their connections (e.g., for viewing video on demand) then the overall size of the high-level connections at the peering points will increase--the Internet "backbone" connections will have to get bigger for each ISP, and this will come at increased costs.
Consider, as an isolated example, what would happen if US citizens suddenly became fascinated with Australian video on demand--wouldn't that vastly increase usage on the US-Australia circuits carrying Internet traffic? Wouldn't there be increased costs? [I will admit that highly efficient "caching" techniques can reduce these types of costs, but caching doesn't eliminate these costs, and caching has its own problem set.]
Over time, it's quite likely that ISPs will migrate to "bit based pricing"--as has been pointed out above, this is a common occurrence in business where usage of facilities increases and not all users increase their usage in uniform lockstep.
It's also true that sometimes economics moves costs and drives prices the other way--long distance telephone service is now moving from "per minute" to "all you can call" because long-haul fiber and switching is now so cheap. (At the dawn of nuclear power, some said electricity would become "too cheap to meter"--but they weren't quite correct.)
In short, the cost to Verizon if most of their users just read BBR and send e-mail is quite different than if most of their users spend 23 hours a day downloading bulk content and watching streaming video, and sooner or later Verizon's pricing will likely reflect that. If it doesn't, it will end up with all of the "power" users and someone else using incremental pricing will undercut it for "light" users.
(BTW, I don't look forward to that day any more than you do, but it will probably happen.)
calvoiper
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VoIP--the death knell of remaining voice monopolies! | |
calvoiper
join:2003-03-31
Belvedere Tiburon, CA
| As an indication of the upgrades (and associated costs) necessary as people maximize their consumption of available bandwidth, check out this article (from Morning Broadband Bytes) about how UK competition is resulting in providers over-concentrating their backbone connections....
»www.lightreading.com/document.as···=techweb
calvoiper
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VoIP--the death knell of remaining voice monopolies! | |
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