Remember this prank image from a few years ago? <a href="http://craphound.com/images/netneutralpricing.jpg" rel="nofollow">http://craphound.com/images/netneutralpricing.jpg</a><p>Yesterday's jokes are tomorrow's PowerPoint briefings.
<a href="http://static.arstechnica.com/12-15-2010/allot3.jpg" rel="nofollow">http://static.arstechnica.com/12-15-2010/allot3.jpg</a>
"One obvious potential problem with switching from an "open Internet" approach to this "charge by app" approach to data is just how much power it gives the established players. Say some new video on demand service comes along; it needs plenty of bandwidth, but it can't afford to strike a deal with carriers so that its app bandwidth is free to users. How many users will even try it out when an app from Hulu or Netflix is free (to them) to use, while accessing the startup will cost them money?"<p>This is exactly why such a plan would be short-sighted on the part of the carriers. "Hey, people love the internet. How about we sell them access, and simultaneously start choking the life out of it?"<p>Carriers already proved they can't compete with the marketplace to make operating systems and apps; now they're considering a plan that effectively picks winners from that marketplace? Guess what - it will suck compared to true competition.<p>Sell us access and stay the heck out of the way. That's what your customers want, and it will be more profitable for you in the end.
Imagine the following conversation:<p>Carrier: "You're making money by having access to our customers. You should pay us."<p>Facebook/Youtube/whoever: "You're making money by selling access to our service. You should pay us."<p>[awkward slap-fighting ensues]<p>Seriously, is either of these more true than the other? And if so, is it the other party's fault?<p>I can't see how it's productive to argue about it, tangle it up in financial bargaining, and complicate everything for the users. Carriers and services should focus on doing what they do best and charging a fair price for it, not trying to cast a symbiotic relationship as a parasitic one.
Don't count this technology out. There is a lot of pressure to take the money loser services like Public IP transport and turn it into a real money maker. Charging by the bit has been on the radar for a long time and there is a significant effort to make it happen.<p>At least one company (Procera) has demonstrated the ability to identify INDIVIDUAL CHARACTERS within a WoW-type game (I think it actually was WoW) and filter/rate-limit traffic BASED ON THE INDIVIDUAL CHARACTER TYPE. (e.g. Orcs respond slower then elves accomplished at the NETWORK level)
And as people find new and interesting ways to encapsulate and tunnel traffic through their mobile carriers, I'd bet "uncategorized" traffic will get billed at an obscene rate that makes it less desirable than just horking over 5 EUR per month for some random service.
> "The potential upside to users is a smaller data bill."<p>Ideas that are terrible for end users almost always include a line like this: one small potential benefit for the group getting screwed. The possibility that any users will see that benefit approaches zero the closer the plan comes to fruition.
How about no? I want a single bill for data across all of my devices.<p>I pay a flat rate for my cable internet connection. It doesn't matter how many devices I use on my wifi network. The bill remains the same. I want the same thing for my mobile devices.
In Canada, both Rogers and Bell have been doing this for a while already. Many of their data plans include "unlimited social networking" which is unmetered data to Facebook, Twitter, Myspace, and a few IM services.<p><a href="http://www.rogers.com/web/Rogers.portal?_nfpb=true&_pageLabel=WLRS_Plans" rel="nofollow">http://www.rogers.com/web/Rogers.portal?_nfpb=true&_page...</a><p><a href="http://www.bell.ca/shopping/PrsShpWls_SmartphoneCombo.page" rel="nofollow">http://www.bell.ca/shopping/PrsShpWls_SmartphoneCombo.page</a>
I'm pretty sure that AT&T can't ask IBM for a cut of consulting revenue for delivered over the phone, so how does AT&T get a cut of netflix revenue for bits delivered over the intertubes?
The promises of additional revenue always seem ignorant of the basic reality that users are only willing to pay so much per month for mobile service.<p>If you assume that is true, the result is that people end up paying the same amount for less service. Getting into the business of selling less service for the same money seems suicidal in an established commodity market.<p>It is too bad the cable tv model hasn't played out to its conclusion yet. It is pretty obvious that it would serve as another corpse on this trail as a warning.<p>The Telecom / wireless industry is absolutely littered with expensive, legacy, high margin solutions to previous problems. Key among them are military / 911 grade service level equipment. Frankly, people don't have the same expectations of IP applications, and those apps don't rely on service at the same level.<p>I contend that the road to profitability is through reduced cost, not increased revenue or reduced service.
This is basically what Amazon is planning to launch with the KDK. Amazon's model is fixed price per app, not bandwidth based.<p>Since 3G is free with the device, apps that need bandwidth need to have a subscription price to use the network. Amazon takes some, you get some. Presumably, Amazon uses this to offset 3G costs or pays it to the carrier.