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."

Comments

Up next

[Anonymous Coward]

Unlimited water and electricity for flat rates plus a pony.

Re:Up next

[thetoadwarrior]

If you try to keep the competition out of an area the the gov should cap your fees and that's not the same as getting unlimited amounts of a more scarce resource, like clean water, for one fee.

Re:Up next

[sinrakin]

Since the subscriber has no control over the amount of data sent to him from a site (ads, flash videos and music that play automatically, etc) it's hard to see how people would be willing to accept a pricing model that charged them for data they hadn't asked for and didn't want to receive.

Re:Up next

[thetoadwarrior]

It's much more unlimited than water and if there's no competition then how can you honestly say that they're going to be the one and only good company and charge a fair price?

You'd have to be really slow to believe that.

Re:Up next

[rackserverdeals]

you think that the internet is unlimited

Seriously. We all know the internet is limited. Fits in a shipping container.

Re:Up next

[larry bagina]

cell phone billing much?

Re:Up next

[tinkerghost]

For everyone else, it should mean lower prices and more stable service.

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.

Re:Up next

[koutbo6]

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?

Re:Up next

[afidel]

Exactly, look at wholesale bandwidth charges where there is fierce competition and see how price per GB has gone down in a very non-linear curve. Contrast that with home broadband which is generally controlled by a monopoly or a small oligopoly, price per GB has actually tripled (compare dialup 53Kbps @ $10/month in the 90's to TW's lowest tier @$30/month for the same amount of transfer).

Re:Up next

[Hatta]

Any electricity we don't use doesn't have to be generated. Any water we don't drink is there for us to drink tomorrow. Any bandwidth we don't use is gone. ISPs should be encouraging the maximal use of their bandwidth and upgrading as necessary. In any other market if a business can't supply as much as their customers demand, they *expand*.

Re:Up next

[syrion]

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.

Re:Up next

[perlchild]

I saw the article summary, and I thought to myself: "Ridiculously overpriced unlimited" What are they? On crack?

However, I've yet to see a provider actually even tolerate actual unlimited usage on its network.

A lot of people seem to confuse "you don't have to wait to reconnect" with "You can use it until your modem turns another color from heat".

My definition of unlimited is the latter. With that definition of unlimited, 1 megabit per second times 3600 seconds times 24 hours, time 30 days Is some 300 Gigabytes.
I've yet to see a dataplan that includes more than 150.

However, I saw the article, and they only said "the maximum overcharge is 75 $" Not that an actual unlimited plan was that amount. They'd still throw people off much faster than this.

Re:Up next

[Maxo-Texas]

That would be a good argument except that we have examples from many areas around the world where much cheaper internet with much higher capacities are available.

Now sure- you could suggest that japan or korea are small. But so are new york and most other major metropolitan areas.

It is extremely clear that we are being ripped off big time.

It may go into city coffers as bribes/fees, or it may be going straight in the pocket of the back bone providers, or perhaps the monopolistic city ISP's.

But it is clear we are being ripped off because we have many counter examples of the same thing being done better, faster, AND cheaper all around the world.

Re:Up next

[Danse]

many phones have the ability to limit messages received, plus providers also have many options for adding blocks and such as well.

I don't see how that's even remotely helpful. I want to receive messages from people that I know or do business with. What I don't want are unsolicited advertisements being sent to me at my expense. If all the flyers and other junk mail in my mailbox were sent to me postage-due, I'd be pissed as well. Blocking all messages isn't a solution, and blocking one sender at a time won't work either. So yeah, it's a problem.

Re:Up next

[Danse]

That is a good point. And as long as they hold their monopolies, then this particular aspect needs to be regulated. That is, with respect to services that they offer over their lines, they have to behave like common carriers.

We've tried incentives like huge tax breaks to get them to modernize their networks to increase capacity, but they tend to just pocket most of that money and go right on raping their customers. I blame government corruption and incompetence for that. If you're gonna put the carrot out there, you'd damn well better have a stick too.

As long as they're allowed to have control over the last mile to homes and businesses, we're all gonna get screwed. That infrastructure should be a municipal asset where we can contract out maintenance and upgrades, and then allow any provider that wants to compete to have access to deliver service over that infrastructure. Right now we are pretty much stuck with them whining about how it's so expensive to provide service and increase capacity. That's bullshit when they've been given more than enough time and money to do so, in addition to the ability to charge duopoly-size fees already. I won't be crying for them.

Re:Up next

[c6gunner]

Yes, I understand aquifers, thanks. A good analogy would be saying that you can't get a decent fiber connection at the top of the rocky mountains.

Water requires treatment;

Data requires routing.

it requires physical plant;

Ditto. You don't really think that this webpages just magically materialized out of thin air, do you?

it requires nontrivial connections to every single portion of a city;

So does data. If you don't have a connection, you can't use it. Duh.

it's a necessity;

Which has nothing to do with the point you're trying to make.

and a single point of failure can cause pressure loss over a wide area resulting in a very expensive repair.

Guess you've never heard of backhoes cutting trunks?

Bandwidth has none of these issues

HAH!

Re:Up next

[HiThere]

No resource is unlimited. That's clear. But if they advertise unlimited service they shouldn't be able to sneak behind the customer's backs and slip on limitations. That's fraud. It's not even bait and switch, because they don't make the change until after they make the sale. (Or rather the customer has no reasonable way of knowing about the switch until after they've paid their money and gone through the effort of setting up the system. It's just basic fraud.)

Their being a monopoly just makes things worse. It means there's no feasible alternative. So people don't consider their options closely, because they don't seem to have any.

Actually, I suspect this lack of choice is fostered by the government, as it means fewer companies they need to browbeat when they want to tap the lines...but this is without any evidence. Historically it's generally because the local governments didn't want to go the the trouble of laying their own infrastructure, so they made a "deal with the devil" and granted a monopoly to whoever would lay the lines. Somebody did, and that somebody got bought up by a larger company which got bought up by a larger company...until there were monopolies over very large areas of the country. (Actually, from the point of internet service, it turned into a duopoly, as frequently the phone company and the cable company would each supply fast internet connection. Duopolies aren't quite as good at price fixing as monopolies, but they come close. I'm not counting the minor providers, like the satellite systems, as they control less than 40% of the market.) So one doesn't need to presume malice in the way the system was developed--stupidity and shortsightedness are quite sufficient. Only in how it continues to be supported does the suspicion of malice become difficult to avoid.

