michaeln:1080p:
I cannot see a reason that unlimited or at the very least extremely capacious plans are unfeasible.
The two are not at all the same thing. I would very much like the cost to come down/caps to increase, but 'unlimited' has some problems, to wit:
I didn't say they were the same. I think for all but a few users, however, 1TB per month and unlimited would be close to one and the same.
michaeln: ~ mathematical distribution discussion ~
The problem is much simpler than you make it seem. There is no normal distribution of internet usage as you have stated and this actually works in favour of the ISPs. According to Cisco the 'average' amount of data consumed per month across the globe is close to 15GB per month: javascript:mctmp(0);
This means that the majority of customers are using a very small amount of data per month and in most cases paying much more than they should for the service consumed.
What happens is that most ISPs simply have to provision enough bandwidth to service their peak usage period and make that profitable from their customer base. This leaves huge amounts of unused bandwidth during the aptly named off peak periods.
So the situation is as you have stated but in reverse. Most customers are subsidising the ISP already by underusing their internet connections. Consider that the '1TB per month pirate' only uses the 'average' monthly connection of 66 customers and when you have an average base of customers using much less than 15GB per month the math will average out nicely if you ensure a good ratio of customers using small amounts of bandwidth to those using more.
You only run into issues when the heavy bandwidth users make use of the available bandwidth during peak times. Otherwise the ISP could care less if they were leeching all night as most of their customer base is asleep or at work.
michaeln: Of course, the usage pattern would change. At the moment, even the heaviest users are still constrained by cost. That constraint would vanish and they would use even more. At the moment the average users are also constrained by cost. They would certainly feel justified in using more, given that their usage was now unconstrained and that their charges had gone up. That would inevitably lead to higher usage, leading to higher costs to the ISP, with no concomitant revenue. The result would of course be further price rises.
The first part of your claim is true but the second does not follow and has been shown to not be so elsewhere. The solution for ISPs is to charge accordingly. Most users will not make full usage of their connections, a small minority will always want to push the limits. Allow for both and charge for the service.
A simple answer to me would be to offer a set of base plans like this:
Regular Usage (the majority of customers, usage during peak times mainly so bandwisth priorotised for this pool during that time otherwise equal to other traffic during off peak)
- 25GB
- 50GB
Gaming (require a low jitter connection, value a lack of congestion over data consumption)
- 80GB (guaranteed bandwidth pool 24/7 for better ping etc..., at a premium)
Heavy Usage (leeches, torrenters, other heavy usage, regular priorotisation, makes use of bandwidth when available)
- 250GB
- 500GB
- Unlimited
The heavy usage plans will all be priced differently but the key here is to maintain a ratio. You need a system to ensure that your percentage of 'unlimited' users do not saturate your base of regular customers. If you reach the maximum number of sustainable 'unlimited' users then the option needs to be removed from your sales page. The same would apply for the 250 & 500GB plans as well as, to a lesser extent, the gaming plan.
Making this idea known to to your customers will make you very popular I would think. This is the kind of transparent business that lands you with a loyal customer base.
michaeln: This contention for a common resource pool is exactly the classic “Tragedy of the Commons”, where game theory predicts that pursuing the most rational individual strategy inevitably leads to destruction of the resource and a loss for all concerned.
With a policy of transparency to your customer base and sticking to a ratio of customers this will never happen.
michaeln: Usage charging. Usage charging/data caps has the following desirable characteristics:
- It matches costs
- It is easy to do
Simplicity here results in low cost, compared to complex methods which result in the customer paying largely for the privilege of being sent a bill.
You forgot to add that it creates a commodity where one does not exist (data); instead customers should know that what they are paying for is contention. I also think that using a ratio system would be much easier than calculating data usage per customer.
michaeln: The fundamental driver behind the success of the Internet is that all power and innovation comes from the edge. The Internet is not driven by the carriers deciding what services to sell, but by end-users creating innovative new services to be carried on the Internet.
Volume charging doesn’t care what is carried, so there is zero incentive for the carrier to prefer one sort of traffic to another and hence to try to control what its customers use the Internet for.
I would argue that volume billing does care what is carried, specifically, large volumes of data. This can be seen in the trend to zero rate certain websites over others. This does not look like an incentive not to care what data is carried, does it?
My point here is that an unlimited volume of traffic is not something that cannot be done, it simply needs someone with the ability to think outside the box.
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