Broadband

[Simon]

This might not be the right time to start another discussion on the workings of broadband and networks, but I was just daydreaming, and wondered if there's any reason why Broadband can't be treated like other commodities, such as Gas and Electricity, and made available unlimited for all, but on a basis that you pay for what you use?

Surely that would be a fairer system than it is now, as currently, low users tend to subsidise high users, in that a user who just browses the internet and sends a few emails, pays the same per month for, say a 100Gb allowance, as another user on the same tariff, who uses all of their allowance.

Would it not balance things out if users who wish to watch a lot of Netflix and play online games, paid more, as they are using more, and those that don't, paid less?  Would this also not make it easier for the providers of broadband to work out charges?

In the same way as one might ask what is electricity, what actually is "broadband" anyway?   

[Steve]

Interesting question, if you have an unlimited contract you don't have to spend money working out an individuals bill.

I think your correct in some regards that a low user within any given tariff will subsidise the high user within that tariff. However with that in mind if you pay for what you use we all may end up paying more.

[Simon]

It depends on the price point, I guess.  Who decides how much "Bandwidth", as a commodity, is worth?  It may bring prices down for the average user.  Above average users, like with anything else, may end up paying more, but they would have truly unlimited usage, according what what they can afford. 

Also, those companies providing faster, uncongested networks, would end up attracting heavier users, using more bandwidth, hence more revenue from those users. 

[Glenn]

Would there be a standing charge?

[Steve]

Obviously at present there is a standing charge which is the basic connection rental from BTw / Openreach

[Lance]

Interesting thought. Of course, pay per minute is how dial up used to be originally.

[Simon]

Indeed, the standing charge could be the line rental, if with BT, but this could perhaps be subsidised if you also had your phone line through the broadband provider.   

[Steve]

It's about time one could have a broadband connection without a separate landline charge, although I suspect the landline rentals subsidise the broadband in many cases.

[zappaDPJ]

I don't think it's possible to calculate a price point that would make it viable unless you introduced a sliding scale which puts you back to square one.

You would probably find it not worth taking on the lowest usage customers while the highest users, including businesses would not be able to afford the increases. I guess you could offset that to some extent with a large standing charge but that again brings you back to square one. The problem with shifting data is it's not really comparable to other utilities. If someone uses double or even treble the amount of water it's affordable but what would happen if they consumed a hundred times more?

[Simon]

But, why is shifting data, so much more expensive than shifting water?  Water is an actual physical substance, whereas data is just... well, that was one of my questions.  What actually is it?  Surely, someone, at some point, must have put a 'value' on the transfer of data.  Maybe it's that 'value' which needs challenging?

[zappaDPJ]

Well I guess that value is calculated from the amount it costs to shift it plus profit Whether or not it's more expensive than supplying water is debatable, my water bill costs a lot more than my data bill although if you take the land line and mobile phone charges into account it actually works out at about the same.

[Simon]

So, like with water and other commodities, would it not be fairer that the more you use, the more you pay?  After all, if next door had their heating on full, 24/7, and I only had mine on low in the evenings, I wouldn't expect to pay the same as the neighbours. 

[zappaDPJ]

The concept is sound but the huge differences in the amount of data shifted per user is still an issue. It would price business users off the net.

[Simon]

Unless there could be different rates for business and residential.  Do businesses pay the same as residents for gas and electric?

[Gary]

It would also price the poorer families off the net who use it too. Smartphone use would diminish putting manufacturers out of existence and causing huge lay offs in the job market. Gamers would not able to use consoles so console makers would go bust, small business users, councils and local government would be priced out as well. Energy providers costs using data in their computers would sky rocket so out gas and electric bills would rise, schools would not be able to afford computers and on it goes its totally unworkable as I see it because everywhere you look computers are used now pushing and downloading massive amounts data in our every day lives.

How do you price data fairly, how much per GB is fair? How do you take back effectively what you have already given? Companies that rely on end users downloading filsm etc would just go out of business, no more netflix, or love film, no sky on demand, no iPlayer catch up. Forums would vanish as people couldn't afford to be frivolous with their allotted amounts. You would in effect be creating a class system for who can and cant afford access to the internet.

