Slashdot Mirror
Preventing Broadband Price-Gouging?
Wrighter the Pessimist asks: "I've been seeing a lot of stories recently about cable modem companies raising rates and baby bells winning monopolies on broadband. It seems that indeed cable companies are already raising rates, or will be in the near future. Shouldn't broadband be getting cheaper, with improvements in technology? Or has demand already surpassed the capability? Or, have the monopolies just decided to give themselves a raise? What can we as consumers do to prevent prices from going sky high?" The first article mentions the need for higher pricing for users who tend to use more than their fair share of the bandwidth. The second article is about AT&T raising its rates, which is not news to many Slashdot readers, I'm sure. I would think that in situations like this, that a tiered pricing approach might be better than applying a flat rate. Think you are going to be a high bandwidth user? Pay a fair price to your upstream. Web and e-mail only? Pay less. So do you think the current trend in broadband pricing is fair, or are broadband providers pricing themselves out of the market?
I use Charter. They just introduced a new tier. They have for $37.99 or so, you can get 768Kbps/128Kbps or for $50 or so, you can get 1.5MB/400Kbps. I think $50 or so is fair for now, but it sure seems like every couple months the price goes up..
.. and they could get away with it here because DSL sucks, and the least expensive DSL here from a 'local' provider (not counting Qwest w/ MSN) is around $75+ and that's not even 1MB down.
About three months ago I got a call from Shaw, my cable modem company. They called to tell me that they were dropping the price of internet service from can$50 to can$40, retroactive as of three months before that, because of "increasing popularity of internet cable usage without corresponding television cable" (price for the combo was can$70 - and has remained at that, I believe).
So I'd say that all you Americans are just living in the wrong country - we're fine up here in the Great White North.
Websurfing done right! StumbleUpon
augment your senses: http://sensebridge.net/
But it's not.
Even if you ignore the technical aspects of monitoring bandwidth usage and tying it to individual accounts you then run into the business cost overhead increase of changing your billing method.
Which is easier and/or cheaper? Flat-rate billing all of your customers regardless of bandwidth usage or doing it as they suggest and charging the bandwidth pigs extra?
As the overhead goes up that cost gets passed along to the customers as well.
OK, I'm not being 100% truthful. In a free market system, prices are tied to demand. The higher the demand, the higher the price. However, I didn't mention the one way out of this because it would involve sacrifice, which seems to be a foreign concept to most of Slashdot's readership. That's right, kids, you'd have to boycott broadband and live with 56k until enough people dropped the services that the providers would be forced to lower rates to attract people back.
There really isn't any other way to deal with "gouging", except to pass more laws and create more government bureaucracy in an ill-concieved attempt to implement price controls. This is obviously a bad idea, so basically it boils down to "if you don't like it, don't buy it."
"I don't know that atheists should be considered citizens, nor should they be considered patriots." - George Bush
I'd like to quote this message I received from AT&T Customer Care regarding higher upload speeds on AT&T Broadband. I was concerned about the 128K upload cap.
Take a look at this:
Hello! Welcome to the Online Customer Support Center for AT&T Broadband service. A message from a customer care specialist should appear in the chat window shortly. Your session ID # is 2142439.
In-Kevin Roberts has joined this session!
In-Kevin Roberts says, Hello and thank you for contacting AT&T Broadband. My
name is Kevin & I'll be glad to assist you today. I see you have a question regarding higher upload speed . Can you please give me a little more detail ?
You say, Is there a service plan which provides me with greater upload speeds
than 128k?
In-Kevin Roberts says, Yes, AT&T broadband is coming up with higher upload speed.
You say, when will this be available?
In-Kevin Roberts says, This will happen anytime between May 2002 to December 2002.
You say, what is the pricing?
In-Kevin Roberts says, The pricing will be the same.
You say, what will be the new speed?
In-Kevin Roberts says, The new speed will be 256kbps.
So, to appease cable modem customers, AT&T is rolling out more bandwidth on the upstream side. If you'd like to confirm this, log in to AT&T member services and join a chat room of theirs -- that is what this transcript is from.
I hope this helps those of you who are concerned about higher prices. I, for one, am a very satisfied AT&T cable modem customer.
Simpli - Your source for San Jose dedicated servers and colocation!
Sounds good but in my area noone will be paying less. We currently have 1.1Mbit DSL for $40 CDN/ month, now we have a choice of:
same speed with a brand new 3GB max for $45/month
slightly faster with 10GB max for $60/month
And the price hikes for cable are on their way..
I use Charter. They just introduced a new tier. They have for $37.99 or so, you can get 768Kbps/128Kbps or for $50 or so, you can get 1.5MB/400Kbps. I think $50 or so is fair for now, but it sure seems like every couple months the price goes up
Fair prices for what you get there indeed, i would say.
Wouldn't expect it to last however. I'm in southern California and on Adelphia, rumor has it that Charter is the expected winner of the Adelphia fire-sale here in Los Angeles, so i decided to check their pricing plans in the So Cal area... what costs you 50 a month is gonna cost me 113.95.
Here's the prices listed for SoCal Charter Pipeline (from their website):
***
Service plans (select one)
768Kb Down / 128Kb Up Bronze Package: $39.95 Charter Pipeline High Speed Internet Access, no contract. This price does not include the promotional $4.95 modem lease or the $10.00 cable access fee for non-cable television subscribers.
256Kb Down / 64Kb Up Value Package: $29.95 Charter Pipeline High Speed Internet Access, no contract. This price does not include the promotional $4.95 modem lease or the $10.00 cable access fee for non-cable television subscribers.
