A layman's guide to bandwidth pricing

Time Warner Cable backed down from the tiered pricing plan that we've talked about here a few times, but it's safe to say we haven't heard the end of the story yet.

One of the problems we face is public education. To a layman, TWC's claims sounded logical: people who use the internet more should pay more. And that might be true if TWC had a huge tank of bandwidth that they dished out according to demand, but of course that isn't how it works. Their infrastructure cost is based on capacity, not quantity.

So it was heartening to see The New York Times cover this topic, laying out the figures so that any non-technical reader can understand the issue. And hey, there are some nice data points for techies, too. Did you know that, according to Comcast, it costs them just $6.85/home to double the internet capacity of a neighborhood? Or that in Japan, 160 megabit service costs the equivalent of $60/month (for comparison, basic broadband internet service in the US is measured in single digit megabit speeds and generally costs $30-$40/month, depending on provider).

The money paragraph, though, is this one:

If all Time Warner customers decided one day not to check their e-mail or download a single movie, the company’s costs would be no different than on a day when every customer was glued to the screen watching one YouTube video after another.

It's definitely worthwhile reading through the article and passing it along to your less tech savvy friends who might be confused by TWC's spin, because it is very likely that we haven't seen the last of the big ISPs attempting to squeeze more cash out of their customers. An educated public is the best defense against them getting away with it.

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