Internet economics 101: "bandwidth hogs" considered harmless

It seems to me that if the internet really is becoming a utility, we should maybe not relive the past mistakes of power / water / gas / telephone companies by allowing these folks to ignore infrastructure in lieu of profit, but heck, since when was infrastructure important?

Our highways are fine, our water systems pure, and the electrical grid certainly isn’t in danger of being brought down by script kiddies on a lark…

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The two or three that dominate the market for the most part are big enough for this to apply. Just because Joe Schmo Internet Company servicing 10,000 people isn’t getting free peering, we’re going to have to base policy on what affects most subscribers, not the most ISPs.

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That’s great for those 2 or 3, but this article discusses capping for all ISPs, and acts like any ISP that consumers would consider major has peering agreements that completely negate all upstream bandwidth costs. This is despite citing that TWC actually does have bandwidth costs too:

But this growth doesn’t translate into higher bandwidth costs for the
company; in fact, bandwidth costs have dropped. TWC spent $164 million
on data contracts in 2007, but only $132 million in 2009.

That passage makes a compelling argument that bandwidth caps are too small, and that TWC’s current customer base would allow it to absorb the cost of its bandwidth hogs using the subscription fees of low data users, but TWC is a huge ISP - smaller ISPs (even if those ISPs are still big) will have higher costs per unit of data and fewer users to absorb the costs of heavy users. There are other arguments as well, such as local infrastructure limitations, but those are amenable to upgrades so I don’t think ISPs deserve defense there. Also, as much as the article as described does feature some misleading information, don’t get me wrong here, bandwidth caps for US ISPs are absolutely unnecessary, since the ISPs with caps only offer plans with smaller caps than readily available in Australia (with even worse Internet and a far worse market structure for ISPs) and they already can differentiate plans and limit overuse through speed tiers.

Of course it is. It’s exactly what most of us do when purchasing anything. Look for the cheapest good/service that has all the qualities we require. I’ve been outsourced 1 or 2 times (depending on how you look at it), and I suspect it will happen at least once more in my career. But it’s hard for me to get that outraged (upset, yes, outraged, no) over my employers doing exactly the same thing I do without feeling like a total hypocrite.

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