This is not accurate. Any time you have multiple people sharing a physical link you end up with a marginal cost for bandwidth in any sensible economic arrangement. If you insist on having every part of your connection dedicated to yourself, you're effectively back to a circuit-switched network with the corresponding orders-of-magnitude price hike in providing it.<p>For example, in the UK the last mile is usually supplied by the incumbent (BT), who also (virtually) route that traffic over a private IP-based backbone to ISPs to provide the backhaul. They charge ISPs by capacity. So these ISPs effectively have marginal costs that vary throughout the day according to demand, since they have to pay directly for an appropriate (fixed) amount of capacity to be available.<p>We also have LLU (local loop unbundled) ISPs who still use BT's last mile but provide their own equipment directly at the exchanges, thus effectively providing backhaul straight from the exchanges. They may only have a fixed cost for bandwidth depending on how they provision those links. But if they are buying capacity from anyone else, they will be charged by how much they are buying, and suddenly they have a marginal cost again.<p>The article says that Netflix are complaining about the situation where <i>Netflix</i> have brought the traffic to the last mile. <i>In this specific situation</i> it makes sense. But in the general case, ISPs still have marginal costs in providing bandwidth.
It certainly seems like a little bit of consumer education should go a long way, but without competition – or in the presence of collusion – we'll end up with something looking more like text messaging.<p>Everybody knows the cost to the carrier is only a fraction of what they charge, but there's no competitor willing to charge less. Education, unfortunately, seems to only go so far.
They're clearly limiting this discussion to wired ISPs, where I think this is reasonable.<p>Wireless (cellular) users can look to satellite ISPs to see just how crazy things can be. On a lot of satellite systems, users are sold "unlimited" bandwidth, but then aggressive fair access policy, unpublished caps, etc. apply, so your unlimited 2Mbps x 256Kbps connection might actually only let you transfer 500 MB/month.<p>True hilarity happens on the L-band services like Inmarsat BGAN when either someone leaves Windows Update or other autoupdate turned on, or isn't aware of the per-MB charging. $3 to $25 per megabyte adds up quickly; I've personally seen a $160k/mo bill due to users downloading movies and music over a BGAN system (with the bill paid by a third party, obviously, and no mechanism in place to communicate costs to the users).
Now I wonder why Netflix might have a problem with that...<p>In any case, they're absolutely right. These plans are clear cash grabs, and they wouldn't exist if we had proper competition.
This has been the status quo in South Africa from 1997. In 2009 I lost a legal battle via the Advertising Complaints Commission.<p>It boiled down to the wording. Uncapped means that they can shape your line to s<i></i>*, and still sell it as a 4meg ADSL service.
It's fun to look around at the limits in terms of how long it'd take you to do it with a 56k modem.<p>250GB, which they consider pretty high, would actually take a while:<p><a href="http://www.wolframalpha.com/input/?i=250GB+%2F+56Kbps" rel="nofollow">http://www.wolframalpha.com/input/?i=250GB+%2F+56Kbps</a><p>But smaller values are less impressive. 10GB is only half a modem month.<p>Looking at the $1/GB thing gets more interesting. How much would it cost me to run a 54Kbps modem 24/7 for a month at $1/GB:<p><a href="http://www.wolframalpha.com/input/?i=%2856Kbps+*+1+month%29+*+%241%2FGB" rel="nofollow">http://www.wolframalpha.com/input/?i=%2856Kbps+*+1+month%29+...</a>
I hate the idea of paying per GB.<p>However, the foundation of this argument is baseless. All that discussion of how much it <i>costs</i> to provide the bandwidth really is irrelevant.<p>I've said it before and I guess I have to keep repeating: the price of a product is unrelated to its cost!<p>The price of a product is the point at which a producer is willing to make another unit of it, and at which a consumer is willing to buy that unit. Costs don't come into the discussion at all. Everything based on the perceived value of the product from each party's perspective.
I'm from Australia where fixed quotas on wired (typically DSL) are <i>de rigeur</i> [1].<p>Several years ago the ACCC (Australian Competition and Consumer Commission) banned the use of the word unlimited on Internet plans unless they were truly unlimited meaning no overage fees and no traffic shaping after hitting a soft cap.<p>Compare that to the UK where they've de died that unlimited means what 90% of users use, which is as little as 5GB/month!<p>In the US you typically still have caps (hidden behind terms like "fair use"). So the only difference in Australia is the ISPs are upfront about it.<p>So in Australia the net effect has been:<p>1. You buy the plan most suited to your usage. In other words you pay for what you use.<p>2. You get what you pay for. If you pay for 1TB/month you get 1TB/month.<p>Both of these situations are much better than say Comcasf or Time Warner really only giving you 250GB/month or UK providers declaring you're a downloaded and moving you to a network that in the evenings is utterly unusable.<p>The fact is that bandwidth still has a marginal cost so it's not unreasonable to expect users to pay for that. Nor is tiered pricing based on usage a bad thing.<p>In New York I have one choice for high speed Internet: Time Warner (some areas have Verizon FiOS; not mine). There are two plans for $65 and $99 (iirc).<p>In Australia I have typically a dozen choices or more ranging from $20 to ¢150+ pe month based on the features I want. How can that possibly be a bad thing?<p>[1]: <a href="http://www.iinet.net.au/broadband/plans.html" rel="nofollow">http://www.iinet.net.au/broadband/plans.html</a>
The real problem isn't even that they're charging by the gigabyte (although they are, and I strongly dislike it).<p>No, the REAL problem is that they preferentially exclude their own services from these charges/caps.<p>For example: If you get Bell's IPTV offering (in Canada), do you really think they're going to cap your consumption? What about Rogers on Demand? Is that subject to the same caps?<p>The answer is no, making their services more attractive than competitors like Netflix.<p>Ergo, the only solution is separation of concerns. Providers of pipe should not be providers of content. Ever.
I know, I know I say this every time, but man, I would love someone in New Zealand to come and tell my broadband provider that their top-of-the-line plan that I pay $80 NZD a month for that only gives me 40 gigs is BS.<p>Oh and we've already prioritised traffic too..If i was to buy tivo, then all my on demand data would be "free". I don't think Net Neutrality is even a remote consideration here - though there are many of us who passionately believe in it.
At the risk of sounding trollish, this is one of the reasons I absolutely love living in Slovenia.<p>30 euro a month for unlimited and unshaped 20/20 FTTH. :)<p>From what I understand it's like this in a lot of Europe actually, especially those scandinavian countries.