Re:Up next

[lamapper]

Our problem here in the US is that the entities (telcos) in charge of delivering our bandwidth, refuse to lay down a strand of glass to each of our houses (the last mile).

They typically state It will cost too much, I call BS, please force them US government as they had to in Japan. If they had the will, we would already have it. The telcos financially will NEVER have the will to give us MORE at a reasonable monthly rate. (Japan monthly rates thanks to de-regulation would be a more than reasonable place to start, especially when you consider that it costs less than $5.00 per month to deliver (2 Gigs = $1.00 or .50 cents per 1 Gbps of bandwidth, they can probably provide it cheaper than this, please do NOT accept their FUD).

I personally watched a Japanese official, on CSPAN, state that they make more than enough money as their costs are less than $1.00, the American telco executives looked a bit uncomfortable with what this Japanese NTT telco executive was admitting too. It was telling, humorous and a bit depressing all at the same time. We Americans are so getting raped and dragged over the coals via high fees, customer no service and telco industry FUD!

As you can see, at a figure roughly double Kafka's doomsday HDTV family usage figure of 1+ Terabytes per month, the total cost can be projected at $32, not $560.

Yet both Comcast and Time Warner, etc, are suggesting to be financially viable they need caps as low as 5 Gigabytes, pathetic. (Note: THIS IS FUD ) They, themselves suggested 250 Gigabytes once upon a time (which is still pathetic), but have now started quoting CAPS of less than 50 Gigabytes. I would like 1+ Terabyte of service and usage for around $55.00 per month and you the telco could still make almost double your costs, everyone stop buying the telco FUD.

If you are in an area of the US where the telcos and/or ISPs are talking about monthly bandwidth CAPS of less than 250 megabytes per month, you had better start screaming to your elected officials before you get SCREWED by them. Per BellSouth's Chief Architect Henry Kafka (note his figures are blatantly WRONG) The average IPTV user will likely consume about 224 gigabytes per month

In other words, if your cap is less than 224 gigabytes per month, you are setting yourself up to be charged a heck of lot more each month for service. Besides HD IP television, movie, online gaming and video watching, you have zero control of how much FLASH and other CSS, JavaScript that is loaded from different websites each time you access them, yes it might be small, but it all adds up. The point, if telcos had started building out their fiber since 1994 as they promised to do, over the last mile, pathetic bandwidth CAPS would be NOT be needed. But not building out, keeping the resource scarce they give themselves the excuse they need to charge you more.

Not only should they (telcos) NOT be rewarde

The real solution

[halivar]

The real solution is to get rid of government-enforced monopolies on utilities.

Re:The real solution

[fortunato]

One of the reasons for enforced monopolies is that for an infrastructure service that is considered "crucial", like electricity, phone and water you don't want the inevitable pressure to cut costs by scrimping on reliability in order to compete. That is why these enforced monopolies are, in theory, regulated heavily.

Of course, I personally don't think that precludes heavy competition with heavy regulation, but what do I know. :)

Re:The real solution

[cyber-vandal]

Yes because that's worked so well in the UK where prices have rocketed along with profits.

Re:The real solution

[Anonymous Coward]

Ah, the libertarian solution to every problem. Even the ones, which aren't the problem in question.

It might have slipped your attention, that Time Warner having a monopoly on broad-band in certain regions is not government enforced.
That is, unless you ascribe every monopoly per se to governmental enforcement.

Re:The real solution

[Whillowhim]

Unfortunately, this isn't economical. Utilities are one place where monopolies are inevitable, we just need the government to put real limits on them because they are so prone to abuse. Or heck, nationalize the infrastructure, then rent it to service providers for a fee to cover maintenance.

Based on some numbers I heard a while back, the basic problem is this: It takes about 40% of the people in an area subscribing to your cable service in order to make up for the cost of installing the wires in the first place. You'll never get 80% of the people in an area to sign up, and they'll likely never split evenly between two services if they were available, so a second cable company in the same area is just a recipe for both companies failing.

However, for things like phone service and internet access, there is a way around this problem. The "must have X% of people signed up" only applies to the actual infrastructure project, the wires to everyone's house. If there were a real split between the infrastructure company and the content company (i.e. government controlled infrastructure or government mandated breakups of current companies) then you can have fully equal access for ISPs to everyone, and consumers would actually have a choice for their service provider.

There are some issues that make this difficult and not really as straightforward as I presented, but I think it is the only real hope of giving consumers a choice. You might end up with some sort of limits from the local infrastructure, but local bandwidth limitations tend to be much less of an issue from what I've seen.

Re:The real solution

[marco.antonio.costa]

Nonsense. If that was true, then why don't we have a state-sanctioned monopoly on all foodstuffs so we don't run the risk of 'unreliable' supply? I mean, food is so crucial.

The reason for any enforced monopoly is to artificially raise prices.

If you honestly think that competition to lower prices is only achieved through skimping on quality or reliability then I'm sure you used a room-sized, vacuum-tube, multi-million dollar computer from the 60s to type your comment instead of a US$ 400 MSI Wind netbook, but then again, what do I know. :-)

When something is left to the marketplace and free competition ( i.e. "unregulated" ), consumers will choose the best and cheapest alternative. When it is left to regulation, consumers are deprived of choice on that characteristic by force of law, and if the regulation is poorly crafted ( not unusual, to use an euphemism ) then we're all screwed with nowhere to run.

Limiting competition is regulation's very goal, with several companies lobbying to make sure the final text benefits them individually as much as possible.

Re:The real solution

[yuna49]

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.

Re:The real solution

[vadim_t]

Nonsense. If that was true, then why don't we have a state-sanctioned monopoly on all foodstuffs so we don't run the risk of 'unreliable' supply? I mean, food is so crucial.

Because it's not needed? There's no problem with 50 producers competing for who can deliver the cheapest rice, because there's no problem with all of them making their products available for sale, and it still must pass government quality standards.

