Why are people comfortable with paying for tiered connection speeds, but not comfortable with a monthly data cap (that can be removed by paying more for a business connection)?
I think its because paying for a tiered connection speed is set-and-forget. Paying with a monthly data cap effectively overlays an economic decision over each interaction you have with the internet. "Do I click this link? How much bandwidth will that use?" Even though I think most people probably would end up not thinking about it on a link-by-link basis, they do have to devote some mental power to monitoring how much of their data cap they've used, how much they have left in the current billing cycle (especially under billing regimes that charge way higher marginal costs when you exceed the initial cap - e.g. most US mobile phone voice minute plans).
It's just annoying. Even though it seems like tying the price of something to your use of that thing is the most efficient way to bill, it just sucks because then you have to think too much about every use: text messages, AOL hours, phone calls, until these things got so cheap that they weren't worth metering, all were in that category.
Personally, I suspect there's some behavioral economics ish at work here that is measurable, like...you know how some hotels and cruiseships have all-in prices? I bet people are actually willing to pay more for the same amount of consumption with the 'unlimited' plans because they enjoy not having to worry about it. This would also be pretty easy to test with cruiseship or all-inclusive resort data where they also sell other a la carte packages.
I have data cap plans on my phone and iPad, and I don't really mind them, but its only because I know that they are effectively unlimited: I never come close to using up the cap level of data. I don't watch Slingbox on my phone, etc.
I tell you what really burns me up though: the fact that even though I am paying per-gigabyte transfer fees on my iDevices, AT&T wants me to pay more money to tether to my laptop. Why the fuck should they care? The data is the data. I understood when the idae was that a tethered laptop would use assloads of data on the nominal "unlimited" plan exceeding their modelled costs, but...dude, I bought data transfer. why do you give a shit which device the packets end up on? I HATE THIS. It honestly annoys me more than if AT&T just built in the tethering to the price and I just had to pay it.
I have a Linode with a data cap of 300GB per month; if I use more than that, I pay a reasonable amount ($0.15/GB) for the excess. So if I use a lot of data one month, I get a charge on my credit card, and life goes on. I'm completely comfortable with this.
A residential Comcast connection has a data cap of 250GB per month; if I use more than that, they turn off my connection and ban me for a year. So if I use a lot of data one month, I find myself abruptly and semi-permanently screwed. I am absolutely not comfortable with this since the consequences are so severe and long-lasting.
I don't think this is the case at all. The problem people have with monthly caps is that they're frequently done with plans that advertised "UNLIMITED X!". There are also people who don't mind paying per GB. The problem most people have is when ISPs react according to content, such as capping your torrenting but leaving youtube untouched, or capping Netflix but not Facebook, etc.
I thought there was a law against doing that (net neutrality).
I've heard that ISPs discriminate between "types" of content (video vs text). But I wasn't aware they were discriminating based on the company (Netflix vs YouTube).
I thought there was a law against doing that (net neutrality).
There is no law enforcing Net Neutrality.
And really, the concern isn't that a company like Comcast will meter Netflix, but not Facebook. It's that they will meter Netflix, but not "Comcast Video Streaming" if they were to offer such a service.
