To be painstakingly clear – I do not advocate a socialist view of broadband. We do not need centrally controlled broadband designed to be equal benefit to all (I assume that is the version of socialism you are referencing). What we need is metered bandwidth offerings that are run by organizations focused on capitalism and efficient operations.

This is basically the metered bandwidth argument from the service providers:
1) p2p and video are crushing our networks
2) we need to buildout our networks to handle the crush
3) to fund this buildout we are going to metered bandwidth to extract more money from p2p and video users

The problem is that they have set the meter far too low to extract a disproportional amount of money from consumers (we’ll all end up paying about 20X per byte delivered based on today’s prices). 5GB is a ridiculously low number and it is around for one specific purpose – to generate revenues to support their over-inflated organizations.

From my point of view, this is not a TCP vs UDP vs RTSP protocol problem, not a conservation vs usage problem, but an problem in the operational efficiencies of the large service providers. They absolutely need to normalize their operations staffs (spend one day inside a large operator and ask operations folks what they do) and work on faster processes to deploy new technologies.

I predict that if the large service providers do implement metered bandwidth you will see CLECs will make a dramatic comeback offering better services to consumers based on newer technologies and more streamlined operations.

That should cause a market dynamic that is very capitalistic in nature – those with low margins and high operating costs will be pushed out of the market. Nothing socialistic about that at all.

And what’s up with this bogus 0.03% number? Don’t you know that 42.42% of all statistics are made up?

And as far as airbags go, the people who have been killed by them would disagree with Victor.

Not surprisngly most customers do not ask for the changes they need to benefit them. I don’t recall a big lobby of customers asking for anti-lock brakes or air-bags. Nonetheless they were added to vehicles, customers paid more to get them, and I think we can say — that is a good thing. I don’t think it’s necessary to ask customers if they want better performance of the broadband service. I’m sure that if polled, they will all say “yes.”

Obviously you’ve never visited Missouri ;-)

The point the report makes is that caps may make people question the need for broadband, or the higher speed tiers. For instance, I have the highest broadband tier for ATT DSL. I subscribed to the higher tier specifically to watch video. In fact, ATT sells this tier and the one lower specifically for watching video.

If ATT caps, which I agree with the report, really is unlikely, I would immediately a) look for a competitor; failing finding such, b) change my subscription to the lowest broadband speed.

Caps are counter-intuitive when the company already has tiered service, specifically in order to make it easier to use the service.

Like all MBA student, you must not have paid close attention in microecon class.

In industries with extremely high fixed cost and extremely low marginal costs (such as telecom), providers have large incentives towards encouraging higher levels of consumption.

For detailed explanation of this, see the infamous paper “Too Expensive to Meter” by U Minn’s Andrew Odlyzko: http://www.dtc.umn.edu/~odlyzko/doc/metering-expensive.pdf

It is not true that all suppliers of flat-rate services benefit when users minimize consumption — it depends on the underlying cost structure. Of course all you can eat buffets don’t want you to eat in large quantities, but the food service industry has substantial marginal costs, the exact opposite of the telecom and most other network markets.