{"id":4387,"date":"2011-02-10T06:03:52","date_gmt":"2011-02-10T11:03:52","guid":{"rendered":"http:\/\/mhgoldberg.com\/blog\/?p=4387"},"modified":"2011-02-21T16:42:48","modified_gmt":"2011-02-21T21:42:48","slug":"restricting-trade","status":"publish","type":"post","link":"https:\/\/mhgoldberg.com\/blog\/?p=4387","title":{"rendered":"Restricting trade"},"content":{"rendered":"

Columbia law professor Tim Wu doesn’t like usage based pricing for internet services. In his article in yesterday’s Globe and Mail<\/a>, he provides\u00a0a clever soundbite:\u00a0“A nation that spends its time worrying about bandwidth caps is not a nation that leads.”<\/p>\n

Different people do use the Internet in different amounts. And there are, in fact, perfectly reasonable ways to deal with variable demand. Operators can offer faster connections for those who want more and offer discount plans for light users. An ongoing bandwidth limit is much preferable to a monthly cap.<\/p><\/blockquote>\n

Implicit is a view that usage based billing should be banned. Professor Wu is credited with coining the term net neutrality<\/em> and he has recently been named as a senior advisor to the US Federal Trade Commission<\/a>. His perspectives on usage-based billing seem to be at odds with the US Federal Communications Commission. In its landmark Order on Net Neutrality issued late last year [pdf<\/a>, 1.0MB] the FCC wrote:<\/p>\n

prohibiting tiered or usage-based pricing and requiring all subscribers to pay the same amount for broadband service, regardless of the performance or usage of the service, would force lighter end users of the network to subsidize heavier end users. It would also foreclose practices that may appropriately align incentives to encourage efficient use of networks.<\/p><\/blockquote>\n

Professor Wu’s solution\u00a0restricts the types of offers that could be made to target light volume users or perhaps lower income broadband users. He says that budget offerings should only be low bandwidth, rather than restricting volume of use. I suppose dial-up service would be his idea of the ideal low-bandwidth budget offering.<\/p>\n

His proposal for a budget priced\u00a0product offering is one suggestion, but it isn’t the only one. And we should heed the warnings of the FCC before imposing any constraints on the flexibility of operators to develop commercial offers.<\/p>\n

It is difficult to understand how consumers can benefit from restrictions in the types of offers available to them.<\/p>\n

How can it possibly be in the interest of end-users to have only one price structure in the marketplace? Why would we say to someone seeking a low price internet solution that they should not even be able to consider trying out a high bandwidth application? Not every high bandwidth customer has a need for their applications the same way; shouldn’t we let the internet service providers develop their own market plans and let users make informed purchase decisions?<\/p>\n

Restricting light volume or low income internet users to dial-up speeds doesn’t sound very\u00a0reasonable to me. I don’t think we want the government restricting internet pricing models.<\/p>\n","protected":false},"excerpt":{"rendered":"

Columbia law professor Tim Wu doesn’t like usage based pricing for internet services. In his article in yesterday’s Globe and Mail, he provides\u00a0a clever soundbite:\u00a0“A nation that spends its time worrying about bandwidth caps is not a nation that leads.” Different people do use the Internet in different amounts. And there are, in fact, perfectly …<\/p>\n

Restricting trade<\/span> Read More »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","two_page_speed":[],"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4387","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nRestricting trade • Telecom Trends<\/title>\n<meta name=\"description\" content=\"Columbia law professor Tim Wu doesn't like usage based pricing for internet services. 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