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.
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.