Then the companies charge more for the more bandwidth consumed.
Internet bandwidth is a commodity, it’s not going to be any different from AT&T versus Comcast versus Verizon.
So why are the internet companies trying to use a beautique pricing scheme? Oooh, if you go to Facebook it’s costs XX, but Myspace is YY, and YouTube is ZZ.
It’s all the same 0’s and 1’s, it’s just that some places use more than others.
At the start of the dial-up era, internet pricing was handled that way. And when the capacity caught up, then you started to see the ‘unlimited internet’ packages. So either the industry’s business leaders are incredibly stupid, or they have decided that the old business model, which handled the exact situation you’ve described... is not good enough.
I think you just made up a new and potentially useful word there. ≤}B^)
But seriesly, if we had an actual free market in data transmission services, the provider would be free to adopt whatever pricing model he wanted, and bear the consequences.
One credible model would be not to care what the customer's bits were being used for, and adopt a uniform rate. This rate would be set according to the provider's capacity to supply and the aggregate of his user's demand at the offered price. He would charge a price that would result in the fullest utilization of his facility, without clogging the network resulting in a wave of pissed-off customers who would take their business elsewhere. If his network was maxing out too often, he would have to choose among the options of price increases, additional investment, and dissatified customers.
A dramatic rise in network demand might be coming from a specific class of users, for instance hand-held wireless movie watchers. The provider would consider raising the rates on this particular class of user. Obviously, this class of user, already paying more than other users because of the volume of his demand, would be none too happy. But the provider would have a right to allocate his product (i.e., bandwidth) among his customers so as to produce maximum revenue to himself. A goodly part of the provider's strategy would be to maximize customer satisfaction--or, better put, minimize customer dissatisfaction.
Now, in a truly free market, information providers would have full ownership of their networks. It would be within the rights of a provider to charge different prices per bit to different classes of users (as defined by the provider). Each user would tend to seek out the provider who offered the most advantageous rates for his type of usage. Competing business models would reward some providers and penalize others. All providers would take notice.
As with most everything else, we do not have a free market in telecoms, and never have had one. When any good has become as pervasive as phone/internet service, the nation makes it into a political football, and (to mix metaphors) its providers into political pincushions. Then, different classes of users become political adversaries, getting the government to bring force to bear on the industry. Industry responds politically, with lobbying efforts to influence legislation and regulation.
I think that it comes down to the fact that over time everything of economic value comes to be viewed as a "right." People in general little realize how much these "rights" eventually cost them.