"All you can eat" broadband access plans are unsustainable and should be replaced by more-flexible plans that allow users to match what they pay with what they use, though a strict "per byte" metering would be a disaster, says Lawrence J. Spiwak, Phoenix Center for Advanced Legal and Economic Public Policy Studies president.
Indeed, if the old long distance and dial-up Internet models are any indication, a strict “pay by the byte” pricing scheme would scare many low-income and low-volume users to overcompensate and change their usage habits, or even to drop their service all together, Spivak says.
Telling carriers to just “invest their way out” of the congestion problem is also a naïve solution, he says. "The network is a shared resource, and this approach would cause the price for all users of the network to rise," says Spivak.
And, as the price for everyone rises, some households won’t be able to afford broadband at all, he says. Publicly available studies show that these costs could potentially reach several hundred dollars per month, which would certainly put broadband out of the reach of many Americans.
The best, and most economically efficient, option is to let carriers develop plans that allow consumers to pick and chose the approach that best suits their needs and, just as important, let consumers be responsible for their choices.
In the end, efforts to prevent carriers from experimenting with different pricing plans for multi-product offerings is nothing more than a thinly veiled attempt to tax the many to subsidize the few who spend their lives online, Spivak argues.
However, in this case, the “few” are not the poor and disenfranchised who work hard to just to pay for their own broadband, but the Internet glutton next door, he notes.
When there is a congestion problem, there is actually a pricing problem, he says. "All you can eat" works when there are few users. It doesn't work when most people use a resource, and the usage pattern is highly disparate.
Like it or not, constructing broadband networks (wireline and wireless) is extremely expensive. Payback is difficult. But lighter users should not be asked to subsidize consumption by unusually high consumers.
The needs of the few are now often outweighing the needs of the many, Spivak says.
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