Consumer data consumption has increased exponentially in a little over a decade. According to broadband insight reports from OpenVault, monthly household data usage has skyrocketed from an...
The infrastructure over which that data travels isn’t free. If you have a resource and it has any kind of scarcity, you want to tie consumption to the cost of producing more of it.
You can reduce the transaction cost – reduce hassle for users using Internet service – by not having a cap for them to worry about, but then you decouple the costs of consumption.
Soft caps, like throttling, are one way to help reduce transaction costs while still having some connection between consumption and price.
But point is, if one user is using a lot more of the infrastructure than any other is, you probably want to have that reflected in some way, else you’re dumping Heavy User’s costs on Light User.
You pay them for a certain throughput, that is your limit, if they can’t provide that limit then they need to advertise and sell the actual limit they are comfortable providing.
I’d argue that the FCC’s recent Broadband Consumer Label proposal is more important. Part of the problem with broadband as a market is that providers are able to bury the true cost and product under reams of legalese that no one ever reads. Economists refer to this as asymmetric information, where one party to a transaction has vastly more information than the other. Forcing providers to show all costs and restrictions up front would go far in preventing them from fooling customers.
I would also like it to be harder for providers to change their rates. It’s frustrating to constantly have rates jacked up when I’m not seeing much of an increase in service. I finally left Comcast over their rate increases and calls trying to upsell me on services I had no interest in.
If they’re advertising a guaranteed rate, sure – and there are contracts that exist where one does buy guaranteed rates (usually over some period of time, though). Some businesses may buy that. But if you look at a typical consumer ISP, they usually aren’t selling that. They’ll have something saying that the speed isn’t guaranteed, or “Internet speeds up to” or something along those lines.
Internet: Actual speeds vary and are not guaranteed.
The ISP I use (small, most people won’t be using it) says “Up to X speed” next to each price on their pricing page.
Like, consumer ISPs are not going to generally sell guaranteed-rate service, and most customers aren’t going to want to pay for what that would run. That’s not just a function of some users using a lot more than others, but because they’re also overselling the infrastructure. They maintain infrastructure sufficient to handle load if customers are only using a portion of that maximum – that is, if every one of their customers decided to simultaneously saturate their line, even if those customers aren’t particularly heavy users normally, they’d simply overwhelm what infrastructure is there.
Now, that being said, I do think that it might be legitimate to ask ISPs to disclose overselling ratio (or maybe there’s some kind of better metric, like how percent often their internal infrastructure to an average customer is above N% utilization). Or to explicitly disclose soft caps or something. Those might be useful numbers in helping a customer compare ISPs. But they aren’t presently selling and won’t be providing guaranteed sustained rates – that’s just the reality of what kind of Internet service that can be provided at what consumer prices are.
The infrastructure over which that data travels isn’t free. If you have a resource and it has any kind of scarcity, you want to tie consumption to the cost of producing more of it.
You can reduce the transaction cost – reduce hassle for users using Internet service – by not having a cap for them to worry about, but then you decouple the costs of consumption.
Soft caps, like throttling, are one way to help reduce transaction costs while still having some connection between consumption and price.
But point is, if one user is using a lot more of the infrastructure than any other is, you probably want to have that reflected in some way, else you’re dumping Heavy User’s costs on Light User.
You pay them for a certain throughput, that is your limit, if they can’t provide that limit then they need to advertise and sell the actual limit they are comfortable providing.
I’d argue that the FCC’s recent Broadband Consumer Label proposal is more important. Part of the problem with broadband as a market is that providers are able to bury the true cost and product under reams of legalese that no one ever reads. Economists refer to this as asymmetric information, where one party to a transaction has vastly more information than the other. Forcing providers to show all costs and restrictions up front would go far in preventing them from fooling customers.
I would also like it to be harder for providers to change their rates. It’s frustrating to constantly have rates jacked up when I’m not seeing much of an increase in service. I finally left Comcast over their rate increases and calls trying to upsell me on services I had no interest in.
If they’re advertising a guaranteed rate, sure – and there are contracts that exist where one does buy guaranteed rates (usually over some period of time, though). Some businesses may buy that. But if you look at a typical consumer ISP, they usually aren’t selling that. They’ll have something saying that the speed isn’t guaranteed, or “Internet speeds up to” or something along those lines.
Lemme grab Comcast, for an example.
googles
https://www.xfinity.com/learn/deals/internet#Pricing&otherinfo
The ISP I use (small, most people won’t be using it) says “Up to X speed” next to each price on their pricing page.
Like, consumer ISPs are not going to generally sell guaranteed-rate service, and most customers aren’t going to want to pay for what that would run. That’s not just a function of some users using a lot more than others, but because they’re also overselling the infrastructure. They maintain infrastructure sufficient to handle load if customers are only using a portion of that maximum – that is, if every one of their customers decided to simultaneously saturate their line, even if those customers aren’t particularly heavy users normally, they’d simply overwhelm what infrastructure is there.
Now, that being said, I do think that it might be legitimate to ask ISPs to disclose overselling ratio (or maybe there’s some kind of better metric, like how percent often their internal infrastructure to an average customer is above N% utilization). Or to explicitly disclose soft caps or something. Those might be useful numbers in helping a customer compare ISPs. But they aren’t presently selling and won’t be providing guaranteed sustained rates – that’s just the reality of what kind of Internet service that can be provided at what consumer prices are.