Argo recently asked,
Let's look at one example of a new business model.
Netflix recently announced a set-top box to deliver movies directly to a set-top box via the Inernet. It's a very exciting idea that adds great value to their service and they will save a ton of money in postage, a good thing for them.
Their plan will use an enormous amount of Internet bandwidth which can cause additional congestion along the way. To prevent this from happening, ISP's and Internet backbone suppliers provision for increases in usage.
But most ISP's currently charge consumers a flat monthly rate. ISP's not only pay their backbone providers for their customers' increased usage, they also have to provision their own networks to deliver these new products. This is a fatal flaw in the residential ISP pricing model that someday, surely will break.
How would Agro's new model work in this case?
What if ISP's built an "express lane" from Netflix to their customers? Higher bandwidth-consuming products, like in this case movies, would be delivered smoothly and rapidly. The ISP's and the movie rental company would have an economic relationship to pay for the expressway.
The movie rental companies could use part of their postage savings to ensure the efficient and rapid delivery of their products via these express lanes. For a small premium charge, they even could offer a premium level of service, guaranteeing even greater stability and speed.
This model seems eminently fair to the ISP, the content provider and, most importantly, to consumers. The alternative is for ISP's to charge for heavy usage, or metering, where consumers don't get the additional value of express delivery but still have to pay for the provisioning needed to deliver the movies.
So what's holding us back?
Simple. The threat of regulation.
As fair as this model seems, there are some who are trying to convince policymakers that it would disadvantage content providers (in this example, some movie rental companies) who do not have expressways to consumers. So, even if the ISP makes this arrangement available to others, they ask why it wouldn't it disadvantage the movie rental companies who don't take them up on it.
But that's their choice. Some movie rental companies could have a premium service level available to consumers while others do not. If you prefer Blockbuster who may choose not to offer an express connection, you can still deal with your chosen provider with a standard connection. Or you could check out other ISP's to see if they have a deal with Blockbuster. That's the beauty of competition at multiple levels.
This shouldn't look very strange to consumers. After all, every time you do a Google search, you find preferred (or paid) results at the top of the page. And by the way, unlike bandwidth provisioning, it doesn't cost one penny more to put that result at the top.
Argo's question is precisely the right one to ask. A multitude of new products and services are being aggressively developed for Internet delivery. That will create the need to add vast amounts of bandwidth throughout the Internet.
The underlying issue is this -- Do we want consumers solely to foot the bill for the necessary new infrastructure by being charged for usage or do we want to spread the costs by unleashing the forces of competition and innovation? Let's encourage companies to explore innovative business relationships that deliver additional value to consumers by removing the threat of unnecessary regulation of the future of the Internet.