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You are hereThe logic of Internet pricing diversity vs the fantasy of free limitless bandwidth
Submitted by Scott Cleland on Wed, 2008-06-04 19:19
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.
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!
This is naive and outdated thinking emanating from expectations from the dial-up era.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 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.
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.
There is no free lunch. Someone always has to foot the bill.
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