Yes, incentives do matter … Brian Micklethwait finds that how he pays for Internet access changes how he uses it. In transition between service providers, he finds himself with a slow, pay-for-time connection, which has changed how he uses the Internet:
Suddenly, I find myself back in the world of “the news”, in the form of a pre-packaged collection of summarised reports and comments, where all that I learn about each item is the little that the journalists have space in their newspaper or time in their TV slot to tell me. I have stopped being the actively curious individual that a permanent internet connection enabled me to be, and have reverted back to being a passive news consumer. I am no longer in continuous charge of my thinking about the world and its latest doings and sayings. I can only choose from among a few packages. After that choice is made, I am at the mercy of the packagers I have chosen.
Brian is experiencing two changes: one of service quality (dialup instead of broadband) and one of pricing (per minute instead of per month). His experience is important as we consider different proposals to price Internet access differently. I have not thought very deeply about the different proposals for volumetric Internet pricing (by time, by activity, etc.), but Brian’s experience makes me think about how pricing would change how we use the Internet. What would the effect be of charging more for video downloads and other high-bandwith uses? Is such pricing enforceable, or are digital bits sufficiently homogeneous that we would be able to circumvent identification that would differentially price different types of streams?
Here’s an interesting news article that discusses pricing in the context of the proposed AT&T/BellSouth merger.