That doesn't work with things like water though. Would you want to have 10 sets of water pipes, with all the street digging that implies, and 10x more frequent pipe breakage? The space available for piping is very limited as well.

In this situation the way to go is not having 10 sets of pipes, but have one, highly regulated delivery network (water, power, fiber), and competition in the supply of that network (powerstations, water filtering plants, ISPs).

Done correctly, the delivery network lacks any reason to prefer or favor one provider over another, and the providers lack the ability to deny access to each other, since they don't own the delivery network. The consumer can then freely choice which they want, and the entry barrier for a new provider is low because it doesn't require digging up streets.

Re:The real solution

[marco.antonio.costa]

Granted, sorry for the broad brush there. Though I still think the best mechanism for making the best use of scarce resources is the price system in a free market. But I digress. :-)

The point you raised about California has one glaring problem: Government price controls on energy. Fixing prices below the market price leads to shortages. This is Econ 101.

A free market would naturally impose a ration on power with a high price, i.e. people reducing their consumption - with the added benefit of stimulating the supply. Price controls - and its necessary companion to prevent a shortage: mandated rationing - lacks the automatic aspect of the free market and actually DISCOURAGES new investment.

I point out that California's power fiasco as very evidence that you don't know what a free market is.

I suggest this respectfully, not like a pedantic ass, but from the interest you seem to have in these matters you would enjoy reading the book on my signature, especially the chapter on price controls. :-)

I wonder what fraction of US broadband customers

[ridgecritter]

are in a similar position, with only one broadband provider? Here in Portola Valley, a stone's throw from the heart of Silicon Valley, we have ComCast as the sole broadband provider and the lack of competition shows in the prices. It's crazy - my neighbors and I would switch to DSL in a heartbeat if it were available. Wimax can't happen too soon!

Caps are about broadband video

[sdo1]

These ridiculous caps are all about cable companies protecting their becoming-outdated business model. Right now, they charge for content (HBO, various extra channel packages, etc.). Customers getting high quality video (for some definitions of high quality) from places like Hulu is eventually going to eat up the cable monopoly cash cow that Time Warner Cable currently enjoys. So how do they stop it and protect their outdated business model? Caps. Insanely low transfer caps that all but eliminate high amounts of streaming video and that protect their cable company business.

If there's a reason the gov't should step in and put a stop to low transfer caps, it's this.

-S

Re:Caps are about broadband video

[DaveM753]

Right on! The government needs to FORCE both the cable and telco companies to separate the data, television and telephone components. They should be regulated as separate companies and therefore separate monopolies. Grrrrr...

What I have in Western Washington (near Seattle) is Comcast and Verizon. They both charge basically the same price for all services. If there were TRUE competition, i.e., many different companies, there's NO WAY they'd be able to charge such high prices without losing customers. But, since there are only 2 companies, they basically have all the benefits of collusion, without any actual collusion. I mean, if one of them decided to charge some arbitrary fee, the other one would follow. Double-Grrrrr....

Re:Caps are about broadband video

[daVinci1980]

I think you're right on the money. A friend of mine also pointed out that this is also a kindof backdoor to a tiered internet.

Imagine that if everyone had caps, TWC and others could go to netflix and say "you know, for only 1% of every customer's signup fee, we'll avoid counting bandwidth you send against our customers", and then announce the partnerships and how you can watch Netflix streaming on their service "for free".

I can't wait to replace TWC. As soon as I find a provider in my area who isn't TWC and isn't AT&T, I'm so there.

America against Bandwidth Caps

[bluesatin]

Is it just me or do I find the complaint against Bandwidth Caps ridiculous?

I only seem to see people complaining about it in America, most of Europe (afaik) has gotten used to having bandwidth caps. For example in England I'm with the ISP wholesaler Entanet, you have your on-peak bandwidth (mon-fri 8:00am to midnight) and then off-peak is free to use as much as you want.

The reason it annoys me is that everyone is complaining about having their bandwidth shaped, and the cause for that is there is too much bandwidth being used (the companies obviously aren't going to increase their limits as shown by previous experience, and it's unrealistic to expect the ISPs to allow every single person their full bandwidth 24/7 anyway).

So if they're not going to expand their limits, the only solution is to reduce the amount of bandwidth people use, thus reducing how much people 'waste' it.

I just don't get why people are opposed to bandwidth shaping while the only way the ISPs are going to be happy solving this is to introduce bandwidth caps, and besides it's better having the bandwidth caps out in the open rather than having undefined 'unlimited' packages.

Re:America against Bandwidth Caps

[japhering]

It is not so much the caps.. it is the fact the the rates are 3-5x what people are paying now which is, antidotally, 2-3x times what most people around the world pay. Caps wouldn't be so bad if everyone got some benefit.. as it is it is just an excuse for the ISPs to grab a 3-5x price increase.

Re:America against Bandwidth Caps

[jim_deane]

I pay X amount of dollars to have Y data download rate (and Z data upload rate). My ISP advertised the rate, I bought the rate, that's what I expect them to be able to deliver "most" of the time.

Now, if they want to put a cap on my useage, say C gigabytes per month, then if that limit is less than (2592000 s * X bits/s), I expect my useage fee to decrease proportionately to however much smaller my new download limit becomes.

DECREASE. Not increase. They will be taking away value that I expect based on the advertised service. I expect to pay less for less value.

Re:America against Bandwidth Caps

[Devout_IPUite]

These caps don't seem to have anything to do with peak time usage. If the caps were only on peak time it'd be something different entirely.

Re:America against Bandwidth Caps

[bluesatin]

I realised just after I posted my original rant that there may have been a good reason why everyone was against Bandwidth Caps.

From what I've read it seems the major ISPs in America try and hide as much as they can from users, rather than try and teach them about things. I can imagine they'd make it extremely awkward to check your current usage, while my ISP (Entanet) in the UK has an RSS feed you can use to check it.

I can also imagine they'd make all bandwidth count towards your cap, not only when bandwidth is at a premium (in the day when people want quicker speeds).

Re:America against Bandwidth Caps

[thetoadwarrior]

England still has the problem of companies offering unlimited bandwidth that doesn't exist. There is a clear abuse of the word unlimited amongst ISPs.

