osewalrus (osewalrus) wrote,
osewalrus
osewalrus

The Economics of Canada's Usage Based Billing Scheme

This video is at least consistent with what I learned about network economics.

Unlike most metered goods, such as water, information passing over a network does not consume the resource in question. The marginal energy cost is fairly low, and the capacity of the network is a large sunk cost amortized over all customers and services. So why does it make sense for incumbent providers to impose usage caps on wholesalers that they must pass through to their retail customers? Answer: it doesn't.

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