Lurgen's Journal: Blame the ISPs

Here's an extended version of a post I made today, regarding who gets charged for unpredictable usage....

Half the problem here is that we bill for bandwidth in the wrong way. By billing on traffic, we open ourselves to exactly this sort of problem - it would be like billing for water consumption based on pressure (rather than volume).

In the case of network access, it makes far more sense to bill based on access - the size of the pipe, and if necessary the level it can burst to.

The reason ISPs bill per megabyte is so they can bill multiple customers for the same piece of infrastructure... and at the same time, over-subscribe that piece of infrastructure.

Comparing water and bytes is a rather foolish analogy that the ISP business has invested hugely into. Water is a tangible object, whereas bytes cost nothing to create. In most cases, the cost is in providing the infrastructure - once the gear is in place, it doesn't actually cost anything to send a byte of data down it!

Some would argue that we pay by the byte in order to fairly charge for usage - if this were so, then the providers would simply need to offer a range of access levels. Unfortunately for us, it's not in their best interests to do this.

Charging by access speed means that we suddenly introduce a higher quality of service (you can't sell what you don't have, unlike with the current cost-model). This also promotes higher usage, which in turn promotes growth - without growth, most ISP's will never pay off their initial investment.

Strangely enough, paying a fixed fee based on the size of your connection is where the whole thing started. Paying per byte is a relatively recent (several years, but still recent) concept, thought up by greedy providers who realised they can charge many customers for something that is essentially free.

Here's another pile of metaphors, aimed at explaining my position on this issue... you sell potatos at a market. How do you charge? Per potato. Why? Because each one costs money... they take up physical space in the ground, you have to cart them to market, and once you sell one its gone forever.

What about clothing stores - you sell the tangible assets within the store (jeans, shirts, etc), but do you bill the customer for walking past and seeing your stock in the window? Not normally... why? Because regardless of how many people walk past that window, the only cost to you is the electricity required to light it. That electricity cost doesn't fluctuate based on viewing levels.

You go to a hardware store and buy a hammer. Do you get charged based on how many nails you hit with it, or for the hammer itself? Will a bigger hammer cost more?

My point is this: some things need to be charged one way (potatos vs hammers), others in other ways. Generally, things that are used to DO something are charged for the thing itself, not for the amount of use it might get.

Or how about this - are bytes a consumable? Is there an effort required to produce one? Perhaps we should require our ISP to demonstrate the cost to them of data traffic - would it really cost them any less to have an idle network?

Take a look at the profit levels of some of the bigger providers in your country. Here in Australia, Telstra, Optus and Connect all report multi-million (and in many cases billion) dollar profits. Nobody can tell me that the core connectivity of the Internet isn't currently a profitable business.

Finally, there's the subject of double-billing. Upstream and downstream traffic being billed. I could write for hours on this particular injustice, but let's just consider this for a moment - you get hammered by a worm or hacker, and who gets the bill? The same data passes through the hackers network, generating charges for them. It then turns up at your front door, costing you a fortune too. Both people pay (usually, the hacker gets some poor schmuck to cover the costs though). Worse still, when the connections originate from the same providers networks, they still get charged twice.

Aussie ISPs are notorious for this... you suscribe to Telstra, and download a file via a peer-to-peer client from another Telstra user. You get charged for the downstream traffic - almost understandable. But the sender gets charged the same amount of money for their upstream traffic! Does this mean that it costs Telstra more to transfer data around their internal network than it does to transfer from overseas? Or are they just gouging the customers...

I hate the current ISP market. It's the snake-oil of the 21st century. In 20 years, I hope we look back in disgust at the business practices of these people. In the meantime, there's a huge gap in the market for a provider who is willing to bill their clients based on access, not usage.