I'm fine with caps when I'm told what I get for what I pay for and not "hey we're giving unlimited bandwidth but oh hey don't use more than 2 gbps per month and we'll shape the shit out of your traffic between noon and 9pm".

ISPs should be forced to advertise only what you get and tell you what they do to your traffic so you know exactly what you're getting. If they do that then fine, put limits on it. I fully understand that limits need to exist.

Re:America against Bandwidth Caps

[spire3661]

The main problem we have with it is the industry should be providing MORE service for less money, not the opposite.

Re:America against Bandwidth Caps

[JakFrost]

So if they're not going to expand their limits, the only solution is to reduce the amount of bandwidth people use, thus reducing how much people 'waste' it.

The purpose of a Data Usage Cap is to increase profits out of thin air by creating a new metric for billing. You're gravely mistaken if you believe that a Data Usage Cap has anything to do with actual usage since there is no scarcity for bandwidth and there are no bottlenecks that need to be unblocked. This is all simply a marketing device being implement to increase profits and has nothing to do with capacity control.

Re:America against Bandwidth Caps

[Anonymous Coward]

In the country with the biggest European economy, Germany, bandwidth caps are unusual, at least for wired network access. Whenever a company tries to impose bandwidth caps despite calling the service "unlimited" or "flatrate", it turns into a public relations disaster. Germany has a heavily regulated telecoms market where the former state monopoly, German Telekom, must offer several kinds of wholesale services to competitors at regulated prices, so even though there are only Telekom owned last-mile wires in most places, the customer can choose from a number of DSL internet providers. This is where competition is important: The last mile connections are not congested. Basically each customer has an exclusive connection to the central office, and from there it is feasible to have competing network operators for the actual internet service. What the US should do is to force local monopolies to offer access to the last mile at a price which is lower than the lowest of their own plans which makes use of that last mile connection. The competition can then sell their own backbone uplink capacity cheaply with a high contention ratio or provide always-fast connections for a higher price. The market will decide what the customer really wants and what he's willing to pay for it.

Re:America against Bandwidth Caps

[Selanit]

I'm in Austin, so I stand to be affected by this in the near future.

I wouldn't be opposed to a metered plan if it was really a metered plan.

The electric company doesn't care how many toasters I own, or how often I make toast, or anything. They charge me an activation fee when I start service, and then they bill me for the electricity I use. THAT is a metered plan. If I could do that with bandwidth (at a reasonable rate per GB), I'd be perfectly happy.

This Time Warner crap is NOT like that. They want to charge me an activation fee, a monthly usage fee, AND a dollar per gigabyte for every GB over their arbitrarily imposed limit. That's NOT cool.

The basic point of the pricing structure appears to be to control my behavior online, and it irritates me no end.

Re:America against Bandwidth Caps

[Todd Knarr]

No, I wouldn't. But if I go in to that restaurant and start eating and, after 5 plates, they tell me that they won't give me any more, that I've reached my cap, then yes I will expect a refund. They didn't include a 5-plate cap in what they offered, it isn't included in what they offered. If they want to change the deal to something that does include it, then you better believe I'm going to want to change my end of the deal too to reflect what they're offering from their side.

The difference between TW and your scenario is that in your scenario the consumer's deciding not to use all he's entitled to, with TW it's TW deciding the consumer won't be allowed everything he's entitled to.

Re:America against Bandwidth Caps

[Draconix]

Uh, I don't think you understood what you're replying to. Your analogy applies to pre-cap service, which no one was complaining about. To further your analogy, the addition of the caps is like having gone there for years and typically eaten 2-4 plates, then one day they take your plate away after you've finished your first helping, and tell you there's a one-plate limit. Suddenly, it doesn't seem like nearly as good a deal.

Re:America against Bandwidth Caps

[Jeff DeMaagd]

I think there was a fundamental problem with the marketing of broadband which either poorly communicated the intent behind the term "unlimited", intentionally misleading, or they didn't expect that people would actually try to use the service as if it was unlimited. The companies claim that "unlimited" meant "always on", as in, you don't have to dial in or disconnect. I can understand that, but given how it was marketed, I think it's more like the marketing was intentionally misleading.

Frankly, I had no problem with a 250GB cap, but most of the lower caps was putting the squeeze on heavy users of legitimate media.

I also don't trust these companies either, my expectation is that they won't offer an easy way to track their use, won't tell the users if they're about to go over, and tell people "tough nuts" if they go over and charge a high rate per kB.

Another problem is the monopoly systems here, for each kind of connection, you're basically only allowed one provider to serve that kind of connection for the given area. Despite the fact that public right of ways are used to string these wires, I don't see why they shouldn't be required to lease those lines out to other ISPs. Many areas might only be served by cable, others, only by DSL, if you're really lucky, you might have a choice of cable & DSL, but only one provider each. If you're really lucky, you might have a fiber internet option. Then there's the lesser options such as wireless/cellular, satellite and modem. So it's not something that I would call a competitive arrangement.

Re:America against Bandwidth Caps

[dnaumov]

Is it just me or do I find the complaint against Bandwidth Caps ridiculous?

I only seem to see people complaining about it in America, most of Europe (afaik) has gotten used to having bandwidth caps.

Are you out of your mind? The reason why you see people complaining about it in America and not in Europe is because a lot of European countries do not have any kind of download caps whatsoever so we don't have to complain about it.

Re:I wonder what fraction of US broadband customer

[peragrin]

Since the majority of the USA have only one cable provider I would say the majority. Local governments have been granting monopolies for decades. As they upgraded to high speed internet. you get cable and random pockets of DSL. I day random as I can't DSL in my home though people within 2 miles of me can.

Prices

[khellendros1984]

I understand that there are prices to data throughput, and that maximum throughput correlates with bandwidth. The service providers built themselves a losing battle, though. If they start selling tiered plans, then people will feel limited (even if they never went over 10GB/month before). People that are the heavy users (over 50 GB/month, say) have seen their access available at a certain price point for a long time will feel ripped off when it suddenly jumps to 3x what they have been paying. For instance, I pay $45 per month for a 10mb pipe. I probably do 20-30GB just with tv shows (streaming or downloaded), and my roommate does similar. In the new plan, I'd end up with a higher cost, even though until this point my usage has been acceptable (no warnings, etc). My point is that by subsidizing more expensive users with the money from people that use less, while providing "unlimited" service to people that don't use that much data throughput, they've set themselves up for disappointment in all of their markets.

