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0 pointsAnthonyMouse6y ago0 comments

Most other utilities have cost structures that scale with actual consumption rather than capacity.

If you use more water, even if there is plenty of delivery capacity, they could literally run out of it. There is only so much in the reservoir.

If you use more electricity, even if there is plenty of transmission capacity, they have to burn more fuel to generate it.

Transferring more bits doesn't risk depleting the supply of bits and doesn't require burning more fuel. The worst it can do is consume all of the available transmission capacity. But the amortized cost of a bit is very low -- if you charged true cost then it wouldn't meaningfully deter usage, so you'd still need about the same total amount of transmission capacity. At which point charging for usage serves no legitimate purpose.

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nradov6y ago

ISPs have cost structures that scale with actual usage. Cables and routers have a fixed maximum capacity. Within that capacity each marginal bit is virtually free, but as traffic increases they eventually they have to pay for hardware upgrades. Cisco doesn't give routers away for free.

Legitimacy or lack thereof is irrelevant when setting prices.

AnthonyMouseOP6y ago

> ISPs have cost structures that scale with actual usage. Cables and routers have a fixed maximum capacity.

In other words, they don't scale with actual usage, they scale with maximum capacity.

When you take your monthly cable bill and divide it by what it pays for, almost all of it is going to things that don't scale with capacity. Having routers that are ten times faster doesn't require you to have ten times as many staff. They don't use ten times more electricity. They don't require ten times more office buildings or utility poles.

If you take the cost of the capacity upgrade and amortize it over total usage during peak hours, it adds a couple of bucks to the bill for the people who use the most. But that's not enough to deter usage by so much that you don't need the capacity upgrade. You need the capacity upgrade whether you charge per bit or not. At which point the upgrade is a sunk cost and charging for usage is inefficiently discouraging use of a resource that is being paid for either way.

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