Verizon CTO Endorses Metered Broadband, Which Should Allay Net Neutrality Concerns

by on September 29, 2009 · 10 comments

Stacey Higginbotham at GigaOm conducted a great interview with Verizon CTO Dick Lynch, in which he endorsed broadband metering:

We believe that you have to be allowed to have a level of service that is not on a public Internet. What you’re suggesting is different kind of IP service that’s not delivered over the public Internet and that needs to be part of the option set in the argument.

Such metering, if allowed by Washington, might lessen the need for some of the network management practices that so incense net neutrality fanatics.  So I’d really like to see Verizon and other ISPs explore using a “Ramsey two-part tariff,” as Adam has suggested again and again:

A two-part tariff (or price) would involve a flat fee for service up to a certain level and then a per-unit / metered fee over a certain level.

I don’t know where the demarcation should be in terms of where the flat rate ends and the metering begins; that’s for market experimentation to sort out. But the clear advantage of this solution is that it preserves flat-rate, all-you-can-eat pricing for casual to moderate bandwidth users and only resorts to less popular metering pricing strategies when the usage is “excessive,” however that is defined.

ISPs would have an incentive to set the demarcation to a point where, roughly, the vast majority of users would never have to worry about their usage, but the small percentage of bandwidth hogs would have a real disincentive to cut back on bandwidth use—thus avoiding the “Tragedy of the Commons,” which is really the “Tragedy of the Unmetered Commons,” as I noted a year ago.

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