America can have the Australian experience!

[David Gerard]

Your Internet can feel like the Australian one.

Common Sense

[Renraku]

I don't see why this wasn't enacted many many years ago.

Comcast, for example, would buy all of a region's smaller cable companies and make them fly the Comcast banner. Then prices would jump 20-40% in the next year. Usually the buy-outs would have to be approved, and would be approved under the condition that Comcast provide similar service for similar prices.

Granted monopolies need to be policed like this. This isn't a case of other companies not wanting to bother with the cost and time to set up competition.

This is exactly what Time-Warner was banking on. You don't see cell phone companies deciding that unlimited text messaging is no longer unlimited, or that your 500 minutes isn't sustainable, so now you get 200 minutes. Mainly because cell phone companies have competition everywhere. If you don't like Sprint, try US Cellular or Verizon. Maybe even T-mobile. They all have their ups and downs, but more importantly, there are alternate choices. ISPs aren't always that way.

Hourly-fee dial-up ISPs went away pretty quickly once competitors started popping up. I think most broadband ISPs were starting out at the unlimited level to compete with dial-up ISPs, and now that the dial-up ISPs are no longer a threat, they want to reneg on the contracts they made us all sign. Not our fault your business model wasn't able to be supported, now honor our damn contracts.

Re:Common Sense

[BitZtream]

Not our fault your business model wasn't able to be supported, now honor our damn contracts.

If that were true, I wouldn't be so bothered. The reality of it however is that they are making a killing in profit NOW with 'unlimited' service. The business model is fine, they've just beaten every other ISP out of the market and now how no competition (as you said) and are coming up with new ways to rip people off.

Why Higher Rates?

[TheRon6]

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?

Data Usage Caps = New Profit Center

[JakFrost]

These Data Usage Caps are just a marketing tool instituted by the company to create a new Profit Center basically out of thin air since there is no actual cost difference for the amount of data that you transfer once the infrastructure has already been built and connected. Yes, there are costs associated to bandwidth when dealing with up-stream ISP connection contracts but in these cases these Data Usage Caps include all data, even local network data, or P2P data coming from neighboring peers on the same internal Time Warner network.

These caps are the equivalent of mobile phone companies charging you usage minutes for calling your voicemail box on their own network to check your message, even though you might have a phone plan with unlimited domestic calling or unlimited mobile-to-mobile calling that should cover in-network calls. (If you didn't know this, check your own phone bill minutes usage.)

These Data Usage Caps are just there to cut off the most demanding users, most of which are computer savvy hence their large usage, and to penalize them for their usage to force them to pay substantially more or to force them to terminate their service. Currently these users are probably very few but with the growth of streaming high definition video content becoming more common these caps will start to become bottleneck for average users in the upcoming days.

This is the equivalent of medical insurance companies putting a maximum yearly usage cap on benefits, penalizing those people who are most in need for insurance coverage for catastrophic medical events to force them to suffer from lack of funds for medical services or to force them to discontinue their insurance coverage since it stops providing any coverage. (If you didn't know this, check your own medical and dental insurance cap per year.)

These data usage caps are a symptom of today's social and economic lack of respect for the consumers by the companies who service them and they are the result from the lack of consumer wisdom or caring about the service that they are getting.

Any legislation that is passed short of banning data usage caps will legitimize this practice and the days of per-minute charges will be back in the form of per-megabyte charges. If this economy continues on the path that it is going and start really hurting people in the pocket book then maybe we'll see some real action to stop these kinds of anti-consumer practices, but if the economy doesn't slide down too far then this type of behavior by companies will stick and become "the norm".

Re:I wonder what fraction of US broadband customer

[Shadow of Eternity]

you both probably get better and faster service for both TV and internet than I do with Embarq and shantel. We've got no cable option for internet and embarq's had a monopoly here since before it was Embarq, the wires are literally disentegrating and calling for support on anything will half the time get you hung up on because they have no need to do anything to keep you as a customer.

Re:Complaining when you got what you asked for

[morgan_greywolf]

No. That's just completely wrong.

Look at this way: If [insert favorite food vendor here] advertised filet mignon at $0.50/lb, even though I know there costs are higher, I better damn well be getting real filet mignon at $0.50/lb. Internet connectivity is no different.

Don't advertise unlimited if it's not unlimited. If you are advertising a 6 Mb pipe, it better be a 6 Mb pipe. That's that. 6 Mb, unlimited. Your costs are none of my business.

Long story short: don't write no check your ass can't cash.

Re:Complaining when you got what you asked for

[penfold69]

One of the tech gurus at my local ISP posted an excellent thread which details how UK ISP's are charged for their bandwidth.

It is certainly UK specific, but it does go into some depth as to how and why there are bandwidth limitations on ISP services in the UK. By far and away the most expensive part of the connection is between the Customer and the ISP, and not between the ISP and the Internet.

The blog post is available here. Makes for some interesting reading.

Re:Complaining when you got what you asked for

[Jewfro_Macabbi]

From Time Warners' financial filings:

"High-speed data costs decreased for the three and nine months ended September 30, 2008 primarily due to a decrease in per-subscriber connectivity costs, partially offset by subscriber growth.

"In 2007, TW made $3,730 Million, on high speed data alone, and then had to turn around and spend $164 Million to support the cost of the network. 2007 total profit on high speed data: $3.566 Billion"

"In 2008, TW made $4,159 Million, on high speed data alone, and then had to turn around and spend $146 Million to support the cost of the network. 2008 total profit on high speed data: $4.013 Billion"

Stop shilling for corporations. Clearly the unlimited broadband model has been extremely profitable.

Wake up and smell the non-corporate content suppression.

Re:Complaining when you got what you asked for

[BitZtream]

Bandwidth and infrastructure does cost money.

But heres the reality. In the Greensboro area (where I live and know what goes on at the TWC datacenter) they charge approximately 100 times what it costs them to provide the bandwidth and infrastructure.

We complain because some of us who work in the industry know how much bullshit the prices are and more importantly we know for a fact that their traffic shaping and caps are not because its expensive, they are because they simple do not want to pay for the bandwidth they've sold.

