Why do we pay ISPs for internet speed, but mobile network operators for the amount of transferred data?
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A lot of home ISPs also used to charge based on amount of transferred data.
It’s just a business decision, based on how oversubscribed their connection upstream of you is. Networks are oversubscribed as in, maybe 500 customers get sold a 100Mbps package each, but there’re all wired into the same cabinet. That cabinet has a 5,000Mbps connection to a data center that connects to 100 cabinets, and the data center has a 50,000Mbps connection. Obviously not everyone can use their 100Mbps all at once.
They usually choose how to price it, based on how likely it is that everyone will use it at the same time and get slowed down. If it’s going to work at full speed most of the time, they may just sell it as 100Mbps unlimited. Most people won’t use the whole 100Mbps all the time. Some people will, but not enough to cause a problem. But if there’s even less total bandwidth, and it is more likely that people won’t get their full speed, they might add a monthly limit as well. Or they can make each connection slower – maybe they can get away with selling unlimited 50Mbps connections, instead of limited 100Mbps connections – but 1000Mbps* ^^fine ^^print looks better than 50Mbps.
Mobile networks are generally slower than cabled networks, so they’re making this transition later than cabled ISPs did.
There are a lot of … not right answers here.
First ISPs (fixed internet). You pay for speed because it’s a convenient way to ‘price differentiate’ – that is, for the ISP to extract more money from those who are willing to pay more. You sell a premium service to those willing to pay a premium price, while still being able to have those with less deep pockets as customers. (They take the basic service). Speed is simply the ISP differentiates the different service tiers. Note that in general, this is *nothing to do with cost*. If you’ve built a fibre network, there is essentially no cost difference between offering the customer 50 Mbps or 500 Mbps. (Indeed, the 50 Mbps service is usually provisioned by artificially limiting the speed of the line in question).
The situation for mobile networks is a little different. Here pricing is driven by traffic (MB or GB) because this is a key driver of cost. If you offer unlimited usage, you run the risk of getting a bunch of high usage customers on your network who suck up all the capacity of your cell sites (which is shared between users in that area), leaving the other users with a terrible experience unless you spend a lot of money to upgrade the network. Think of an all-you-can-eat buffet, where the a hippo comes to visit and troughs the entire salad bar before you get there.
This is beginning to change, because it’s getting ever cheaper for mobile operators to add capacity, but usage growth is slowing. This is reducing the risk that unlimited offers will lead to unmanageable demand, so they’re starting to be a more important part of the market.
[Source: been in telecoms for over 30 years, have worked on pricing decisions, built network cost models etc etc]
If you have my shitty ISP, LOOKING AT YOU COX YOU GIANT BAY OF DICKS, they have a data limit also. They didn’t used to though, which made it feel like an easy cash grab. They have basically no competition here in Phoenix AZ so they just do whatever they want.
My ISP is my wireless provider, and it’s all over the same network. No limit for the amount of bandwidth I use on any if the 5 devices I have on my TMo account. (4 phones, and a 5G home wireless router) speeds have ranged up to 600 maps, which is important because I work from home, and deal with some pretty large excel files.
These comments are super funny to me. Are none of you old enough to remember paying by the minute?
[Tier 1 ISP’s](https://en.wikipedia.org/wiki/Tier_1_network) do make you pay for transferred data. A tier 2 or 3 just eats the cost. That is also why there was a push from tier2/tier3 providers like Comcast to put data caps on service. They wanted to pass those costs onto the consumer.
would a satellite internet provider be an ISP or a mobile network? Because they charge for both.
Lots of technical answers here, but the reality is wireless providers had better lobbying with politicians.
In the early days of the internet, there was political will to make internet access as equal as possible to not let companies and rich people buy up a disproportionate amount of bandwidth and squash competition.
Wireless internet came later and the wireless companies lobbied hard to not get lumped in with ISPs when it came to regulation. And still to this day, they get to play by different rules.
You also pay ISPs by the data it just happens to be a lot more. The average limit on a home is 1TB but if you go over that expect your bill to be higher.
Who says all ISPs charge solely on speed?
All ISPs here in Australia as far as i can tell only offer unlimited on their higher-end plans.
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