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How does changing plans from unlimited to metered data make them more 'capitalistic'?

An example of making things more capitalistic would be to make illegal the municipal contracts granting monopolies on last mile service.

In an unlimited system, a customer which uses 10GB/month grosses the company the same amount as a customer who uses 1TB/month.

Going to a metered system, people who use more bandwidth are charged more.

Technically ISPs don't pay for bandwidth, but for a 'x' GBps link. But our electric companies do the same, they pay for 'x' Kw/h (a power plant can only output so much electricity per hour).

>...make illegal the municipal contracts granting monopolies on last mile service.

Thats a very hard peice of legislation to pass. I'm not even sure if Google Fiber would agree to this. Even if this legislation passed, would that fix our net neutrality rules?

Moving to a metered system gets rid of most of the ISPs arguments against net neutrality....all of them except having a company pay for your bandwidth.

> Thats a very hard peice of legislation to pass.

That may be so. But all of Europe manage to go from monopoly telcos to a system with guaranteed access for ISPs to the last mile.

> Moving to a metered system gets rid of most of the ISPs arguments against net neutrality..

In my experience, from having run an ISP: It also massively curtails usage, to the extent that it is a net negative for the ISPs because users become less dependent on you, yet don't pay you as much.

There's a reason why ISPs went to "unlimited" contracts: If users have to meter their usage, they tend to turn out to be willing to pay less, because their internet connection is suddenly something where they have to think about the money they spend from day to day, rather than something that's just a fixed "thing" in the background they don't think about. People are willing to pay extra for "unlimited" to not have to think about it, and when they don't think about it, they don't cancel.

>It also massively curtails usage, to the extent that it is a net negative for the ISPs

I think that's the reason why Comcast wants to do the 300GB 'unlimited' with a $10/50GB overage charge. As they get the best of both worlds.

The issue with having a 'hybrid' plan is that to Comcast's finance department they still view it as a fixed gross per customer. Where-as with metered usage, the finance department would hopefully realize that the bigger the pipes the greater the potential for $$$.

In regards to peering, Comcast currently has no incentive to upgrade there peering exchange points. But in a metered system, they have a lot of money to gain for upgrading the exchange points. Giving level 3 and Comcast incentives to upgrade peering exchanges. (Today its only Level 3 who benefits).

Interesting suggestion.

I've often thought about this. What I hear (I'm not very knowledgeable in this field) is that somewhere up the chain, someone has to pay for bandwidth (per GB) (can anyone confirm this?). But consumers prefer to know how much they will pay each month, and so they get that -- a flat rate service.

So now we have a situation where a company's expenses are measured in GB of data transferred, and their customers pay proportional to their maximum transfer rate. This means the incentives of this company and its customers are not aligned.

It's a bit like if you rent a car and the price you pay is proportional to the top speed of the car, but the expenses of the car hire company is proportional to how many miles you drive.

Where I live, we're currently in the process of wiring up the apartment complex to FTTP (fiber to the buildings and copper from the basement up to the apartments). I'm in charge of the process, and I've thought about asking whether I can get an unlimited connection speed, but pay per GB. I haven't asked yet, but I think I might prefer this over a flat rate price per month. When I use the connection I pay, and it's blazingly fast, and when I don't use it it's free. Contrasted with being slow when I use it, and also paying when I don't use it.

somewhere up the chain, someone has to pay for bandwidth (per GB) (can anyone confirm this?)

No, wholesale transit is sold by bandwidth; e.g. a 10 Gbps pipe costs around $5,000/month regardless of usage.

So now we have a situation where a company's expenses are measured in GB of data transferred, and their customers pay proportional to their maximum transfer rate. This means the incentives of this company and its customers are not aligned.

More like the ISP's expenses are proportional to aggregate peak demand, but yeah, it's not aligned.

> No, wholesale transit is sold by bandwidth; e.g. a 10 Gbps pipe costs around $5,000/month regardless of usage.

