A version of this post originally appeared on George Scoville’s blog.
Some big ISPs are extracting a toll because they can — they effectively control access to millions of consumers and are willing to sacrifice the interests of their own customers to press Netflix and others to pay.
Woof. Charging a toll is exactly what ISPs are doing, not only because they can, but because they should:
Verizon can only supply a limited amount of mobile bandwidth on its 3G and 4G networks — just like a 12-volt battery can only supply a limited amount of power. When many users with no barrier to their consumption of data — or at least no barrier above a $30 per month fee — they have in effect incentives to over-consume the limited resource. This is a classic collective action/tragedy of the commons case, and the fact that, [when consumers face very low prices for network access], Verizon’s network experiences strain from lots of data-hungry consumers [and can’t keep up with demand], the current pricing system is inefficient.