My correspondent had worked himself into an advanced state of dudgeon over this "scam." "They're screwing us," he said. Internet users, he felt, should be entitled to spend as much time on-line as they pleased, and not have to pay extra.
I was curious as to just exactly what kind of activity could possibly occupy more than 100 on-line hours a month -- after all, that works out to around three hours and 20 minutes every day, seven days a week. I consider myself a pretty heavy net user, yet I don't come anywhere near that much usage. So I dropped him a note to inquire what he did with his on-line time.
Funny I should ask, he wrote back. Apparently, this fellow (a 20-something student) and his family and friends do indeed spend that kind of time plugged in. This time is occupied by on-line chat, Internet phone, interactive gaming, and other forms of communication and recreation. I tend to wonder about what kind of life these people have, if they're spending upwards of 20 percent of all their waking hours on-line -- but, to each, his own.
The Tragedy of the Commons
What my young correspondent doesn't seem to understand is that an ISP, like any enterprise, isn't in business just to make people happy -- it's in business to make a profit. And very few ISPs have been able to make ends meet giving customers unlimited usage for $19.95 a month. That's because when you give people unlimited access to a limited resource, that gives them an incentive to use as much of it as they can. This behavior is what geographers call "the tragedy of the commons." The classic example of this is what happens to public grazing land: everyone sends his cattle out to graze on the public land, figuring it's better to have your cows eat someone else's grass while your own remains untouched. The predictable result is that the public land gets beaten to death, every blade of grass chomped down to ground level. On the Internet, what happens is that when you give people unlimited time on-line, they simply leave their modems logged in all day -- why log out when it doesn't cost anything to stay on-line? Or if they don't actually leave an idle machine logged in, they'll just use a lot more time than necessary -- reading and writing e-mail on-line, instead of logging off, since it doesn't make any difference on the monthly bill. They'll chat with friends on-line, instead of on the telephone (which, after all, was made for chatting). As a result, the ISP has to have an awful lot of network infrastructure in place if it wants to avoid busy signals.
Now, I have no particular bone to pick with people who like to chat on-line -- after all, Meg and I met that way -- or with playing interactive on-line games (although there's something to be said for turning the computer off and getting some fresh air, which a lot of these youngsters apparently could use). But I fail to see what's wrong with putting a limit on flat-rate usage. Just about every commodity in our economy is priced by the unit -- if you use more, you pay more. Why should Internet usage be any different? Here in Chicago, you can't even get unlimited local phone calls for a flat rate -- if you call more, you pay more.
We walked seven miles to school in the snow, too
The folks who complain about the "high" cost of Internet access and think it's unfair to be charged an hourly rate obviously haven't been around cyberspace very long. Before Internet access was available to the general public, on-line services like CompuServe were the only game in town. And they were expensive -- CompuServe used to cost $12.80 an hour. And that was for 2400-bits-per-second (bps) access -- if you wanted to connect at a blistering 9600-bps, the toll was $22.80 an hour! That makes my ISP's new "outrageous" rate of $19.95 for the first 100 hours and a buck an hour after that seem like the bargain of a lifetime, doesn't it?
There's a pervasive "everything should be free" culture on the Internet. I run into this every day, because I do customer support for a couple of subscription Web sites. These sites charge a small monthly fee (six or seven dollars a month), and in exchange, the customer gets electronic access to several hundred magazines. It would cost thousands of dollars a year to subscribe to all the publications available from these Web sites -- yet people have the nerve to complain about the fact that we charge for their electronic versions at all!
But as my aunt Georgia is fond of saying, the best things in life cost money. The Internet may be a goldmine of information -- and a lot of it may be free -- but writers don't work for nothing. They've got bills to pay. So do publishers. So do telephone companies. And so do ISPs. Information may want to be free -- but the people who produce and provide it want to make money. In recent months, AT&T WorldNet, IBMnet, MCI Internet, and Pacific Bell, among others, have abandoned the flat-rate pricing model in favor of a specified number of hours for $20.00 or so, with an hourly charge after that.
Back to my correspondent. When I offered that I thought 100 hours a month was plenty, for most people, he replied that I "didn't understand" what the Internet was for. It was for live chat, gaming, and making free long-distance phone calls, he argued. Well, who am I to take issue with that -- but real-time use is not what the network was originally designed for. It was primarily -- and still works best as -- a store-and-forward system for the transfer of information between one computer and another. And people used to use it that way. Not so long ago (say, as recently as five years ago), it used to be considered rude to transfer a large file with FTP during business hours, because of the bandwidth required. The Internet works phenomenally well as a store-and-forward system. When you use it to shove huge amounts of data through a small pipe in a short time, though, that's when you get the World Wide Wait.
How to succeed in business: by trying stuff
The Internet has become a global experiment in how to formulate a successful business model. How to make a profit providing access, how to sell information, and how to sell products. Lots of companies have come and gone, and successful business models aren't really well-established yet. For example, the two Web sites I work for are by no means assured of staying afloat, despite the phenomenal amount of information-for-the-money they provide. But when one model fails, you throw it out and come up with something else -- that's what's happening in the ISP business. We've gone from the hourly rates of the old-fashioned online services, to generic ISPs with all-you-can-eat pricing, who undercut each other to death. A lot of them went belly-up, there's been a consolidation, and now we're going back to hourly pricing.
Eventually, network infrastructure may become cheap enough that it'll be possible to offer unlimited access for a flat rate and make money doing it, similar to the way local phone service is on the unlimited flat-rate pricing model in most places. But the young live-chatters and gamers who spend hundreds of hours a month on-line -- and who don't get enough sunlight -- have a few lessons to learn about how the business world works. Give them time; once they have businesses of their own, they'll understand.
Copyright © 1998 John J. Kafalas