The infrastructure they have is more than enough to support much more bandwidth with the switch to DOCSIS 3.0, which they are already doing.

The only limit is the pipes from them to the rest of the world.

When they drop services, they don't lower my price.

Why am I still paying the same price when they outsourced their news servers and put the entire north and south carolina region on a single link to giganews which was saturated during the TRIAL PERIOD, before the moved everyone on to it. It was never upgraded, users just get slower and slower news service, and they spend less and less, and I still pay the same thing.

Until you actually know what you're talking about, don't try to convience those of us with a clue about how much it costs to run a network. Some of us have done it and know its bullshit.

Their prices are hardly fair, take a look at their rate plans, do the math, compare them to what a normal business pays for unreliable service like the provide to the home, then get a clue.

Re:Complaining when you got what you asked for

[DJRumpy]

Because cable companies have increased their rates at about twice that of inflation for years. My bill has gone from $40 dollars for a platinum package (all channels) 10 years ago to $150 for silver package and far less service than I had then. My internet speed has been increased by 2.5 Mb/sec in 10 years as technology advanced (when they switched to fiber a few years back).

In addition, these companies took millions of dollars in funding from the government to improve their infrastructure for just this very reason. To plan for future capacity. They did nothing with it other than spam additional channels in tiered packaged that no one wants and are now overselling internet bandwidth (according to them) even though I never see a slowdown and haven't for years, even before fiber.

On top of that, they have a monopoly in most areas where people who want broadband have no choice but to pay if they want to retain anything other than dial-up. They expect me to pay what I pay now for an unlimited plan, with cable and premium channels, just for the internet access I have now.

It's obvious they are doing this to prevent competition from sites like Hulu. With the internet, you really don't need cable tv. Given a good pipe and content providers offering up content directly, it severely compromises their business model. This technology should be dirt cheap these days as usually happens with wide adoption, yet the price for broadband keeps skyrocketing. There is no where near enough competition.

Cable companies have been gouging consumers for years with anti-competitive agreements with local municipalities that prevent other telecoms from entering the scene. If I had another option, I'd take it in a heartbeat. Perhaps this will put some regulation back on them until there is competition or at least an environment that fosters competition.

Re:Complaining when you got what you asked for

[Kaboom13]

It's not the fact that heavy users pay more that bothers me so much, it's the details of it.
1. The connections at the isp are sold by speed, not total data transferred. SO it seems highly questionable when cable companies repeatedly bump everyone's speed, then at the same time introduce caps. Furthermore, they need the pipes to support peak load, but at non-peak times they have lots of excess capacity. Yet the caps don't take this into effect at all. It seems a much fairer way to do it would be to adjust for the % of your connections speed you are using as well as the time of day. A voluntary cap at peak times in exchange for extra bandwidth at low load time would save the isp money and provide most heavy users with all the bittorrent bandwidth they could use.

2. The reporting tools on your cap usage are generally either non-existent (if you are lucky enough to even have published caps) or extremely basic. Unless you have the equipment and technical know-how to set something up yourself, you are generally left with a very rough educated guess at how close the cap you are. And if you do monitor it yourself, and have a discrepancy with the ISP's monitors, there is no mechanism for contesting or debating it.

3. The overage fees are always ridiculously out of sync with the extra costs involved. Considering that presumably your basic subscription pays for all fixed costs, such as maintaining the physical connection and networking, billing, tech support, etc. the only difference between a user at the cap and a user at double the cap is the extra bandwidth used. Yet the fees are often so high at to be ridiculous. $1 per gigabyte? You mean to tell me after all the fixed costs have been paid for, it costs them $1 per gigabyte? If that were true, there is no way they could be making a profit off regular subscribers. It's obvious this is not a "pay your fair share" price. This is an extortion price. They know heavy users make them less profit (the downside of a fixed rate "unlimited" model) and they know the grandma's of the world want a flat rate price even if they never use more then 5% of their capacity. So the caps and ridiculous fees are a way to slant the table in their favor, chasing off heavy users while still maintaining the pretense of flat-rate prices. They know in many areas they are a defacto monopoly, so if they were to just tell people "No we won't sell our service to you" they would be in trouble. So they create pricing policies that have the same effect.

Re:Complaining when you got what you asked for

[Renraku]

Why are you paying more?

Because you and others are willing to pay more for less. The market will continue to go in this direction until enough people drop service to make it unprofitable. They'll find the high point on the profit/effort graph and go with that price.

I don't think its a bad thing for companies to want to profit, but I DO think its a bad thing for them to offer less and charge more. This is the opposite of progress.

Re:Complaining when you got what you asked for

[myspace-cn]

EXACTLY!!!

1. Hellish TOS/AUP
2. Data Caps
3. Blocked Ports
4. Newsgroups

While Big Media consolidates, they now execute the cinching down of grassroots alternative communications.

It's TIME WARNER
it's COMCAST
it's AT&T

It's all about moving everyone to a "Certified Identity", Controlled Content, zero privacy, no constitution without big money, no choice for the middle class.

What are customers going to DUMP TW? no.. They HAVE NO CHOICE!

CEO Says one Thing Their SEC Statements Say Otherw

[Bruha]

CEO of time warner said that broadband costs are spiraling out of control.

Their SEC Statements for 2008 said YOY operating costs for their broadband service decreased 11%. It also netted them nearly 4 billion dollars in revenues.

In 2007 they also reported decreased operating costs and massive profits.

I'd love for that asshole to testify to congress the same thing, cause I'm sending my congressmen their 10K statements. Maybe a CEO going to jail for blatantly doing nearly the same shit bank CEO's and other officers have been doing will finally wake these people up.

http://stopthecap.com/2009/04/10/why-is-time-warner-saying-costs-increasing-to-consumers-but-decreasing-to-stockholders/

Fifteen years ago these thieves ....

