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?

Comments

Two sides

[Indras]

For the pessimists:

Short-range communications, such as LAN technologies, roughly follow Moore's law. We have gone from 10Base2/5/T to 100Base-T(X) to 1000Base-T/FX and so on. Wireless went from 11Mbps to 54Mbps, and Linksys is working on wireless with burst modes to 70Mbps. Prices on existing technologies keep dropping, and new technologies take the place of those that fell out. Common sense.

Long range communications do not. If it did, our bandwidth would be improving every month, and/or cost of service would go down every month. Actually, once you have your connection via cable or dsl, your bandwidth is most likely going to lower, due to extra users hopping on the network in your area, and prices will rise due to higher costs to maintain a larger network and regular old inflation. This is the opposite of Moore's Law.

I think this is what has me, and many others, a little disappointed, and possibly even angry at telephone and cable companies.

For the optimists:

This is the way I look at it: if I wanted to make a direct connection between two computers that were in the same room at, say, 15Kbps, it would cost me about ten bucks for a null-modem serial cable and maybe a few fractions of a cent per month for electricity in that little cable. If I wanted to do the same thing to a location across the city _without_ the help of a third party, it would cost me a few thousand dollars to set up (for wireless, I'd need a couple towers, for standard cat5, I'd need a ton of cable, a bunch of repeaters, and a whole lot of time and effort into installation and maintenance), and a few hundred a month to maintain. Now imagine if I wanted to connect to a computer in, say, Austin, TX, from my location here in Grand Rapids, MI. The costs would be insane (like I said, no third parties, so if I wanted satellite, I'd have to launch my own, if I wanted wireless, I'd need a tower every few miles for repeating the signal, and so on).

My local ISP is providing me this service at much greater speeds (as much as 250KB/s from some web sites) to websites possibly around the world. What are they charging me? Around $45 a month.

Broadband comapnies should be more honest

[ikekrull]

About what they are ACTUALLY PROVIDING for your $50-$100 per month.

rather than say 'heres a 1.5Mbit/s connection with a 3GB cap', they should say that 3GB over 30 days is really a ~70kbps connection with a 1.5Mbit/s burst speed (which you will be charged extra for using, assuming constant usage of your 70kbps bandwidth)

Personally, i am not averse to paying for pipe. But if i pay for the pipe, then i expect to be able to use the pipe i was sold for the purpose it was sold to me without being branded a 'problem user', a 'criminal' or a 'bandwidth hog'

Why don't the cable comanies just be honest about it and sell me a 70kbps pipe for $50/month, a 150 kbps pipe for $100 a month and a 1.5Mbps pipe for $1000/month?

Maybe because it doesn't sound like a very good deal at all?

In reality, the cable/ADSL companies are simply trying to limit aggregate bandwith usage to exactly what they used to have when the majority of their customers were on dialup.

Its quite likely you would be much better off with 2 channel-bonded 56k dialups if you are a heavy bandwidth user, while it is the light users who want small amounts of high-speed net access that benefit most from 'broadband'

And then they wonder why there is so much dark fiber laying around because of 'lack of demand'