[LINK] More Geist: Myths and Fallacies About Usage Based Billing

[Paul Brooks]

On 1/04/2011 12:25 PM, Kim Holburn wrote:
> He reiterates 3 important points here that we could do well to note:
>
> http://www.michaelgeist.ca/content/view/5718/125/
>
>> Myths and Fallacies About Usage Based Billing
>>
>> Thursday March 31, 2011
>> Bill St. Arnaud has posted a paper on usage based billing that challenges some of the frequently made claims on UBB. St. Arnaud notes that the paper demonstrates three important facts:
>> 1. Internet video streaming services actually reduce costs for Internet backbone networks operated by telephone and cable companies, even as traffic volume grows;
>> 2. There is no correlation between volume of Internet consumption and costs for telephone and cable company last mile providers and that congestion, if any, is more of an artifact of design assumptions made by the operators; and
>> 3. Cable and telephone companies operate competing video streaming services over the same last mile infrastructure used for Internet access services, which generally are not priced based on usage, and yet somehow seem to able to avoid congestion as well as provide the service for fraction a price of what they charge for delivery of the same video content delivered over the Internet.
Unfortunately, the paper and the conclusions seem to be based on underlying
assumptions that do not hold in Australia for the majority of ISPs, and describes the
architecture of an incumbent, local access network owner's retail services, where the
provider owns outright all long-haul transmission infrastructure, and does not need to
lease bandwidth in any region of the network. The underlying assumptions are not true
for an ISP that uses any of the Australian wholesale DSL network services to reach its
customers, and probably won't hold for NBN-connected RSPs.

If the underlying assumptions are incorrect, the three conclusions are suspect.

Its too late to create a full analysis tonight however. I suggest you read the full
paper before accepting the conclusions as gospel in Australia.

Paul.