If consumers were aware of the amount of the subsidies they might be paying, would they be as opposed to paying for the bandwidth they actually use as is generally believed?

It would not be enough for consumers to be aware of the subsidies, they would also have to be convinced that their price would be reduced by an amount equivalent to their subsidy - should metered pricing be implemented on a from-the-first-byte basis.

I doubt any broadband providers would be willing to price service from the first byte (where 0 bytes per month would cost $0.00). If providers implemented some sort of base service charge that included no usage or some limited usage, consumers would likely still just prefer a flat rate charge.

At least one major broadband provider has stated that the average residential broadband customer utilities 1-3 GB of data transfer per month, and that very few customers exceed the undefined excessive use threshold. Would broadband providers really want to drastically reduce the monthly charge for the vast majority of their customers just to be able to increase the monthly charge to those very few that transfer high amounts of data? Especially if the high volume users (and possibly everyone else) would likely curb their usage?

Per byte pricing would kill off IPTV business models, and exploration on the net in general. If Amazon has priced a video rental download at 99 cents, but the potential customer has to stop and think about what the data transfer will cost - they will probably just not bother - before they have even finished crunching the numbers.

If consumers were aware of the amount of the subsidies they might be paying, would they be as opposed to paying for the bandwidth they actually use as is generally believed?

It would not be enough for consumers to be aware of the subsidies, they would also have to be convinced that their price would be reduced by an amount equivalent to their subsidy - should metered pricing be implemented on a from-the-first-byte basis.

I doubt any broadband providers would be willing to price service from the first byte (where 0 bytes per month would cost $0.00). If providers implemented some sort of base service charge that included no usage or some limited usage, consumers would likely still just prefer a flat rate charge.

At least one major broadband provider has stated that the average residential broadband customer utilities 1-3 GB of data transfer per month, and that very few customers exceed the undefined excessive use threshold. Would broadband providers really want to drastically reduce the monthly charge for the vast majority of their customers just to be able to increase the monthly charge to those very few that transfer high amounts of data? Especially if the high volume users (and possibly everyone else) would likely curb their usage?

Per byte pricing would kill off IPTV business models, and exploration on the net in general. If Amazon has priced a video rental download at 99 cents, but the potential customer has to stop and think about what the data transfer will cost - they will probably just not bother - before they have even finished crunching the numbers.

Something doesn’t add up here. I know that technically we are talking about two different distribution schemes here, but in economic terms the two examples are not all that dissimilar.

Something doesn’t add up here. I know that technically we are talking about two different distribution schemes here, but in economic terms the two examples are not all that dissimilar.

I’m not sure you understood the subject of my post. The first sentence is essentially the thesis. It has little to do with file-sharing (a significant porition of which is not illegal) nor high bandwidth usage in general (much of which is not ‘file-sharing’ in the conventional sense, c.f. Youtube).

Maybe you can lay out your point more explicitly.

I’m not sure you understood the subject of my post. The first sentence is essentially the thesis. It has little to do with file-sharing (a significant porition of which is not illegal) nor high bandwidth usage in general (much of which is not ‘file-sharing’ in the conventional sense, c.f. Youtube).

Maybe you can lay out your point more explicitly.

“[File-sharers] are not merely covering their costs but maximizing [music collections]. They will [download] as high a rate as possible to achieve this. Without any meaningful [accountability] and given that [ISPs] are willing to [charge] current rates, why would they reduce their [downloads]? Out of the goodness of their hearts?”

It works both ways, you see.

“[File-sharers] are not merely covering their costs but maximizing [music collections]. They will [download] as high a rate as possible to achieve this. Without any meaningful [accountability] and given that [ISPs] are willing to [charge] current rates, why would they reduce their [downloads]? Out of the goodness of their hearts?”

It works both ways, you see.

One could argue that such a model would bring on new customers who were hitherto without broadband because of the cost, but the proposition that the end result would result in higher profits for the teleco would need to be supported. Moreover it is not a given that a signifcant proportion of existing customers would see any price decrease for their usage levels.

One could argue that such a model would bring on new customers who were hitherto without broadband because of the cost, but the proposition that the end result would result in higher profits for the teleco would need to be supported. Moreover it is not a given that a signifcant proportion of existing customers would see any price decrease for their usage levels.