> Fraud yes, because they're underprovisioned if everyone asks for 1 Gb

All residential ISPs overprovision [1] at some point or another - be it at the acccess level (as with shared mediums like DOCSIS and GPON), distribution/aggregation (metro Ethernet switch and (V)DSL DSLAM uplinks) or at peering/upstream level (always).

You cannot expect to have non-overprovisioned 1Gbps at $60/mo, when global transit is currently around $0.6/Mbps/mo. Typical overprovisioning levels range from 1:8 to 1:16.

[1] - From the point of view of offered speeds vs. underprovisioning infrastructure, as you put it.

EDIT: corrected that DSL is not shared medium

There is a neighborhood community ISP in Copenhagen called Bryggenet. They used to make it very clear how much overprovisioning was going on, and have two different options each subscriber could pick with different levels of overprovisioning. I understand from some people who were involved that it caused some initial confusion and complaints, especially when comparing to advertised speeds of commercial offerings, but people understood eventually.

They now seem to have moved away from that model, based on a quick look at their website.

https://en.wikipedia.org/wiki/Bryggenet

GPON is the least over provisioned of these, but it is definitely overprovisioned.

DSL is the worst. Local VRADs just get slammed, particularly in areas with long connection runs.

$0.6/Mbps/month is a bit on the high side for IP transit at scale.

You can buy IP transit for under 10 cents per Mbps at well connected datcenters. Additionally, any ISP with peering at an Internet exchange will have a lower blended costs as a lot of content can be accessed over settlement free peering and local CDN nodes.

How is this a Ponzi scheme?

As GP (and FCC) indicates, you pay for a service but only get what was promised if the collective load permits. If everyone hits their lines at the same time, there's not enough capacity to maintain advertised service.

Similar problems occur with the electric grid or water etc, but the thing is as long as there is excess capacity 24/7 you can’t tell the difference. Unlike money you can’t bank unused bandwidth.

The reality of 1Gbps networks is people have trouble saturating the line for very long. Even 5 different 4K streams is not hitting anywhere close to that.

Being able to download a 20GB file quickly is the benefit, even if you don’t download many of those per month.

That doesn't describe a Ponzi scheme though.

I think it's a very high level comparison to the idea that the funds/rewards in a Ponzi scheme are underprovisioned.

Edit: Yes, it's not a great analogy.

But on an even higher level, a Ponzi scheme is outright fraud where most victims get nothing. Underprovisioned internet bandwidth gives every customer part of what they were promised, which is plenty for most of them anyway. Using sensational words imprecisely distorts meaning.