Re: Pay-As-You-Use High-Speed Internet?

[Steve Gibbard <scg () gibbard org>]

For an idea to catch on, it often helps for there to be a clear benefit to
doing things the new way rather than the old way (or at least, it needs
some good marketing...).

In this case, it's not clear to me where the benefit is.  A lot of the
cost of residential connections is in support, and in the cost of the
physical connection, whether it's used or not.  From the ISP's
perspective, even if the average customer's use were to drop considerably,
it probably wouldn't lead to a huge reduction in their costs, so they
wouldn't be able to lower the base price of an unused circuit much below
what it already is.  While it might be nice to be able to get more than
they're currently getting from customers who are heavy users, the heavy
users would be unlikely to pay more, given that they could get service for
the same flat rate from the ISP's competitors.

> From the end users' perspective, we've got pretty much the same story.
They're unlikely to save more than a few dollars if they don't use the
connection at all, and they'll have to pay more if they do.  What's in it
for them?  If the end user is already paying the $30-50/month you suggest
that they would pay for the loop, then they're currently getting the
bandwidth for free.  Why would they want to start paying more?

The situation for users of much bigger connections, where we're talking
bills of thousands or tens of thousands of dollars per month, instead of
$30-50, is quite different.  Metro ethernet and OC-whatever connections
generally are billed at 95th percentile utilization, which is a form of
pay as you use.

-Steve

On Fri, 14 May 2004, Jonathan M. Slivko wrote:

> Also, you could also take the approach of wiring a whole building for
> Internet connectivity through that model, like Intellispace does.
>
> -- Jonathan
>
> Daniel Senie wrote:
>
> > At 05:22 PM 5/14/2004, you wrote:
> >
> > > Hello Fellow NANOG'ers,
> > >
> > > I was just thinking about this - tell me if it sounds reasonable? The
> > > company that I work for developed a piece of technology which, through
> > > rate-limit statements, allow customers to buy/sell bandwidth "on
> > > demand". Now, I was thinking: "Why can't we take this technology that
> > > we've tested successfully in a colo environment and adapt it a little
> > > bit for personal/buisness-class ISP's to allow them to bill for the
> > > bandwidth that a customer uses, and only that with the exception of a
> > > base monthly fee (to cover the DSL/T1 loop, e-mail services, support,
> > > etc.) of a few dollars.
> >
> >
> > The access line (T-1, etc.) loop charge is substantially larger than the
> > bandwidth charge. Get the phone companies to price the lines better, and
> > it might make sense.
> >
> >
> > > Personally, I would like to see a senario where everyone just pays for
> > > what they use - it would be a much better system for allowing people
> > > who don't neccessarily need to get on the Internet at high-speed, get
> > > on high-speed which will not only increase revenue for the ISP's, but
> > > also for the customer who can now use DSL/T1 access in a much more
> > > effective way.
> > >
> > > Questions? Comments? Suggestions?
> > >
> > > -- Jonathan
> > >
> > > --
> > > Jonathan M. Slivko
> > > Network Operations Center
> > > Invisible Hand Networks, Inc.
> > > help () invisiblehand net
> > > 1-866-MERKATO (USA)
> > > 1-812-355-5908 (Intl)
> > > <http://www.invisiblehand.net>
>
> --
> Jonathan M. Slivko
> Network Operations Center
> Invisible Hand Networks, Inc.
> help () invisiblehand net
> 1-866-MERKATO (USA)
> 1-812-355-5908 (Intl)
> <http://www.invisiblehand.net>

--------------------------------------------------------------------------------
Steve Gibbard                           scg () gibbard org
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