[Simon]

That's assuming the cost of bandwidth stays as it is now though, Gary.  Surely, if bandwidth was unlimited for all, there would be more usage (especially with the advent of faster connections), and costs could fall?

[Gary]

That's assuming the cost of bandwidth stays as it is now though, Gary.  Surely, if bandwidth was unlimited for all, there would be more usage (especially with the advent of faster connections), and costs could fall?

Unlimited bandwidth is unworkable though, its already been said that even with the advent of fibre expansion provision is being out stripped by demand, Simon. Investment in the network would not be able to keep up and the whole thing if unlimited would eventually crawl to a halt, and we would be back to 56k modem speeds. You just cant create the infrastructure to give that many millions of users unlimited usage, so it has to be banded and capped and shaped, the system we have now shows what happens to unlimited providers who attract all you can eat users, they slow down. I don't think it's sustainable.  And on that note I'm not sustainable, bed is calling. Night

[colirv]

I think if changing the charging system to paying for what you use were to result in significant change to current usage, then current usage clearly bears no relationship to the costs of provision and the whole market is fundamentally skewed. That seems completely wrong to me. I'm all in favour of everyone, business and private, paying their fair share with no cross subsidy. I'm firmly with Simon.

And I really don't have the faintest idea what Gary's on about! Perhaps, Gary, you could explain just the first of your comments, for starters - "Smartphone use would diminish putting manufacturers out of existence and causing huge lay offs in the job market." Why would this happen?

[Gary]

I think if changing the charging system to paying for what you use were to result in significant change to current usage, then current usage clearly bears no relationship to the costs of provision and the whole market is fundamentally skewed. That seems completely wrong to me. I'm all in favour of everyone, business and private, paying their fair share with no cross subsidy. I'm firmly with Simon.

And I really don't have the faintest idea what Gary's on about! Perhaps, Gary, you could explain just the first of your comments, for starters - "Smartphone use would diminish putting manufacturers out of existence and causing huge lay offs in the job market." Why would this happen?

If People pay for data mobile data like cloud services are using it all the time, apps constantly in communication with other apps like whatsapp Skype etc there are hundreds if not thousands of such apps, so if you pay for every mb you use constantly people just wont use the damn things, they become expensive luxuries, so the market which is already in decline compared with 2012 and again in 2013 would have the bottom fall out of it. Apps wont get made smartphones would become dumb phones again, try downloading your music collection from the cloud if you have to pay though the nose for data!

Companies that make the things would see huge lay offs from the decrease in manufacturing as people stop buying them in the because people want bargains and tariffs with inclusive data not pay as you eat. As I have stated you are setting up a class divide with poor vs rich for internet use. I really cant believe you cant see that!

[Simon]

There would obviously have to be some distinction between home, business and mobile data rates.  I was initially coming at this purely from the perspective of the home broadband market.

[Technical Ben]

I don't think it's possible to calculate a price point that would make it viable unless you introduced a sliding scale which puts you back to square one.

You would probably find it not worth taking on the lowest usage customers while the highest users, including businesses would not be able to afford the increases. I guess you could offset that to some extent with a large standing charge but that again brings you back to square one. The problem with shifting data is it's not really comparable to other utilities. If someone uses double or even treble the amount of water it's affordable but what would happen if they consumed a hundred times more?

At a 100 times more, they DO get massive charges. Consumer electric prices for example do not reflect the business ones (AFFIK never dealt with them directly). So it's mainly consumers that get some strange or just really good deals at times. But then again, water/electric are considered necessities to consumers and not to businesses, so there is that.

We already do technically pay for what we use. It would not stop all mobile use. It never did when it was itemized for calls! 

It may have benefits and draw back, no system is perfect, but rarely is any system unworkable.

[colirv]

If People pay for data mobile data like cloud services are using it all the time, apps constantly in communication with other apps like whatsapp Skype etc there are hundreds if not thousands of such apps, so if you pay for every mb you use constantly people just wont use the damn things

My presumption is that there won't be extra money being charged for mobile data usage, just a redistribution of existing charges - as Technical Ben says. The per-Mb charges for mobile data will be minute and, on average, mobile users as a whole will pay no more for their data than they do now. There is no reason why they would, and every reason why they wouldn't.

[john]

There are some similarities between water provision and data in that they are both essentially free but we have to pay charges to cover the cost of implementing and maintaining the infrastruture.

