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The logic of Internet pricing diversity vs the fantasy of free limitless bandwidth

The free market Internet works. Both Time Warner Cable and Comcast are logically and naturally experimenting with free market solutions to address increasing network congestion problems that threaten quality of service, because of extremely high and disproportionate bandwidth usage by a small slice of the broadband population. 

  • As widely reported, Time Warner Cable is experimenting in Beaumont Texas with a commercial offering that provides consumers with a range of choices based on their bandwidth consumption and desired speed, and includes a new $1 per gigabyte charge for usage above a plan's monthly limit. 
  • Also widely reported, Comcast is testing in Chambersburg PA and Warrenton VA, a protocol-agnostic network management approach which would potentially delay all of the traffic of extremely heavy users during periods of serious network congestion -- in order to maintain quality of service for everyone.

Free market experimentation is the best, fastest and most efficient finder of solutions to complex difficult problems.

Free market competition produces a diversity of choices for consumers, which is essential because consumers have a diversity of wants, needs and means. A free market naturally provides a diversity of supply offerings to meet the diversity of consumer demands.

If roughly 5% of broadband users are consuming roughly half of the capacity of the network, it makes no sense for the extreme usage of a few to undermine the quality of service for everyone -- or for extreme users to expect everyone else to subsidize whatever level of extreme usage they generate. The free market logically and naturally has those who want and use the most -- pay the most -- when necessary.

Moreover, the free market is the only logical and practical way for literally thousands of networks, hundreds of providers, and a dozen odd technologies -- to efficiently meet the diversity of broadband demand and supply.

What is pure fantasy...

Surprisingly, there are many who argue that there should be no limits whatsoever on Internet bandwidth speeds or consumption because it could stifle -- innovation!

  • It is supremely ironic that those that hold this view are almost always the same folks that do not want to have to pay any more for their infinite bandwidth demand desires.
  • This free-lunch crowd assumes bandwidth should be abundant because that is what they want or the way they think the Internet "should" operate. 

This is naive and outdated thinking emanating from expectations from the dial-up era. Unlimited all-you-could-eat pricing started in the dial-up era because an email/web-surfing Internet had lower and more predictable bandwidth demands. As broadband competition developed, a wide diversity of access offerings emerged from "free or shared" WiFi access points, to low-cost faster than dial-up speeds, to a growing range of broadband speeds and prices. With the advent of a video-enabled Internet there is what some call an exaflood spike in Internet capacity caused by the increased usage of video and high definition video over the Internet. This video broadband spike has simply not been as predictable or managable as the slow-speed dial-up Internet era was before it. 

  • Those who expect a dial-up era industry pricing model for Internet access to never change -- despite dramatic changes in capacity demands -- refuse to acknowledge that market forces prompt a wide variety of experiments and trials to figure out what is the best way to balance the difficult balance of consumer demand/expectations with: volatile usage and capacity growth, and a rapidly changing mix of new and extremely diverse online applications -- from both the edge and inside the network. 

Those who expect that innovation requires unlimited broadband access speeds and consumption to handle whatever users may want to do -- are either in la la land or are so self-centered and self-interested that they can't see how the extreme bandwidth consumption of a few can totally disrupt/congest the Internet for everyone else -- if there are not free market forces and market solutions to manage the extreme market complexity. 

  • To illustrate how irrational and spoiled these activists and so-called future "entrepreneurs" are that they expect infinite bandwidth availability everywhere...
    • Is it reasonable for any entrepreneur to expect free unlimited electricity, water, capital, manpower, rent, computing power, etc.? 
    • No! of course not. Real entrepreneurs understand economics and business.
    • These fantasy-landers think that the Internet just happens magically.
      • It doesn't. In the real world, additional capacity, infrastructure, resources -- actually cost something -- and someone has to pay for it. 
      • The fantasy-landers throw tantrums that there won't be any more innovation unless society up front provides free unlimited bandwidth to everyone. 
        • Ridiculous!

Bottom line: Broadband service and the Internet is obviously important to consumers, the economy, commerce and society. The free market is the best way to meet the ever increasing and ever-changing demands and innovations of the Internet community. 

  • Three things are pretty clear to me on this topic. 
    • First, the free market, while imperfect, is vastly superior than a regulator-managed broadband and Internet economy.
    • Second, expectations of forever free unlimited Internet bandwith are a utopian fantasy, completely devoid of economic or political reality.
    • Third, many of those special interests pushing this fantasy of unlimited free bandwidth, know its all a ploy to trick others into footing the bill for their extreme bandwidth appetites -- all in the name of "innovation!". 

There is no free lunch. Someone always has to foot the bill.

  • Watch your wallet around these unlimited bandwidth folks.         

    

Q&A One Pager Debunking Net Neutrality Myths