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Are You Buying More Than You Need?

Gizmodo has a very interesting piece today about consumer Internet connectivity in the USA from the major providers. In the post they point out how the broadband providers are overselling higher priced services to consumer by exaggerating what kind of pipe someone needs to download, connect or use services.

First off, we're beginning to see the strands of sending party pays billing taking hold. mask it as they want to, the ISPs are slowly moving to that kind of pricing model. Secondly, what we're seeing is the tiered pricing models that have been long written about online. The heavier user of fatter pipe is going to pay more on average per month than the occasional downloader, and that's really how the pricing is built today. The fuzzy logic being applied is if you're downloading one movie, you're downloading more. Hence you should pay more.

Currently we're not seeing any hybrid models, other than with mobile Pay As You Go Data, where you pay what you consume, and if your consumption patterns change, you can pay more (or less.)

This is where bandwidth speeds and access vs. download and upload by megabyte pricing is out of whack. As more and more moves to the cloud, consumption becomes thiner. As the ability to sideload becomes more readily available, costs to the user (and in reality the ISP) should drop as the on-net, non toll road traffic (your broadband ISP) is eliminated.

Sideloading is like FedEx, they get the data to you, but with less handling.

These broadband pricing models are flawed, but not only for the reasons Gizmodo cites, but because the whole way we are communicating now (far more cloud based, far less end point data intensive.) Yes, we're moving more data, but things like voice and even video conferencing are really small bundles compared to fat data like that which the operators move on a daily basis just to run their business. The whole model of Smart Grids and P2P technology are beginning to cross. Far more efficient ways for data to go from point a to point b are emerging. What's more, as more sits on the cloud, and as more of that is shared, there becomes less need to "download" and "upload" because the work product is sitting up there, not down here. Upload once. Work many.

When that model can be better embraced, using a toll or permission level model, then you have the right pricing schemes. Until then, we are all likely all dining at the buffet, not really getting an al a carte offering from any broadband provider.


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