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Friday, January 9, 2009
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This whole bandwidth shortage concept is rather amusing really. Let me explain:

1. A service provider knows that in the past, say 75% of their customers for example...only use a fraction of what they pay for.

2.They built a network on this utilization rather than what was purchased. Which frankly makes perfectly good business sense, but at the same time is somewhat fraudulent. Because really, they decided on their own that they would re-sell the capacity that you xyz customer didn't use on their network that you purchased to customer abc. It's common practice and old. Phone companies have been doing it forever. But doesn't make it right.

3. Suddenly a growing percentage of their customers use what they purchased. And the old business model of relying on re-selling already sold network capacity is not working as good.

Solution? Raise prices on those who utilize the service.

This whole line of thought is the exact thing that is keeping the US out of the broadband race. Pretty sad really. You didn't see the service provider refund the customers money for not using network capacity did you? Nope.

Like I say, somewhat unethical in my opinion, but common practice.

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