Congressman drafting bill to ban metered bandwidth billing

ISPs will increase flat-rate bandwidth prices if they can't impose metered pricing because they have to cover the added cost of providing more bandwidth.

Bandwidth has historically been cheap because it relies upon shared costs and trying to keep the pipe efficiently full without over-filling (congestion) or under-filling it (higher cost per user). You use a little of the pipe, I use a little of the pipe, and Jane Doe uses a little. If we each consume 1/3 of the pipe, we each pay 1/3 of the cost of the pipe. It's called "statistical multiplexing" and it works because users only consume a small percentage of the bandwidth available to them. If Jane Doe doubles her usage and you and I keep our usage the same, the pipe isn't big enough any more. The service provider incurs a cost to add more capacity. Either Jane pays more because she's using twice as much (the Time Warner / Comcast pricing model), or we all continue to pay the same amount and you and I are subsidizing Jane's consumption. Are you willing to pay more so Jane can use more?

Managing bandwidth, water flow, electricity flow, or vehicle traffic all rely on statistical multiplexing to work efficiently. We're accustomed to paying metered usage for water and electricity, and we're accustomed to driving at different speeds depending on traffic. But we're not accustomed to usage-based pricing for bandwidth (or phone service for that matter) in the US because we have always depended on statistical multiplexing to share the cost of providing the service AND we have never had anything disruptive to dramatically increase consumption to a point where the ratio of users to the pipe has been radically altered (except for way back in 1996 when AOL introduced flat rate pricing for dial-up Internet access and every phone network and ISP network crashed to it's knees with the explosion in demand). Over the past few years, the wholesale cost of bandwidth has generally decreased at a rate greater than the rising demand, so prices have either remained flat or decreased somewhat. However, with the exponential growth in bandwidth demand due to online video, peer-to-peer traffic, and online gaming, demand is far out-pacing reductions in wholesale bandwidth cost. So prices must (and will) rise to pay for the increased capacity. Who will pay for it? You and I will whether it's through metered usage or higher flat-rate pricing. There is no "something for nothing" scenario.

So this summer when your neighbor installs a 75-ton air conditioning unit and consumes 20 Gigawatt-hours of electricity, are you willing to pay the same amount as he does each month to subsidize his Arctic interior, or are you willing to deal with the brownout? Tonight when you get on the highway to drive home from work in rush hour, consider whether you're willing to share the road and drive at or below the speed limit along with everyone else, or are you willing to pay for your own private HOV lane to your house?

It's the same scenario.

It would be so nice if this would go through. I think consumption based billing is a horrible idea!