"Any half way decent free market economist will tell you that every non Netflix user is subsidizing the crap out of Netflix users under the current set up and that's not very free marketish."
Can you explain the reasoning of this statement?
Can you explain the reasoning of this statement?
I think he means that people who pay for internet access and then barely use it subsidize the people who do use it. Just like gym memberships that aren't used subsidize those that are.
But it's a specious argument. Just because some users are more profitable than others doesn't mean that it's OK to charge money to providers to not degrade the pipe that I'm paying for.
If I want to download at full speed 24/7, I should be able to do that (barring any specific limits in my contract with the ISP). Yes, I will be a less profitable customer than one who sends an email once a week, but those are the breaks: Either change the contract so its limits are clear, or make sure that the average profit stays enough in the black to cover the cost of the outliers.
I'm paying for a service. If they aren't providing that service, and they are limiting my connection to try to shake down providers, they're doing it by hurting my service experience. And if they're doing that in a market where there are no ISP options, then it's an abuse of monopoly power.
And any "half way decent free market economist" should recognize that monopolies can and should be regulated. Especially when the monopoly is on something that the UN has declared to be a human right. [1]
[1] http://www.thewire.com/technology/2011/06/united-nations-wik...
Why exactly? Replace your reasoning with any other commodity and does it still make sense? What makes data streaming so holy?
If they want to sell limited bandwidth, that's fine. But if they're selling me a product that claims it's unlimited, then they should be prepared to actually offer that product.
What commodity DOESN'T operate in the manner it's advertised?
Now imagine the poorest household in town has to decide if they can afford water service. They would like to purchase a small amount of water for showers and cleaning, but must buy an unlimited supply of water just like everybody else. Some households may choose to go without water to pay for food. This is bad for the poor and bad for the utility who loses out on would-be customers.
Now imagine if the utility proposed a variable rate structure. The businesses that sell products that are consumed along side water, like sprinklers or fish tanks, (Silicon Valley) would fight hard against the utility!
Water utilities btw have "pipe neutrality", i.e. it's none of their business what you do with the water you are paying for, and they certainly can't shake down dishwasher manufacturers for money to compensate them for the water that's being used by their customer's dishwashers :-)