1Mb Down / 256Kb Up Silver Package: $60.00 Charter Pipeline High Speed Internet Access, no contract. This price does not include the promotional $4.95 modem lease or the $10.00 cable access fee for non-cable television subscribers.
1.5Mb Down / 384Kb up Gold Package: $99.00 Charter Pipeline High Speed Internet Access, no contract. This price does not include the promotional $4.95 modem lease or the $10.00 cable access fee for non-cable television subscribers.
However, if it's more than what I could get for DSL, I'll switch. There is some broadband competition even though there may not be competing cable companies servicing the same area.
On the other hand, my parents won't get broadband simply because they won't use what they pay for. Some people won't need much motivation to switch back to dial-up. Right now broadband is just becoming available to most people so demand is high. Prices will jump because of it. Once the novelty wears off and people realize how much they actually use for what they are paying, some will jump ship.
Give the market some time, it will eventually level itself out. The greedy companies will fold. Grandma will go back to dialup. And the prices will become somewhat reasonable. :-)
You are correct about lack of competition because of the monopolies. If there was decent competition in the market, the prices would level out to an even more reasonable amount.
Ascalante: Your bride is over 3,000 years old.
Kull: She told me she was 19!
I live in San Mateo (zip 94401) and I have RCN (http://www.rcn.com)
/sbin/ipconfig parameters! I was impressed. I had dealt with too many tech morons who would say 'sir we dont support Linux, or broadband will not work with Linux' :-)
- cable tv
- broadband
- phone line
for about $80/month. No contracts!
All services are _great_. Trust me I know. I have been with AT&T and other DSL providers. By far RCN is far better. I only had to contact their customer service a couple of times at start and they were very knowledgeble. The average service rep knew about
Their upstream cap is around 700kbps (that cool compared to the 128kbps by AT&T and all other DSL providers). I get about 700-1500 kpbs downstream. I just use SSH but even if I ran a small FTP/webserver they are not that anal. I have LimeWire running and people have been downloading stuff off me @ crazy speeds (e.g 100 kBps, yes with a capital B). I don't share any illegal crap, just typical opensource programs and some copylefted MP3s.
If you are in the same area, please consider these guys.
Disclaimer: I work for a large cable company. However, I spent my last 5 years running startup ISP technical operations, and I was a cable modem customer long before I started with my current company.
Having spent close to the last year working for a large cable company, I have to say that the reality of providing data over the cable system is a little different than the comments that I've seen here today seem to indicate.
First of all, the scarce resource for a cable company is not internet bandwidth. In the local network, my employer currently has 3 OC-3's to the Internet, and is converting those to OC-48's as I type this. Outside bandwidth is certainly cheap these days, and until the glut of dark fiber in the ground works itself out, this probably won't stop anytime soon.
However, the scarce resource for the cable company is the RF spectrum on the coaxial cable plant itself. Essentially, each service/channel resides in its own RF band on the cable plant. For my provider, we have a 6mhz downstream frequency and a 1.6mhz (currently being migrated to 3.2mhz) upstream frequency dedicated for every 4 nodes on our network that share these RF spectrums. Needless to say, this is *THE* bottle neck to providing higher bandwidth to our customers.
Remember also: all of our services are shared within the 850mhz range that is carried by our system.
Currently we have the following services on our system:
Analog cable: 75 channels, each one takes 1 6mhz carrier
Digital cable: 100+ channels, 6 channels per carrier
Cable modems: 1 6 mhz channel
Telephony: 1 6mhz channel
Video on Demand: 32 channels (sorry, I don't know how many carriers it takes, but I suspect a decent amount.
Reverse carriers: 50 mhz total spectrum, all communications to our systems (upstream cable modem, pay-per-view orders, VOD orders, telephony) within these carriers.
So, do the math: what causes our bandwidth headaches? Analog video. These 75 channels account for well over half the total RF spectrum we have.
Can we get rid of it? Not until every one of our users gives up their analog cable boxes and stops complaining that the digital boxes cost 3x as much (3.95 for analog, 8.95 for digital). Also not until our franchise agreements are changed in many cases to allow digital only transmission to customers.
Would we absolutely kill and die to get rid of analog and be able to do more for our customers?
You bet. In a heartbeat. Personally, I'd love to have DS-3 speeds (which is what DOCSIS will currently support) at my house cheap, plus 4 extra phone lines at a price cheaper than the local ILEC can provide. But until we are able to migrate our customers to the latest and greatest, there is nothing we can do.
Incidentally, some of the service problems caused by wide open cable systems (@Home, for one) are based on the fact that the RF spectrum is shared. If you open everyone up, one person can conceivably trash the entire node. Also, I was peripherally involved with an @Home conversion. One of the things we discovered on the routers that @Home maintained for us was the fact that they allowed the end cable modem connect at their maximum speeds, but they rate limited the network between the routers and the Internet drain during prime time to keep each router from overwhelming the DS-3's that they maintained for Internet access. Kinda dirty, letting users *THINK* they had infinite bandwidth, but barely letting more bandwidth through on the backend that a few cable modems.
I would suggest (very politely) that you find out the details of how the cable system works before whacking the cable provider over these issues.
Having been Director of Operations for 3 different dot.bomb ISP's, I thoroughly understand the differences between the two. The way I tell people the difference between a traditional ISP and a cable provider is this: When I was with the ISP's, it was like playing in an orchestra that only played music in C Major. When I moved over to the cable provider, I moved to an orchestra that only played in D Minor. It's still music, but the differences are both amazing and subtle.