However there is a finite amount of water available and the cost of processing for both its provision and return are perhaps more directly proportional to the quantity used than data.

Although it may work out cheaper I have elected not to have a water meter as I prefer not to have to worry about the usage and I know approximately in advance how much it will cost me for a year and can budget accordingly. However my friend was only telling me the other day that his elderly mother, who lives alone, has gone on a metered supply and is now terrified of using water unecessarily to the extent that she hardly uses any at all despite him telling her the cost is not great. My own mother is in a similar position with her telephone. She is on a low use tariff and rarely makes calls for fear of the cost. If all broadband was metered it would encourage two classes of users, those who could afford it and those who would be reluctant to use it in case they received a large bill. Even though the charge may not actually be that much many do not like the uncertainty of what it will be.

Whilst the broadband system could not cope with everyone taking full advantage of an unlimited allowance the present system does provide a driver for the telecom companies to increase capacity. If everyone was on a 'pay as you use' tarrif there would not be the same demand resulting in less incentive for them to improve the infrastructure and there would be additional costs involved in monitoring individual usage and an uncertainty on their income.

[Simon]

Fair points, John, but with regards low income households, as with everything else, one has to live within ones means, so I'm not sure why broadband provision should be any different to phone, electric, motor fuel, or any other commodity, in that respect. 

There would certainly be an element of expense in setting up individual billing, but once in place, those costs would diminish. 

With regards the broadband system coping with demand, I believe this would balance out between low and high users, and not everyone would be pushing the infrastructure to it's limits, as not everyone could afford to.  Further, investment in the future infrastructure, could be financed by the extra revenue from the high users, who would ultimately be paying more for the service.  As data is not a finite commodity, presumably, the infrastructure could grow almost indefinitely, according to demand. 

[Simon]

Just to take it a hypothetical step forward, what would be a reasonable cost, per Gb, regardless of speed or any standing charges?  50p?  20p?  That would certainly reduce my monthly bill, for my average 20Gb usage. 

[colirv]

The fairest and most efficient way of setting the fixed and variable elements of the charge would be to base them on the respective fixed and variable costs of providing the service.

Re the earlier topic, we went onto metered water not so much in the expectation that we'd save money (our bills in practice have proved similar) but because we believe in the principle of paying for what you use. I'd happily pay a per-GB charge for bandwidth.

[Technical Ben]

If People pay for data mobile data like cloud services are using it all the time, apps constantly in communication with other apps like whatsapp Skype etc there are hundreds if not thousands of such apps, so if you pay for every mb you use constantly people just wont use the damn things, they become expensive luxuries, so the market which is already in decline compared with 2012 and again in 2013 would have the bottom fall out of it. Apps wont get made smartphones would become dumb phones again, try downloading your music collection from the cloud if you have to pay though the nose for data!

Companies that make the things would see huge lay offs from the decrease in manufacturing as people stop buying them in the because people want bargains and tariffs with inclusive data not pay as you eat. As I have stated you are setting up a class divide with poor vs rich for internet use. I really cant believe you cant see that!

Your example of a water meter is spot on. As said. No system is perfect, and very few are necessities. Both metered and unmetered works best for different people when it comes to water. Neither a meter or unmetered gives a "best" result for all consumers. However, if everyone goes on a meter, then they pay for what they use, or decide to use less to pay the same. It does not cause a collapse or emergency, just a change in how people use it.

The same goes for bandwidth. Those programs do not often require a full cloud system, they can and sometimes do work as the old ones on dialup did (ICQ chat). Plus we do already pay for the exact data we use. Profit margins on top of that. This would just re-issue the bills proportionate to use, it would not increase the overall cost.

Also, this is not a hypothetical. We had it with dialup, though arguably on time, not bitrate. Some offered both a metered and an "unlimited" billing option. We had it with mobiles, and some still do. Both those systems still worked, and users still used it. Besides, no matter how much we save, we always want to use "more"... at lest I do when it comes to chocolate... 

PS, Sadly Simon, we have to look at the billing from the other end. Not what we are willing to pay, but what it actually costs. That's the key. Though our willingness drives demand, that changes costs to some extent, the underlying costs dictate a minimum price. The rest is just "profits" that can fluctuate from nothing to "unlimited".