BBC Vs ISPs=Failure Of Free Market?

BBC iPlayerImage via Wikipedia

“Didn’t England just go through this with its rail privatization? Didn’t its rail infrastructure go to the dogs? Running pipes is never a good business model. Basic infrastructure is a sort of prisoner’s dilemma. No one wants to pay for it, but everybody benefits. That’s why it is traditionally handled by the government, often after a series of bankruptcies in the private sector. The government can pay for it by taxing everyone a piece of what they make off of it.”

“It’s obvious that the ISPs have dug themselves into a hole. They assumed a gaussian, or erlang, distribution, but they’re getting a fractal distribution of usage, and that’s straining their system. They can cut back on their marketing hype, raise prices to meet their production costs or they can innovate. Being in the private sector they’d rather remove their kidneys with rusty spoons than innovate…I don’t claim to know how to solve this, but the ISPs for the most part are not even trying.”

Part of a comment by kaleberg on Ars Technica about how UK Internet service providers are unhappy that people are actually using their broadband, especially the BBC iPlayer and that’s really not what the ISP’s meant by ‘unlimited usage’. The ISP’s want the BBC to pay to subsidise the strain on their underfunded systems whilst currently ISP’s experiment with bandwidth throttling to discourage users from actually using excessive bandwidth (a kind of congestion charging for downloading?).

The argument is ‘who pays?’. Some say that asking the BBC to subsidise new infrastructure is akin to asking the car companies to pay for new road building because more people bought their cars. In the end it’s likely that government will again bail out the free market by paying for the infrastructure the free market should have provided in the first place.
More Reading:

Guardian article

New Scientist

The Telegraph

The Register article on bandwidth throttling

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