TechCrunch has a great post about the impact of bandwidth caps for Internet use. The post, which links to an expensive report is available here:
The Internet Capacity problem is just like the electric energy problem. In the UK customers could install a meter for cheap rate power to charge up storage radiators.
These ran overnight when there was plenty of power available and then gave out heat during the day. As pointed out in the Techcrunch article, we need to deal with the peak capacity issue and simple bandwidth caps exacerbate rather than alleviate the problem.
If "cheap rate" bandwidth became popular it might trigger some interesting developments. Imagine an "Internet Storage Radiator" that could go on to the Internet each evening when bandwidth was plentiful and download and cache popular content. This could be based on the browsing patterns of the people typically using the family or small business network. Then with some intelligent proxy serving the pre-loaded content could be served from the "Storage Radiator" with the live Internet connection only being used for real-time content.
With the falling cost of compute power and storage this type of service could be an affordable option. Imagine if the storage radiator would refresh your video queue amd download and store likely new content which would then be available on demand - without taxing the your network connection. This could be an interesting proposition for Netflix since they currently represent probably around 30% of peak time Internet usage.
Netflix could turn the tide of bad sentiment for their brand through caching
Imagine if Netflix offered a low cost storage hub that you could attach to your network router that cached popular content and offered this in conjunction with a low cost "cached movie plan". This could be refreshed overnight based upon a member's queue selections. This could reduce/redistribute network demand and reduce peak demand on their architecture and content delivery network. They might even negotiate more favorable transmission charges with ISPs for this off-peak content transmission.
I can see how Netflix could easily implement the use of this cached content.
There are plenty of opportunities for innovation in this space. We can come up with better solutions that address the real problem - peak hour demand versus network capacity.