Will Cable Unplug the File Swappers?

netringer writes "The cable companies are planning to give the RIAA's case a hand and limit P2P file swapping. Yahoo has the Business Week story that cable companies are considering going away from the flat rate pricing model for cable Internet access. They plan to set a lower bandwidth cap for the flat rate and the raise the rates for bandwidth hogs who exceed the cap."

Comments

Re:They aren't doing this because of the RIAA...

[DavittJPotter]

I'd like to see you back this up; I'm curious as to how they're losing their asses at current prices.

If you figure $50/mo for broadband, and with say 5,000 subscribers, that's $250,000 monthly in revenue. I don't know what a DS3 costs, mind you, but I can't see it being even $100,000 monthly. Equipment costs, employees, I realize, all take part of that pie, but WTF is all this money going?

'Vote' with your cable subscription

[qurob]

They started to raise rates. They started giving lower quality of service, in both uptime, and stability. They wanted to charge $5.95 a month for modem rental. No more servers. No more static ip addresses. Blocking certain ports.

What did I do?

Turned it back in. $39.95 I have no problem paying, but $67.95, for crap?

No thanks

Kill the goose that is laying the golden egg?

[countach]

If file sharing is what users want, then maybe the cable companies should subsidise the "super sharers" who are absorbing a disproportionate amount of bandwidth, in order to keep the normal users happy and able to download the songs they want. If they succeed in blocking all the music sharing, maybe the ordinary users won't pay the big fees for cable and the cable companies lose.

The Fat Cats

[T3kno]

According to this Yahoo! page the CEO of Cox makes $1.5M a year, it does not list what the chairman makes but it's up there too. The sum total of all of the officers listed is $2.92 million dollars a year, and this is only for three officers. That comes out to $243,000 a month. So one way to think of it is that the big wigs want a raise :)

Ok, let's think this through

[torqer]

Their Hardcore MP3 downloader has downed 5000 songs in two years. That's just under 7 songs a day. 7 songs at 5 megs a peice for a 30 day month is 1050. Just barely a gig.

So we have cable company's going to put caps on their service. Fine. From all the information I have seen it seems to be tentatively set at 2-3 for the lowest class of service. Leaving a sizeable chunk for other stuff as well. Looks like this isn't going to stop p2p to me.

makes me rethink my subscription

[Hooya]

well, apart from the convinience of having an always-on connection, i can't think of anything that i'd need to fork over ~$40/mo to access. i stopped 'file-sharing' a while ago and my connection from home is starting to collect dust. i'm starting to realize that there's nothing on the internet that compelling (mind you -- not talking about graphics/flash heavy sites that i avoid anyways) that would warrent such bandwidth. except for slashdot and a few other news sites that update frequently, a cron-ed wget to 'mirror' the site is a very viable solution for me. and that can happen over a dial-up in the middle of the night.

I think the cable providers are just shooting themselves in the foot. or at least the pinky-toe...

isn't napster what fueled the demand for broadband in the first place? as soon as the market shrinks even a little, economies of scale will take hold and the whole broadband thing will be in the shitter. 'twas good while it lasted i guess.

Riiiight.

[EnVisiCrypt]

And if my bandwidth gets capped, I'll get my cable modem using neighbors to go in on a T1 with me. No big deal.

Piss on the cable companies if they want to cap my downloads. That's why I'm paying twice the dial-up rate. They're within their rights to raise prices, but I'm well within mine when I go out of my way to avoid them.

I can see it now:
"Earthlink 56K, up to twice as fast as your cable modem! Upgrade today!"

Re:Cable modem providers business model flawed

[rnd()]

I too think you're wrong about this:

Companies in the bandwidth business service to homes and business (this includes DSL, cablemodems, and T1s, etc.) have always effectively been bandwidth speculators. If you run an ISP and you have 10 customers with T1s and 100 with 56K modem access, you only need to purchase enough bandwidth to cover your customers' peak usage. It is the difference in price of the bandwidth you buy vs the bandwidth you sell that largely determines the amount of profit that you make.

Depending on the kind of quality of service guarantee that you make to your customers (usually 100% bandwidth for business customers, and often no guarantee at all for residential customers) you may decide to insure against a failure to meet your peak bandwidth by purchasing more wholesale bandwidth.

The key is that when determining your pricing you need to look at the kind of QOS guarantee that you want to make vs. the expected peak and average usage for the typical customer.

As the internet changes and more people begin file sharing, expect the cost of supplying 'unlimited' bandwidth to increase. ISPs can maintain acceptable profit margins either by increasing the flat rate price or by charging by the kilobyte. The nice thing is, having access to filesharing drastically increases the value of the broadband connection, so there is no reason to believe that people wouldn't be perfectly willing to pay more. Successful ISPs will sell the increased value rather than impose a bandwidth penalty on their users. For customers who like the always on nature of broadband but don't really care about high bandwidth, the variable rate pricing will probably present a great alternative to today's flat-rate pricing.

An alternative for the cable co's: graveyard rates

[mbourgon]

Here's a thought: most of the people using the service do so from 6-10pm. Why not make some sort of access available only during the middle of the night, when no-one else uses it? I think it would be a win-win proposition if I tell my computer "download all this, be done by 6am" and walk off. The heavy use doesn't affect any of their normal customers, the bandwidth guys get their bandwidth, happy happy joy joy. Granted, I'd have to find some way to automate what I want to grab, but I could cope.