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economics

Who’s being greedy?

AT&T recently announced that they are going to start implementing bandwidth caps on their DSL subscribers. You would be allowed 150 GB of data per month, and then for each 50 gigs you go over, it would be another 10 bucks. Predictably, there is general outrage over this. People are threatening a mass exodus over this etc. . Personally, I can’t imagine going over 150 gigs a month on a personal internet connection, let alone 200.

The big thing that gets thrown around is that AT&T is just being greedy. After all, it doesn’t cost them any more to push one byte across their network than it does to push 200 gigs. The “pipe” costs them the same in any case. What people forget is that the more space that is taken up by one person in the pipe means there is less for other people, and it could potentially limit the number of customers that they could service.¬†AT&T claims that something like 2% of their users consume 20% of their bandwidth.

So, on the one hand, we have a company that can pinpoint users that are using terrific amounts of their service and wants to charge them to make up for decreased customer capacity and possible impact on other users, on the other we have people that use tremendous amounts of bandwidth and scream bloody murder because they think they shouldn’t be charged any differently no matter what kind of impact they have on AT&T or other users. So who’s the greedy party again?

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