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I don't understand what you mean by wholesale and retail differences in bandwidth, as far as I'm aware of, there is no real difference. If you are talking about Google getting a discount for its massive bandwidth pipe, wereas I do not, I don't see any evidence for that, and besides, isn't it the perogative of whoever owns that bandwidth to charge Google as it sees fit?
We aren't charged per byte now, neither should we be, we are charged for the maximum bandwidth we choose to buy, in my case a 384k or so connection through my cable service. I could download gigabytes of data one week, and none the next, and the charge is the same per month, it neither increases nor decreases due to my load. No one on the Internet, unless they are piggybacking off of someone elses network, gets a free pass, so I don't see the complaint. As far as the cost of upgrading the backbone connections to the net, it will be upgraded just like always, with a combination of private and public funds to keep costs down. Think of it this way, with more people using broadband, while that increases loads on the net, it also increases the monetary base FOR upgrades.
Besides, one thing that is good about technology is that it gets cheap REALLY quick, whether its services, like ISPs, or hardware, like fibre and microchips. A decade ago, my broadband connection cost 3 figures or more a month, and only covered a small percentage of the net, and is usually what was used for commercial and government applications only, including universities. Now that cost is down to a more reasonable 30 bucks or so a month, actually about 32 bucks, rounding up from change, of course.
Your example of Google not getting charged more for putting video on the pipes, I assume you mean they hosting them on their own servers is erronious. Google DOES get charged more, they BUY more bandwidth to handle the higher load they get from hosting such videos. If they didn't do that, then their servers get overloaded, we customers get 404s, and Google loses money from advertising. Google pays for its bandwidth to get on the net, I pay for access to the Internet, my ISP pays through a peering agreement to AT&T to access the main pipe so I get access to Google's services, and then AT&T or whoever complains that one or the other is getting a "free pass"? Uh, I don't think so.
To draw a valid comparison, if I call someone long distance on my phone, I get charged the long distance call, the person recieving the call doesn't. The Internet works on the same principle, and it works just fine, people have been talking about the net collapsing because of the amount of people overloading it for about a decade now, and it hasn't happened yet. Its a largely decentralized structure, ensuring that if one server goes down, you still have access to others. I favor net neutrality legislation in RESPONSE to AT&T's and others pushing of legislation to allow for double dipping. They are getting too greedy, and need to be reeled in.
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