[Jerry]

lobbied Congress with perks and "campaign contributions" to kill initiatives to install fiber optic cable as a community service/commodity, claiming "unfair" competition. The telcos promised they would complete buiding the fiber optic future in the 1990s, got tax breaks and rate relief to the tune of HUNDREDS OF MILLIONS, pocketed the cash and then promptly forgot their promise. I still have UNUSED fiber optic cable running through my yard from our canceled community project. As a result, I have to pay $72US for 10Mb/s bandwidth and TimeWarner and the other cable/Telecos are constantly trying to think up new ways to create artificial scarcity of bandwidth in order to charge more rent for an outdated wire pipe. These thieves have PROVEN in the past that they cannot be trusted and are too greedy to be given the opportunity to steal again.

It's time the people took back control of the Internet, complete the Fiber Optic (or better) technology and make it a service like electric, water and sewer, cheap and affordable to EVERY house.

Re:Complaining when you got what you asked for

[nabsltd]

I work at a relatively small ISP, and our Internet circuits cost us $50-75/meg (plus we have multiple paths for redundancy), and that doesn't include our infrastructure (routers/switches, UPS/generator, A/C, people, etc.). If you want a guaranteed 6 meg pipe, you shouldn't expect to get it for $99.

You—like many other people—are confusing "speed of pipe" and "number of bytes transferred".

We know your ISP doesn't pay $50 per megabyte transferred, because you'd have to charge customers thousands of dollars a month for the equivalent of dial-up access. You might pay $50 for each megabit/second of pipe you want to the Internet, but if you do, you are getting severely overcharged.

If you sell me a 6Mbps connection, then, yes, I (and everyone else) expect to be able to use all 6Mbps twenty-four hours a day. Most users probably won't use it 24/7, but they all expect that whenever they get on the Internet, then that's the speed they'll get.

Your costs don't change if people do use their connection to download 24/7, because all peering agreements are based on transit out of a network. So, you don't want people uploading a lot, but downloading is essentially "free", since there are no costs beyond the price of the pipe, and that is charged based on the max speed, not the number of bytes transferred.

Last, there are ISPs that realize everything I have said is true, and manage to provide the full speed that was contracted for every hour of every day, with no limit on the total bytes transferred, all at a reasonable cost. And, those ISPs aren't losing money.

How about enforcing competetion instead of prices?

[kroyd]

In Northern Europe the telecoms are forced (by regulation) to rent out space in the switches so that competitors can place their own equipment there. If you're not buying your internet from the "owner" of the telephone cable you pay less than $10 as a line rental fee in addition to whatever your provider charges.

It is the same with mobile phone services - the telecoms must share their network with competitors, and allow them to put their services on the network. This means that if you're a customer of a "virtual phone company" you might use the bandwidth of "big telecom X" until some box in their network, from there it is the virtual phone company which controls your call.

In addition, all providers of internet, mobile phone services and landline phone services (including IP telephony) have to provide their pricing and coverage information to a government run web site, so that it is really simple to check if there is a better deal on the market.

Of course all the providers are endlessly complaining, but the effect is that the market works, you get lots of providers, low prices and lots of services to differentiate, even out in the really really remote areas.

With working competition you only see transfer caps on services where it makes some sense, like during the daytime for internet by 3g. (And I could get up to 50mbit/10mbit for $60 a month if bothered to switch it seems.. I hadn't checked the pricing site in a few months.)

Re:CEO Says one Thing Their SEC Statements Say Oth

[The Analog Kid]

Hmmm, perhaps shareholders should be filing complaint with the SEC for possible fraud if the CEO is saying two different things about costs.

Re:Complaining when you got what you asked for

[DJRumpy]

I would really love to see the telecoms pipe separated from the cable television. Force them to rent from the telecom companies while ensuring that the Telecom companies themselves couldn't get a monopoly on entire regions.

Better yet, have each city pay and build out the fiber network and treat it like a utility to the content providers. That would open up the industry to competition as they wouldn't have to own and/or build the pipes to deliver their content, it would regulate the cost of the pipe itself, and the taxpayer would eventually earn back the cost of building the network via the rental to the cable/internet providers. It would also remove a huge barrier to new competition entering the area as they won't have to build out their own fiber lines to compete.

Sounds like a pipe dream though...(ouch..bad pun)

Re:Complaining when you got what you asked for

[QCompson]

Stop shilling for corporations. Clearly the unlimited broadband model has been extremely profitable.

Bears repeating. In bold.

Re:Complaining when you got what you asked for

[DarkProphet]

If those are really the annual net gains then it boggles my mind why they wouldn't start upgrading and building out infrastructure and taking more tax writeoffs. They would simply have to pay for their own network, write off the costs, and reap the long-term benefits of their shiny new network. Hell, they might even reduce the average customer bill and still make more money by gaining more customers. I am missing something here-- is this a simplistic view, or are ISPs simply too greedy to bother investing in their own future?

inflation;price hikes; capitalism & fed corrup

[lpq]

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.

Why caps can be good

[trawg]

I know you guys are scared to death of caps, but I just thought I'd take the time to point out a few reasons why they can be GOOD things, and not necessarily all bad. (I realise that it seems the US has been screwed by big telcos taking money from the govt and not investing it into infrastructure as it was intended, etc.)

[disclaimer: I work for a company that, for almost 10 years, has tried to provide Australian ISP subscribers with the content they want to have]

Here in Australia, we've had caps for a long, long time. The most common cap originally was 3 gigabytes - so imagine how lame it was for us. Of course this was pre-BitTorrent/YouTube/etc, so it wasn't as big a deal as that limit would be today.

Now, a common plan is 12GB (I say 'common' because while there are plenty of plans, the biggest ISP here, BigPond, has its 'default' plan around 12GB, or at least last time I checked - it's certainly what I'm typing this on at my parents place).

Because of these low data limits, there has been fierce competition between ISPs to provide "content" - mostly consisting of mirrors of popular stuff, such as files relating to gaming, open source, etc (more recently Creative Commons-licensed video like the Revision3.com stuff).

So anyway, some of the good things:

1) Many ISPs will maintain their own mirrors of popular content - meaning subscribers can get fast, local downloads (that typically don't count towards their monthly cap). Here in Australia we have a very high ratio of availability of Linux distributions vs # of customers, for example.

2) There's less congestion as users don't randomly leave their software connected and torrenting 24/7. This is good for people like me that prefer speed and responsiveness and don't want to have to worry about a heap of people torrenting last nights episode of Australian/American Idol chewing up all our links.