When I went around asking for a price for a shared connection to out apartment complex, I was asked how many tenants we had. And the reason -- I was told -- that they asked for this, was that the more tenants the more traffic consumed.

So it seems to me that somewhere, someone is paying for traffic. Or else I don't understand.

If you want to buy x Gbps no questions asked, that is definitely a service that exists. It sounds like you were dealing with retail-level sales people and you weren't clear about what you want to buy so they're trying to help you figure it out.

End user ISPs often charge by traffic. But buying transit from larger ISP for colocation or to operate your own ISP for example, is typically done based on some combination of port speed, committed information rate (CIR) and peak usage within a defined interval (burst).

For example, at work we pay abour $6 per Mbps 95th percentile use averaged per 5 minutes, with a 10Mbps CIR and 100Mbps port speed at one of our data centres. This means we always pay for at least 10Mbps. Our ISP then measures our traffic and averages it over 5 minute intervals. They then throw away the top 5% of samples (so we can have short traffic spikes up to our port speed without paying extra), and we pay for the higher of 10Mbps and the next sample.

Any bandwidth above the CIR is entirely dependent on whether or not our ISP has spare capacity. The higher your requested port speed, the less likely you are of being able to burst much more than your CIR - any halfway decent provider will have 90Mbps excess capacity much of the time, so paying for 10Mbps CIR and bursting to 100Mbps is not unlikely, but paying for 1Gbps and being able to burst to 10Gbps gets far more dicy.

At some higher speeds some providers will only offer links where CIR == port speed - effectively a "unlimited" connection. If you know your bandwidth exceeds the CIR a lot of the time, you will typically want to pay for a higher CIR for the reason that you otherwise risk getting throttled even if your port speed is higher and your connection in theory is burstable.

Effectively the sum of the CIR of their customers + some margin is what the ISP will turn around and contract with their transit providers and peering partners for. If other customers don't use their CIR, and your CIR is lower than your port speed, your ISP is likely to let you burst (at a cost) that moment, but traffic within the CIR (should) always have priority.

Virtual Servers come with some TeraBytes per month. AWS and Google Compute Engine counts traffic by the GigaByte.

Most upstream providers at colocation facilities use 95th percentile pricing, that is you have a gigabit link, or a 10g link, and every 5 minutes they take a sample of current speed, and then at the end of the month they sort those samples and take the sample at the "95th percentile", which can be understood as link utilization discarding bursts which, gives a speed, which you can multiply by the length of the month, and you get transferred bytes (or octets as network/telco people like to call it).

A 100Mbps link is ~30 TB per month. If you do business on the internet, the moment you get big enough, you can negotiate these prices.

Just buying a gigabit ethernet port is not even that expensive ( https://ams-ix.net/services-pricing/pricing ), but this is without peering, and you have to either deal with every non-open partner there ( https://ams-ix.net/connected_parties ) or get transit from someone who has a full coverage of the internet. (That is all the prefixes assigned by local internet registries are reachable via them.)

Just a follow up to your 95 percentile rule, there is a famous story of Google exploiting this (in the early days before they were flush with money) in order to transfer their data to a new data center on the opposite coast. http://www.dodgycoder.net/2013/02/googles-fiber-leeching-cap...

> "On a more evil side, this would also stop chord [sic] cutters. Pirating content is no longer 'free', and Netflix would cost significantly more than $10/month ($10/month + 'x'GB * $/GB)."

Maybe you've been living under a rock, but ISPs who are also cable television providers are very interested in caps, arguably to protect their cable television business. [1] http://www.pcworld.com/article/2155286/comcast-exec-says-ban...

This whole debate about who's supposed to pay for peering is smoke and mirrors. The truth is that cable companies have a conflict of interest between their two businesses, and they're attacking the internet side to protect their cable tv business. End of story.

I don't think the cable companies have much of a side. I think a large part of the problem is complacency about improving service on the cable companies' side rather than active malfeasance: they simply don't have to work very hard to retain customers since the local markets are monopolies or small, stable, oligopolies.

There just needs to be some more competition to hold their feet to the fire.