> Hey, wait, I have a solution! How about you charge for the actual bandwidth in megabits per second, instead of for some arbitrary number of gigabytes per month? ... Then everybody's happy, right?
You CAN buy bandwidth that way. I do. It's exactly the opposite of what you want for your home internet connection. Those connections are called T1, T3, DS1, DS3, and you may remember ISDN. That's exactly how to make you UNhappy.
At home, you want to load a Slashdot, have it load in less than a second, then spend 300 seconds reading it. Then you go get a snack for another 300 seconds. You do that for a few hours, then go to bed. The next day, you go to work, then come home and use the internet. You'll use it for a few seconds at a time, for a couple of hours. You do NOT want to sit there and wait for stuff to load - you want the connection to be much, much faster than what you're actually using each hour.
You want a very fast connection, maybe 20-100 Mbps, but you're only downloading 1GB per day, which means you're actually using the connection 0.1% of the time. 99.9% of the time, you're not actually using it. Even you you did 300 GB / month, that 100 Mbps connection would sit idle 99% of the time.
It's good that you don't actually want to use it 99% of the time because a full-transit connection from your home through to the internet costs about $10-$25 per mbps. A full transit 100 Mbps line, about $1,200 / month, depending on location. The great news is, because you're using it less than 1% of the time, you can SHARE it with your neighbors and split the cost. If you each use it 1% of the time or so, 30 neighbors can all share that $1,200/month bill, paying $40 each. THAT is what you want for home internet service.
That's the basic reason why your cable modem at 35 Mbps is SO much cheaper than the 35 Mbps serving your office. Your office likely doesn't share the bandwidth with other companies, and doesn't share the cost. They get the full 35 Mbps 24/7 and pay the full $500 / month.
Sharing a fast connection is awesome, you save tons of money, but one problem arises. One of your neighbors sets up a server and hosts web sites for three or four of his friends, then another neighbor leaves Netflix streaming 24/7 in two different rooms, when he's not even home. That's quite wasteful, but what does he care, he's only paying a tiny fraction of the cost. You get less of the shared bandwidth because dumbass is streaming HD video to an empty living room.
There is no perfect solution to that, but about the best solution we have are caps. Unfortunately ISPs haven't been clear about what the caps are for different pricing tiers. Most consumers probably don't know how many GBs they want, so that's part of the problem. I think the best might be if the major ISPs offered three plans:
Light use economy plan.
Standard plan - perfect for daily browsing with some Youtube.
Power user / HD video plan - for people who watch a lot of Netflix.
Each plan should a little bit higher usage allowance than it's name suggests, so almost everyone people who doesn't use IP video or torrent regularly will be happy with the medium sized plan. That way everyone is paying for their fair share of the shared connection, and everyone is getting what they pay for. That would make customers happy.
Selling you 45 Mbps of dedicated, guaranteed bandwidth on a T3 line for $800 would make CenturyLink happy, but it wouldn't make you very happy. You'd rather share the cost, and the capacity.