Posts Tagged ‘data plans’

Byte-metered pricing rears its ugly head in the name of ‘net neutrality’

January 21, 2011

The following is a critique in response to an article on Slate posted by a Farhad Manjoo, who tries to make the case that Internet pricing by the byte as opposed to by bandwidth is not only inevitable but preferable (or, at least, “reasonable”).  Mr. Manjoo’s comments can be viewed here .

Mr Manjoo,

Your perspective is misguided and out-of-whack, as is your pronouncement of what rates seem “fair” or “reasonable”, for several reasons.

For starters, charging by the byte is more a measure of *storage* cost, and not appropriate to the concept and practice of streaming experience which the internet has quickly become — and for which the marketing and advertising promotions of the ISPs and Telcos are largely responsible !

Consider this:  would you propose that the billing paradigm for cable TV be changed such that it is based on the amount of video information which is broadcast over cable channels ? It is quite easy to measure the amount of information bits contained in cable video transmission, and you could extend your rationale to suggest that viewers of cable TV programming have a certain allotment of total informational bits which they can consume in a month, and which they must budget, lest the charges for the service be escalated.  If you watch too much TV and exceed your allotment, you pay more.

When you elect a cable TV selection of programming, the assumption is that you can ‘watch’ that programming as much as you want in any given month in exchange for the monthly charge.  In other words, the contract is based on agreeing to pay for a given level of streaming, always on, experience — not the number of video bits which are pushed down the cable.

With regards to connectivity to the Internet, if an ISP quotes a certain level of bandwidth/time (e.g., 5 Megabits/sec), that is the value proposition which a consumer elects to pay a certain amount for on a monthly basis.  Lower bandwidth is lower cost, and the quality and capabilities of the informational or media experience changes according to the bandwidth elected.

Consumers have no clue as to how many bytes it takes to render a particular web page, nor how many bits are being streamed to provide a given level of audio or video resolution.  That is a completely foreign value proposition for the contemporary Internet consumer, and your estimations of how many ‘bytes’ are reasonable represents both a static and irrelevant measure of what a consumer is expecting to pay for.

I am not suggesting that consumers be given ‘infinite’ bandwidth for a fixed cost, mind you, and I certainly recognize that per-user bandwidth quotations of quality of service has a significant total network infrastructure capacity requirement and expense.  But charging by the byte as a means to somehow reconcile total system bandwidth with aggregate consumer demand is bass-ackwards, and guaranteed to ultimately cause dissatisfaction and disruption of both consumer demand as well as impair the continued growth and expansion of the entire Internet-based economy.

Charging by the byte simply offers the ISPs and Telcos the ability to continue to grow revenue without concomitant improvement and investment in Internet infrastructure, and turns the Internet into a fixed utility of bandwidth-capped pipes appearing to deliver a finite, consumable resource like water or natural gas, as opposed to the far more unlimited ability to simply move electrons or photons back and forth at will without exhausting the bits, or needing to ‘store’ them.

What the ISPs and Telcos need to do is simply quote bandwidth at a rate that they can deliver to the growing population of consumers, and use the growth in consumer volume as the source of revenue to fund ongoing capital investment in infrastructure and total system bandwidth to meet the growing aggregate demand.   LOWER the continuous bandwidth per time per user if need be in order to accommodate supplying continuous bandwidth at that level of service to the customer population !  Charge more for higher bandwidth, yes, but do NOT quote ultra-high-speed bandwidth for a rate which the infrastructure can not support, and which would force you into ‘metering’ out the total bandwidth in a piecemeal, non-continuous, and potentially interruptable service based simply on number of bits or bytes.

Your estimation of what is ‘fair’ or ‘reasonable’ in terms of bits or bytes per month is totally unfounded,  would lock in a fractured and fragmented Internet experience calibrated at current levels of capabilities, and would proceed to make that capped experience subject to outages and interruptions based on unexpected budget constraints as underlying amounts of data for certain types of services would necessarily evolve.

You display your most egregious lack of appreciation of what the Internet is really about with the following comments:

And say hooray, too, because unlimited data plans deserve to die. Letting everyone use the Internet as often as they like for no extra charge is unfair to all but the data-hoggiest among us—and it’s not even that great for those people, either. Why is it unfair? For one thing, unlimited plans are more expensive than pay-as-you-go plans for most people. That’s because a carrier has to set the price of an unlimited plan high enough to make money from the few people who use the Internet like there’s no tomorrow. But most of us aren’t such heavy users. AT&T says that 65 percent of its smartphone customers consume less than 200 MB of broadband per month and 98 percent use less than 2 GB. This means that if AT&T offered only a $30 unlimited iPhone plan (as it once did, and as Verizon will soon do), the 65 percent of customers who can get by with a $15 plan—to say nothing of the 98 percent who’d be fine on the $25 plan—would be overpaying.

The Internet is NOT a storage device !  And your assessment as to what constitutes reasonable ‘use’ of the Internet, based on current usage (and justifications by AT&T ! ) is backward-looking.  You might as well be saying that, because 98 percent of the population “gets by” with wagons pulled by horses, there is little need for the horseless carriage !  That is sooo 1890 !!  Best to look ahead to the future, not in your rear-view mirror.

You need to rethink your concept on Internet billing, or you will soon find yourself in the position of needing to calculate the equivalent of how far you can drive on a fixed battery charge in any given month.