reply to bigboy
Re: Unintended consequences I could see and actually support this pricing model, if it were created and maintained in a competitive market with little barrier to entry for new ISPs.
If ISP services were placed into a truly competitive market similar to that theorized by Adam Smith (one with a large number of competitors, homogeneous product, and little or no barrier to entry for new competitors) I think we would all benefit. Look at another article here on DSLR to see how Google's ISP services are now causing Time Warner to offer faster services without caps while simultaneously lowering prices as an example.
What we truly need to move forward in this country is competition - strong competition - for ISP services. I'm not sure how we foster it, but we as a nation should set a goal of having no fewer than 3 to 4 high speed (50/10 or faster, none of this satellite or DSL garbage) ISPs covering every locality of 1,000 or more people. Only then can we start considering ourselves to have a relatively well-wired nation.
Perhaps it is time for many communities to start considering development of municipal broadband as an alternative - those lines could then be rented directly to citizens (at cost) or leased to ISPs for bundling and reselling (at a profit, perhaps offsetting some of the cost charged to citizens). I know this has been discussed before on DSLR, and might be worth further investigation another time.
Palo Alto, CA
I am definitely not in favor of muni broadband. All you need to do is look at local government services to see how well that works.
Even in San Francisco, the epicenter of "government should do everything" is a great example of why it's such a bad idea.