Sunday, April 05, 2009


I'm posting this from my car!

My wife just pointed out -- as she drove and I blogged -- that it's entirely unusual that I'm sitting in the right seat blogging away. And that ain't all. Anybody in another car within Wi-Fi reception range could also be using the Wi-Fi signal coming from my Autonet Mobile Router. I should have a bumper sticker that says, "Follow me, I have Wi-Fi."

Woah, I just remembered I've got a one gig cap on my service. What if the guy using my service in the other car was watching video or engaging in a hi-def video interaction? Or uploading his entire Flickr library??? Somebody snarfing my signal could use my whole month's quota in one trip to Boston!

In a future post, I'll tell you more about why quotas stink. I think I already know what Brett Glass would say. I won't get those bumper stickers printed up right away.

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David, you might be surprised to hear that I happen to agree: quotas and overage charges do stink. They're an awkward pricing model that causes unpleasant surprises. They're the number one cause of consumer complaints about cell phone services, and they're at least as annoying for Internet service.

On the other hand, we can't expect service providers to lose money on every customer every month. So, we need to work out better business models.

One is to prohibit activities that sap very large amounts of bandwidth, such as P2P or the operation of video servers such as the Slingbox. (Many providers do this on residential connections, but allow users to upgrade to a commercial level of service where it is allowed.)

Another might be to impose a surcharge, perhaps on a per-video basis, that covers the extra cost of bandwidth. Unlike a cap and overage charge, this surcharge could be stated upfront and require you to click to accept it. Maybe it could even be done in such a way that the people who viewed videos through your roving access point entered their own payment information and covered the surcharge!

One problem, alas, is that "network neutrality" activists in DC are lobbying the FCC and Congress to limit the range of available business and pricing models. In particular, in the Comcast proceeding, they tried to get the FCC to prohibit a model that involved transparent throttling and prioritization rather than a surcharge, leading many providers to believe that they had no choice but to impose caps and surcharges. (You may note that it was only after the Comcast decision that caps and surcharges began to appear on non-mobile services.)

In any event, the point is that there ain't no such thing as a free lunch. Bandwidth and RF spectrum are both expensive, and providers of Internet service aren't charities. It's not unreasonable for them to ask to be paid enough to break even on their services. The best thing we can do is encourage them to experiment with innovative business, pricing, and payment models until we interpolate on the ones that are best for everyone.
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