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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?
See, that's the thing ... they aren't pricing themselves out of the market because the DEMAND for broadband won't diminish without an alternative and these monopolies that are springing up (or mergers, if you will) are making it so that there aren't many alternatives ... at least not widely available. I'm not sure why broadband isn't treated like phone access, long distance service, etc. The competition in that sector seems to be healthy and provides for relatively fair pricing, same with mobile phone service. If a few large providers are going to be allowed to exist, broadband should become a public utility and be regulated as such. Right?!?
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.
Demand really has surpassed capacity. Think about it, a cable modem or DSL has as much or more downstream bandwidth than a T1 costing ten times as much. They can only get away with flat-rate pricing if they can amortize it across every cable modem that shares the high-speed line they bought. MP3 programs have made bandwidth use skyrocket, to the point where too many users are downloading at the highest speed they can get 24 hours a day. The broadband companies have 3 choices here: Cap speed per user, raise the price to reduce demand, or allow the performance to decrease unreasonably when the system is over capacity. None of those options are terribly good, but option 2 is the one that will keep the company afloat.
If you want to help solve the problem yourself, stop sucking down MP3z and ISOz all the time.
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.
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You seem to have been missing the boat on the whole M$ antitrust thing. If you have a monopoly in a sectors do you know what you get? It's sure not Capitalism, the laws might be the same but it's a whole new ball game because there is no competition. When corporations get too powerful (a point where our present system is starting to approach) it's them, not the governments, pulling the strings. What if you need the broadband but the cable provider and the telco are in bed together and charging through the roof. Competition can't get in because of the monopoly so the prices and service stay at that horrid level and you still have to buy it. Unfortunatly market forces arn't quite powerful enough to keep the big boys in line anymore and they're starting to make their own rules. I don't trust governments but I'd trust a corporation with the same power a whole lot less, at least in the end the leaders of the government are directly accountable to you and not dependent on how well they are able to force you to buy their product.
I stole this Sig
I work for a telecom equipment manufacturer. Over nearly the past decade, the regional bells (RBOCs) and competitive local exchange carriers (CLECs) were stumbling over themselves trying to build out broadband networks, and they went deeply into debt to do so. Broadband equipment isn't cheap. Believe, I know! The current pricing scheme was based upon the internet-bubble business plan of "market share at any price." We all know how well that worked. The RBOCs and the very few remaining CLECs are bleeding very badly with broadband, so this was inevitable as competition decreased due to carriers going out of business. So, this is the future. The faster we get used to it, the faster the RBOCs will resume building out the network and the better off we will all be.
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.
The speed of time is one second per second.
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'
I gots ta ding a ding dang my dang a long ling long
You guys are nucking futs! Price gouging? What price gouging?
Ten years ago I was paying $19.99 a month for 2400 baud access. Five years ago I was paying 25$ a month for 28.8K access. This year I am paying $49 for 1.5Mbps access. That's an awesome deal. It's like moving from a studio apartment to a ten bedroom mansion for only twice the rent.
A Government Is a Body of People, Usually Notably Ungoverned
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.