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Time Warner Transfer Caps May Inspire Fair-Price Legislation
Time Warner's recently announced plan to expand their broadband transfer caps to new markets drew heavy criticism, which prompted their attempt to smooth things over with a ridiculously expensive "unlimited" plan. That wasn't enough for New York Representative Eric Massa, who now says he will draft legislation to "curb tiers, particularly in areas where a broadband provider owns a monopoly on service." Massa said, "Time Warner believes they can do this in Rochester, NY; Greensboro, NC; and Austin and San Antonio, Texas, and it's almost certainly just a matter of time before they attempt to overcharge all of their customers," adding, "I believe safeguards must be put in place when a business has a monopoly on a specific region."
I see so many articles about ISPs hiking up their rates or beginning to use bandwidth caps but what I want to know is why?
Yes, a customer who downloads 300 GB a month is more expensive than someone who doesn't but that sort of customer behavior is something that all service businesses have to deal with. I work in the webserver management department of my company. For a flat monthly rate, we will fix, upgrade, secure, and do whatever other odd jobs you want to your server. Some customers make fifty (stupid) requests per month and take up tons of our time but they get billed the same amount as the customers who only make one or two requests. But at the end of the month, both customers are getting the same level of service. How did my company figure out how to reasonably deal with this sort of overuse and underuse behavior while large ISPs can't?
Another problem I have with raising rates and imposing limits is the lack of justification. The only thing I've ever heard is "It's those evil pirates! They're making your bills go up!" Yeah, right. There was a time when illegal media downloading was pretty much the only kind of media downloading that existed but now we have Netflix and iTunes and a whole slew of completely legitimate streaming sites. So let's say I do pay $150/month for unlimited bandwidth. Where is my $150 going? I'm sure there is an answer to this and I would be much more willing to pay it as long as it doesn't include "into the pocket of our CEO". Anyone have a link to an article (preferably written by an unbiased third party) that would explain this?
Does this rag smell like chloroform to you?
Can I have whatever it is that you're taking that's making the sky such a pretty rosy color? Check their tiering structure, they didn't drop prices when they put caps on it. They won't in the future either.
If this were truly a competitive market, then you might actually see that. The problem is you're looking at a monopoly marketplace for the last mile. With Cable & DSL being the only 2 viable broadband technologies in place for 90% of the people who can get them, there isn't significant enough market pressure to force any price lowering.
Why do you think they are taking the Chicago suburbs to court over community laid last mile? If the Cable/Telco companies have to actually compete on price & service quality, then you would see low tier service at a lowered price. Until then, expect them to make low end tiers out of their normal price & rape you for using enough bandwidth to actually use anyones VOIP or Video service but theirs.
Lets see,
for electricity and water, you build the delivery infrastructure, and the costs incurred by the company are the maintenance cost of this delivery infrastructure plus production of water and electricity.
A company could build a huge delivery capacity, but the resource itself (water, power source) is limited and increasing its availability to the customer is not possible.
Internet service providers, build the last mile delivery service, pay to maintain it, then produce what which we have to pay for? capacity? capacity is not scarce because we know they can build more capacity into their infrastructure.
Reaching an infrastructure's limit in usage, especially a huge one such as theirs, would tell me that it is fully utilized. They have to make a profit at this point because most of their cost is fixed! it might take time, but they can expand their infrastructure overtime and still make a profit, so I don't think capacity is the limiting factor here
content? which makes me wonder, don't content providers pay also for internet capacity? if the capacity exists for them to provide all their content, why shouldn't it be any different for the last miles the ISPs offer? aren't content providers also end users like us for other ISPS?
Here is another thought, why wouldnt the RIAA,MPAA sue ISPs when they charge us on bits for downloaded copyrighted content? wouldn't they be technically charging us for the content which they do not own? would they also be copying portions of the copy righted content every time it goes from one router to the next? why sue people running bit torrent trackers then and not ISPs?
You speak London? I speak London very best.
