Bandwidth caps

Metered internet might make sense if the allocation of bandwidth was a scarce commodity. It really doesn't, though: the marginal cost of transferring information is essentially nil. Instead, what a metered charge does do is affect latency and packet loss in the overall system, and no metered internet service promotes allocative efficiency for those qualities of internet access.

That companies are using "traffic shaping" to kill the effectiveness of certain services and claiming to meter internet usage like one might meter power or water is deeply troubling. My ISP sold me a service that they claim is "unlimited." However, by adding a surcharge for so-called overuse and not otherwise changing their fee structure, the company has essentially just magicked into existence a new source of revenue, without otherwise improving service quality. Since I am a very heavy internet user, running a home sftp server for my family among other things, this adds pain with no gain.

Even if it turns out that they didn't build the necessary infrastructure to fulfill their promise, I wouldn't mind if fees were raised along with a promised increase in service quality. Nor would I mind if everything went on a pure metered service, without the up-front fee - presumably, each marginal byte transferred would be cheaper - with some surcharge for infrastructure improvement. But neither is happening. Metered rates in Canada have clearly shown themselves to be designed to discourage use and increase shareholder value instead of to improve services. No wonder American companies are gung-ho about adopting this model - it's free money, with those few knowledgeable enough to defy the "common sense" comparison to electric meters shouted down by all the rest.

A company called Digiweb does this in Ireland.

Everyone gets a 150GB cap initially and as you approach it, they send you out a letter (you can also monitor usage per day and total usage on their website), then if you over the cap, you get a warning and another 20GB free.

If you do this more than twice they start charging you for the extra 20GB at 5 Euro per 20GB or something like that which isn't price gouging. If you refuse to pay that, you get throttled to dial up speeds until your usage falls under the cap again.

As they do this, peoples usage isn't crazy high so contention doesn't kick in as much and you usually get advertised speeds.

My parents have their DSL service and it is the best we have seen (under a company they bought called Smart Telecom), I used to have their Fixed Wireless service called Metro which had a much lower cap of 30GB at the time but fast enough speeds. The cap has gone up recently on it to compete with other services but if you go over on Metro, you get throttled to dial up speeds until you fall under usage caps again for you last 30 days of usage. It was a bit of a pain at 30GB but they had 5GB margin of error on it but I still hit it too much and had to change provider.

I think it is a pretty fair system as long as the caps are high enough as standard as it allows users to have flat rate service unless they need that bit extra on some months.

Oh and there is little fibre in Ireland which is why speeds are so crummy. UPC offer faster speeds and pretty much no caps in areas they can cover for a flat fee but Ireland doesn't have the high usage from services like Hulu or Netflix because they aren't available to Irish users :(

Taxing broadband usage will never fly. All it takes is one broadband media company to bring suit against internet service providers for limiting their market exposure, a suit that most assuredly WILL happen in the not too distant future.

As long as the cost of streaming media remains lower to the consumer than the cost of contract services, Netflix and others are the future of media entertainment. Taxing innovation in the name of corporate profits only lasts for so long.

Streaming video is an issue in an organization's network. People watch netflix at their desks & people share it on monitors. It's easy to cut it off but that may cause issue. Reducing bandwidth is desirable, particularly for people watching on a small monitor.

If you go over your cap you are penalized in some fashion. If you never use your allotted bandwidth do you receive a refund? Of course not. This bandwidth "management" phase is complete hogwash. It will pass, but in the meantime we have to deal with the hypocrisy.

Overused bandwidth? Go for a walk instead, send the kiddies out to play. Rent DVD's for free at your local library.

I read, and don't own a TV, but I hear enough complaints to know that the cable companies are thieves. Netflix is tough competition for them, and doing all movie-lovers a great service. I hope the regulators keep an eye on how charging by usage proceeds.

Why don't internet companies just set an increasing tariff where you pay for every GB and as you use more, each extra GB becomes progressively more expensive? Seems like an easy way to make a lot of money out of people streaming video.

Why don't internet companies just set an increasing tariff where you pay for every GB and as you use more, each extra GB becomes progressively more expensive? Seems like an easy way to make a lot of money out of people streaming video.

This could make sense.

You could also investigate the EyeTV netstream system we we have recently installed that streams satellite TV signals into the house LAN (wireless or otherwise). Then each PC/TV can also be a pvr - which achieves more or less the same effect without so much external demand.