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June 15, 2008

Carr's Big Switch Exemplified by ISPs Going Metered Usage

  more bandwidth && more sandwich 
  Originally uploaded by EisFrei.

Given NYT's article on some of the major ISPs moving to a metered usage fee model, this matches Nick Carr's premise in his newest book, The Big Switch (at bar/lounge right now reading it), that the IT & bandwidth model is going the way of electricity. What Carr points out is that electricity has a positive feedback loop, the more you made it available, the more of people used-- this wasn't the thinking of many analysts & ISPs back in the Dot Com Bubble who didn't think the fiber being laid everywhere would ever be used (e.g. Level 3 who almost went under with the Dot Com Crash but seems to be sitting pretty).

What's spurring the ISPs current push for metered usage?

It's to make more money but what's driving the decision, is it because:

  1. Demand is truly outstripping supply or
  2. Is it to combat the power users who unbalance the price equilibrium that used to exist between average users using slightly less bandwidth and the minority power users who used slightly more bandwidth?

If we move past that point, the more important question is will we as consumers except the metered usage idea?

Of course the bloggers and techies will protest but will the average user notice or care? They won't care unless they start seeing exceptional high bills-- and that will happen, per Carr's premise that if you give them bandwidth (and Web2.0 is guzzling up more and more) they will want more bandwidth, then average consumers will eventually complain unless the usage fees are scaled correctly as bandwidth use for average users increases.

And this last point is exactly why Net Neutrality is so important-- bandwidth shouldn't be a scarce resource (this doesn't  preclude software & web engineers from designing w/ scarcity or constraints in mind-- see 37 Signals) that ISPs and current internet heavyweights wield to curtail the next generation of web entrepreneurs, companies, and ideas.

Also, research shows that even the idea of costs, either in the form of carrots or sticks, has a pyschological impact on people and changes people's behaivors quite easily.


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