Sadly, not only are they not "regulated heavily," in most cases they're not regulated at all. Municipalities used to have a lot of regulatory authority over cable operators, but a variety of deregulatory actions by the FCC and Congress have eroded most municipal control. Internet service isn't regulated either; it's considered an "enhanced information service" and thus exempt from the common-carrier regime that applies to services like telephony.
I don't see many options other than re-estabishing common-carriage as the dominant regulatory model for these services. The carriers will argue that they can't make enough money under this model to justify the investments required to maintain and upgrade their network facilities. Perhaps a workable model is to give operators a fixed time limit (twenty years after the initial license perhaps) after which they must convert to common carriage. You'd have to write the rules carefully to make sure ownership changes of existing plant doesn't restart the time period.
Data is more unlimited than water because we completely control its distribution. Water is plentiful in Chicago, for example, because it's directly next to a huge freshwater lake. In Los Angeles or Phoenix it's a much more complicated story. The middle of the US relies almost entirely on the Ogallala Aquifer, with attendant problems. Even the U.S. Southeast, which is a traditionally wet "humid subtropical" climate zone, has had a decade or so of rather severe drought-related problems. Water requires treatment; it requires physical plant; it requires nontrivial connections to every single portion of a city; it's a necessity; and a single point of failure can cause pressure loss over a wide area resulting in a very expensive repair. Bandwidth has none of these issues. It's limited only by the amount of cable the ISP is willing to run, and their hardware. Nothing as complex as aquifer physics is involved.
First they sell 'unlimited internet' for a "lowish" monthly fee like $30. Then they collect a bunch of subscriptions and don't funnel sufficient amount into R&D, so they then create the idea of 'scarcity', so they can implement 'caps' (pre-emptive strike against being able to sub to an "on-demand" download HD movie service" for more than 1 movie). Now they re-introduce the old unlimited at the new shiny price of $150.
Like cell service. Reasonably usable plans were available for $29-$39 dollars. Then it was $49, now it's closer to $59 or
$69 if you want, say 10 hours a month of unrestricted call-time.
Unlike computer services which used to be priced in 5-15$/minute of cpu time or hour of computer time that eventually fell to
too small to be metered. This was the effect of innovation, competition and progress.
Now, we see the opposite effect of little or no competition and low innovation and low progress -- the companies divide up
their current 'offerings' into smaller chunks to give smaller amounts for the same price while 'quintupling' the price for
the old service.
Sounds like a ~ 400% price increase for the same old service, or "500% inflation". Someone asked for items that have increased
by large amounts (much more than the published rate of 'inflation')...it's not all items at the same time, but a 5x jump for
unlimited computer download access might qualify as an example of excessive inflation -- either that or gouging... Why?
Because they can.
Free market capitalism becomes corrupt when a few people (or pseudopeople(Corps)) buy up the market. Seems like corruption is the natural consequence of capitalism. It's even being acknowledged that the pay-for-performance system in place for financial was one of the main factors leading to the systemic abuse, fraud and corruption that is slowly falling out as people's abuses are falling out of the woodwork as deleveraging and the Fed's mantra of "constant-inflation is good" mantra is running into problems.
It's unrealistic and a systemic abuse to constantly inflate the currency as the Fed has done and has stated as one of its guiding goals -- not keeping inflation 'in check', but always making sure there is some inflation around 2%/year. The idea of 'deflation', was so scary, recently, that the Federal Reserve "printed" hundreds of billions of dollars over last fall just to inject into the economy to stimulate inflation to counter the economy's contraction. Rather than allowing natural deflation to occur (as happened in the stock market to some extent), the dollar should have been allowed to contract by 3-4% as the economy
contracted. Instead, they print more paper, so each dollar becomes worth less (inflation) to counter the natural contraction.
When the economy rebounds, there will be so much money in the economy, we risk an unpredictable rebound. Instead of providing
stability, the Fed has its focus on constant low-level stimulation, regardless of economic conditions. Pretty stupid policy to leave in the hands of private enterprise.