[ NNSquad ] Re: NYT: Differing views on Time Warner'sBandwidth Cap Experiment

[Rahul Tongia <tongia@cmu.edu>]

Let me re-phrase and clarify an unanswered question:

In theory, how much NON zero-sum-game savings are possible through 
different schemes (congestion pricing, per-bit charges, even throttling, 
etc.)? Naturally, answering this depends on assumptions of behavior, 
elasticity, etc. but reasonable order of magnitude estimates can be 
enlightening.  Of course, twists include issues of competition and 
provider-switching (instead of just application or usage modification).

Let me ask people out there, what sort of re-distributions of rates 
would be acceptable - if a new system (which I'm not advocating, just 
hypothesizing) gave, say, 80% of users a measurable savings (and 
improved quality) and 20% of users higher fees, is that desirable? 
90:10%? 99:1%? Who decides (and how)? I am skeptical of "market" systems 
since we don't have a competitive market at play.

Rahul

[note, I am not making any normative statements over SHOULD vs IS on 
zero-sum-pricing, and I am not silly enough to ignore corporate 
incentives for profit-maximizing, or that nothing will make bare-bones 
broadband in the US as cheap as that in India]

> In the US companies have a fiduciary responsibility to make as much money as
> they can for their stockholders.  If you think Time Warner, or any ISP, will
> reduce the price for Internet access for the "average Joe" who uses minimal
> bandwidth to something that is comparable to India (even with exchange rates
> and cost of living calculations included) you are mistaken.  The ONLY reason
> why Time Warner is doing this is because it is a chance for them to make
> more money.
>
> You can have your opinion of what SHOULD and should not happen, but
> realistically this is not how business in the US works.  Especially not in
> the telephone / cable / DSL markets.  I have no special knowledge of this,
> it is common knowledge.