Idea du Jour: Bandwidth Credits

Plenty of American geeks are in a tizzy over Time-Warner Cable’s recent announcement to test usage-based billing for bandwidth in Texas. Like, say, water or electricity, you’ll pay based on how many gigabytes you use per month. This seems pretty reasonable, actually–I’m not sure why everyone’s got their panties in a twist. Mark Evans has some reasonable commentary on the topic.

Plenty of bandwidth goes unused each month. Wouldn’t it be cool if big downloaders could, like polluters buying carbon credits, buy unused bandwidth from people who weren’t using it? It could be automated, based on some kind of auction model. Maybe such a system already exists?

I expect there would be some technical barriers, as well as some very disinterested cable companies. Still, I like the model. If we’re going to treat bandwidth like a resource or utility with scarcity, then there ought to be a marketplace for it.


  1. Wow. I mean… literally. Wow. I can’t understand why anyone *would* go for this.

    Remember what long distance used to cost in the 1980s? Hey! Let’s do that with our internet!

  2. Water and electricity are limited natural resources, whereas bandwidth is limitless technology (it’s been growing exponentially for decades now).

    A better comparison would be if you were suddenly charged per minute for local calling on your landline, or if the cable company decided to charge you depending on how much tv you watch when its been unlimited usage since the beginning.

  3. Jimmy: I disagree:

    * Electricity is not a natural resource.

    * Electricity and bandwidth are limited in exactly the same way–by technological infrastructure. Just as we can add more servers, underground cable and routers, we could build vast wind and solar farms.

    * My point isn’t about ‘resources’, anyway. It’s about water, electricity and the Internet as utilities. Maybe I should have clarified that, but I did put them in the context of paying per month based on usage.

    * I can’t speak about the US, but in Canada I’m pretty sure that bandwidth has never been ‘unlimited’. With the major Internet providers, there have always been limits. They may have been buried in the terms of use, and rarely applied, but limits existed. The same, incidentally, has been true in Europe. So this doesn’t strike me as a radical shift.

  4. Just before the dotcom bubble burst, it seemed like everybody and their dog was laying fiber optic cable ( remember 360 Networks in Vancouver ? ) back then, it seemed like bandwidth was going to become a hot commodity (pun intended) that’s when Enron was going to trade in bandwidth. After the bottom dropped out of the dotcom bubble, the amount of dark fibre made the whole thing unfeasible because there was no money to be made. Perhaps someone could enlighten me ( sorry! ) but I still don’t think we are using all that huge fiber optic capacity that got built during the boom. Bandwidth needs to become a scarce commodity again for your idea to work.

  5. Gar: Does bandwidth have to become generally scarce? Or would per-user scarcity suffice?

    That is, my idea ought to work as long as the cost of additional bandwidth to the super-users is greater than zero. Apparently the going rate on bandwidth overages might be $1/GB. Even if a free bandwidth credit market dropped that to $0.05/GB, there’s still a market for it, isn’t there?

  6. Incidentally, I don’t know much about the fibre situation in Vancouver. I did have kick-ass connectivity when we lived in Yaletown, because I was on Novus’s fibre network.

  7. Bandwidth is not free, but there has to be some incentive to trade it, and I don’t see no bull market in bandwidth right now. Incidentally, 360 networks is still in existence, and there website is basically advertising dark fibre for hire. I guess this means that if you are a small fish, you will pay the going commercial rate for bandwidth, in the absence of any real competition, people like Telus, Shaw and Rogers will gouge for something they essentially get for free. If you are a big fish, your cost for bandwidth is determined by the infrastructure that you have to build or lease from others, and right now these costs are not huge. No telling what might happen in the future though, when we start seeing stuff like HDTV over ip.

  8. This post at Geek News Central shows how Australia has gone with bandwidth charges. In essence, you get more bandwidth depending on how much you choose to pay each month, and if you go over your limit, rather than getting dinged mysterious huge charges, or getting cut off, your throughput gets throttled to a modem-like 64 kbps, and you can then pay a fee to get more bandwidth at the usual speed.

    An interesting solution, anyway.

  9. Here’s the thing… bandwidth is not a resource and if it had been treated like this in the earliest days of development we’d still be putzing along on our 56kbps modems. What this bandwidth conservation movement is all about is throttling the future. Digital distribution of things like hi-def movies is making money and happening right now. To limit that with an ambiguous and superfluous charge schema that can barely even be controlled by a free-loving internet user is not only short-sighted but growth-limiting.

    That’s okay, I have choices where I live so I can dump the Comcasts and Time Warners for Verizon’s FIOS service. Adding more bandwidth than I can possibly contemplate using? That’s the future and it shouldn’t be taxed, charged,or over-priced by narrow-minded “market traders” either.


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