I am not a purist about open Internet or the idea that all plans must be unlimited data, but here are questions for the NSP/ISP industry (Network/Internet Service Providers).
Assumption 1: Internet service delivery is a little cheaper every year
Assumption 2: People are using more Internet data transfer every year
Conclusion 1: “Fair” service packages from NSP/ISPs will need to provide more data every year for roughly the same price. Think of this as Internet inflation indexing, as in a pension adjustment.
Question 1: Who will decide what the “base level” of data transfer represents an “average user” so that the ISPs can charge a premium for heavy users?
Question 2: How transparent will this process be? Will ISPs use a neutral third party to calibrate the “normal growth” of Internet usage?
Question 3: As users consume the Internet in new ways, who will decide what is normal and what is premium?
Question 4: Have the architects of the new plans any understanding of the long (very long) history surrounding the commodity-dollar concept and how the basket of goods used for the CPI is a problem area?
NSPs and ISPs need to introduce new packages having already thought through all of the above. They are in danger of misreading the market and causing their own demise. How? By creating attrition of heavy users to other providers and therefore creating a declining market for themselves. At first they will have a margin increase because heavy users will have left and service will be cheaper to provide. But attrition grows rapidly and alternative ISPs who welcome heavy users will become the new vanguard of the market.
I have heard proposals from MSOs (Cable ISPs) that propose a cap at 20GB per month and then charging $1 per GB thereafter.
Let’s see … I can burn a 4.77 GB DVD for about $0.25 and mail it to a friend for about $0.75. Therefore, the physical world costs $1 for slow delivery of about 5 GB. Tell me again why it costs $5 to download a 5 GB movie? The idea isn’t broken, but the numbers are. For an HD movie (about 10 GB), they will want to charge $10, plus the cost of the movie of course.
