Why do we pay ISPs for internet speed, but mobile network operators for the amount of transferred data?

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Why do we pay ISPs for internet speed, but mobile network operators for the amount of transferred data?

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A few years ago (before streaming really) it was quite common to have a data limit on your home internet too. Unlimited data is only a recent development, I think due to the fact that the ability to stream high amounts of video is a basic expectation now. A lot of providers probably still have a fair usage clause hidden in the small print too.

ISPs charge for internet speed because they are providing access to their network infrastructure. This includes the routers, switches, cables, and other equipment they have installed to provide internet access. They charge for the speed of the connection because it is their job to ensure that the network is capable of delivering data at the speeds they advertise.

Mobile network operators, on the other hand, charge for the amount of data transferred because they are providing access to their cellular network. This includes the cell towers, antennas, and other equipment they have installed to provide cellular coverage. They charge for the amount of data transferred because they are responsible for the capacity of the network and must ensure that it can support the amount of traffic each customer is using.

They bill that way because that’s the business model the telco’s were used to.

Mobile networks based their billing scheme on the long distance plans of old which charged based on minutes used, so usage based was the standard. You’ll note that they often still charge by the minute for calls and long distance depending on your plan.

ISPs meanwhile typically charge a flat fee like cable services, with different tiers based on performance.

DSL providers (telcos) had to use the flat fee model to compete with the cable ISPs, because customers had no interest in paying by the Megabyte when you can pay a reasonable flat fee per month.

Mobile providers meanwhile have no such competition, so they are free to collude and gouge their customers.

Some ISPs do charge overage fees for heavy users, but depending where you are located these are falling out of favor or even becoming illegal.

Internet service providers (ISPs) and mobile network operators (MNOs) offer different types of services, so they charge for their services in different ways. ISPs typically provide customers with a connection to the internet, and they charge for that connection based on the speed of the connection. This means that customers pay for the amount of data they can download and upload, as well as the latency of their connection. In contrast, MNOs provide customers with access to mobile data networks, and they charge for that access based on the amount of data that is transferred. This means that customers pay for the amount of data they use, regardless of the speed of their connection. These different pricing models reflect the different types of services that ISPs and MNOs provide.

there are more bottlenecks in a mobile (radio) network, due both to technology and cost and available radio spectrum (a lot of it is used for other stuff already, a lot of it just isn’t suitable for high data rates)

There are physical limits on how much data (to and from all users at once) can be handled on the set of frequencies the networks are allowed to use.

Those bottle necks do improve over time, as smaller cells, or better ways to squash and encode data are developed but it’s a much more lumpy or punctuated process of evolution than say just sticking a fatter internet pipe, or more pipes in the ground.

If you want to introduce a new way of squashing data onto a radio signal, as well as updating the backbone you need to get every phone or device manufacturer on board and ready for a new standard as well as continue to run older networks alongside newer ones for everyone’s existing devices, still using the same set of frequencies and capacities… gradually phasing from one standard to another over time… If you want to use different frequencies, you need to get multiple nation states and goverments to agree which is a massive pain in the bum to do and takes time.

basically mobile networks have a different priority because they have harder limits on resources (bandwidth).

in reality both networks are constantly improving speed and capacity and both have caps, the caps are just more visible for mobile networks because of the physics of radio.