Sunday, 5 June 2011

Usage based billing, the common sense approach

Usage based billing, quite a hot topic in Canada, in fact, it was one of the election items that parties had to look at (if not act on).

I'll take the unpopular route for a techie and say usage based billing should be here, but the caps that the bigger ISP's are providing are nothing short of ridiculous.  If you've found this page through a search, I'd imagine you're already familiar with the issues around user based billing.

To start off with, yes, bandwidth isn't a natural resource that's mined or an item built in a factory somewhere.  But on the end of the ISP's you do have to pay for backbone access, enterprise level switches and routers, and enough redundancy to ensure that heavy usage by a person or group of people doesn't bog down the whole network.  To add to that housing the newer (and usually more) equipment drives up electricity costs.  Add to that more employees that are required to install and maintain that system translates into more cost, and then it's understandable that companies want to charge more.

The downside of usage based billing are companies that start charging you after 25 gigs of data.  That seems ludicrous as in today's digital world that could be a day in a draftperson's office, a half a day in an advertising company.  Or a few movie nights with the family plus a couple of teenagers using youtube in a month.

So while a cap does make sense to some extent, I do not see the need for the caps to be as low as they are.  Another thought I have is that most of the ISP's that are pro-cap tend to be the ones that are already providing television services, and this in effect hampers tv efforts by companies such as netflix, and pay per view youtube (it's in the works) who want a slice of that market.  It would be extremely unlikely that an exec hasn't done a cost/benefit analysis on the cost of eroding tv services and wanted to add a cap given that reason, IPTV a new and credible threat and they'd be foolish to ignore it.

In this whole scenario there are people who want everything for the cost of nothing vs ISP's that want to nickle and dime everyone and choke off all competition for newcomers.  Both of the parties are heavily motivated by greed, and in my opinion neither side will ever get what they're looking for.  As far as middle of the road companies go, I imagine that they'll see some short term losses but flourish in the long run, and isn't that what we all want?  Some sort of fairness.

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