Monday, May 30

Should broadband data hogs pay more? ISP economics say “no”

Don't be stingy guys.

It's Memorial Day, all Ars staff is off, and we're grateful for it (running a site remains tough work). But on a normal Monday, inevitably we'd continue to monitor the world of ISPs—especially how the major players handle big data users. Our Nate Anderson looked at the economic side of the decision in July 2010, and we're resurfacing his piece for your holiday reading pleasure.

Just over a year ago, Time Warner Cable rolled out an experiment in several cities: monthly data limits for Internet usage that ranged from 5GB to 40GB. Data costs money, and consumers would need to start paying their fair share; the experiment seemed to promise an end to the all-you-can-eat Internet buffet at which contented consumers had stuffed themselves for a decade. Food analogies were embraced by the company, with COO Landel Hobbs saying at the time, "When you go to lunch with a friend, do you split the bill in half if he gets the steak and you have a salad?"

In the middle of the controversy, TWC boss Glenn Britt told BusinessWeek something similar, though with less edible imagery. "We need a viable model to be able to support the infrastructure of the broadband business," he said. "We made a mistake early on by not defining our business based on the consumption dimension."

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