3) The above two cause lower congestion on our heavily-contested international links, helping keep costs lower overall for everyone (this is less of a big deal for the USA, but we're pretty far away from a lot of digital stuff people want).

4) Many ISPs will run their own local gaming services - even if its only a handful of game servers for popular games. This means fast pings and unmetered traffic - and more variety and competition.

5) Many ISPs will run their own unique content services. BigPond, for example, has a music channel (www.bigpondmusic.com), which offers discounts to subscribers. Internode, another ISP, provides free access to commerical USEnet services. iiNet provide Premier League video streams. All sorts of cool options.

Of course, all these are almost utterly dependent on network neutrality, which has (thus far) been maintained perfectly.

I obviously have a fairly biased perspective because of my involvement in the industry as a data-peddler, but I don't think capped plans are bad. The vast majority of people aren't going to notice.

I would say though that if they're going to /force/ all users to act like 'average' users in terms of bandwidth, there should be a general reduction in price across the board to match the savings they're going to make. Dropping the price for those users that are happy to stay on low plans and leaving it the same for those users that want to have a much higher cap would seem to be much fairer. However, given how big telcos operate, I'd say everyone is just likely to get screwed, and as I understand it many places in the US have a monopoly-type situation on broadband availability - so good luck :)

freemarkets

[falconwolf]

Free market capitalism becomes corrupt when a few people (or pseudopeople(Corps)) buy up the market.

That is not a freemarket. A freemarket is a "free market". If I wanted to and had the money in a free market I could have cable or fiber optics lain down to provide any and all services it could handle. But there is no free market. Instead the telecos and cablecos try to block competition by blocking access. The radio and TV broadcasters do the same with the airwaves.

Seems like corruption is the natural consequence of capitalism.

Corruption doesn't apply to capitalism any more than it applies to communism and socialism. Anything and everything, including churches, mosques, and temples are susceptible to corruption.

Falcon

Re:freemarkets

[Wildclaw]

"You should remember that "free market" is an agenda-riddled ideology, no different then, say, Communism. Some of its tenets work, some of the time, given certain conditions, but it is not an All Encompassing Divine Solution To Everything And Anything as some would have it."

So true. And it is sad, because the free market is one of the more powerful tools realized in the human history.

But if you only have a hammer, every problem will start to look like a nail. And to extend on that. If all you have is a hammer and a broken saw, that doesn't mean you should use the hammer to split the plank. Instead you should fix the saw or get a new one.

Re:freemarkets

[Touvan]

I think GP should have said the natural consequence of capitalism, is that it easily lends itself to abuse in the end. Once a few or a single company owns a market, there are no market forces keeping them in check. The free market doesn't account for that scenario, despite desperately repeated talking points. So yeah, capitalism doesn't own corruption, but without some kind of system of fair rules, coupled with enforcement, it does lend itself to corruption quite easily.

I'll also note that capitalism does some things quite a bit more efficiently (and therefor maybe better) than the other economic systems - but each economic system, like each political system, has it's benefits, and I don't see why we constantly feel the need to apply one system to everything in an ideologically pure way.

These systems are human social machines - tools we can use to gain a benefit. Why don't we use the appropriate tool where they are needed. When the market based system stops working well, that's when it's time to either hit the reset button (break up the cartels and monopolies - refineries and energy companies come to mind here), or to regulate them (in the case of vital infrastructure, like roads, police, healthcare or the internet).

I just don't get the ideological reverence some hold for a particular tool over another.

Re:freemarkets

[falconwolf]

I think GP should have said the natural consequence of capitalism, is that it easily lends itself to abuse in the end.

As does communism, socialism, religion(ism), and other "isms".

Once a few or a single company owns a market, there are no market forces keeping them in check. The free market doesn't account for that scenario, despite desperately repeated talking points.

But one or a few companies more than likely wouldn't "own" a market in a free market system. I wouldn't say all, because there may be cases that are exceptions but I can't think of any right though you might, but I bet most economic sectors where one or a few companies dominate it it's because government allows it. Like cable and phone service. Governments, in the US, gave one provider a monopoly in the use of rights of way for each service. Radio is the same but different. Originally in the US radio frequencies were homesteaded.

The first person to broadcast in an area on a specific frequency had the right to use that frequency. If someone else in the same area started broadcasting on the same frequency or interferred with the broadcasting courts were ruling that the first person to broadcast had the right to that frequency. This all changed when the big radio businesses pressured congress to create the Federal Radio Commission and to license the airwaves. The excuse being that the airwaves were a scarce resource. But the real reason was that big broadcasters didn't want competition.

So yeah, capitalism doesn't own corruption, but without some kind of system of fair rules, coupled with enforcement, it does lend itself to corruption quite easily.

Now this is where I disagree with some Libertarians, capital and small "l", I do support some regulating but only after the market has not been able to work out the problems. Such as a big radio broadcasting business entering into a market some one else is already using. Even that can be dealt with by the courts as it was in the beginning. Another area I disagree with some is in the ownership of infrastructure such as cable and phone. I believe it would be better if the entity that owns the infrastructure didn't sale the services directly to consumers so that they wouldn't have a monopoly on it. Instead I'd have them allow open access so others could offer said services. An example of this is northeastern Utah where a group of communities got together to build a broadband utopia. Private businesses can use the infrastructure to provide broadband, cable TV, and or phone access to consumers. This mixes a free market with socialism, if the government owns the system. However as was done with the Rural Electrification Act to electrify rural communities during the mid to later 1930s. The act paid for the erection of wind generators, the Jacobs wind turbines were considered the best and even today people seek out Jacobs to use themselves. When erected many of them were owned by coops where those who used the electricity and wanted to be a member of the coop could be.

I'll also note that capitalism does some things quite a bit more efficiently (and therefor maybe better) than the other economic systems - but each economic system, like each political system, has it's benefits, and I don't see why we constantly feel the need to apply one system to everything in an ideologically pure way.

Though I consider myself pro free market capitalism and a libertarian, as I state above I agree with this. Though I want liber

net capacity

[falconwolf]

Capacity is only unlimited if income is unlimited. Even in a monopoly people will only pay so much, so there's a limited income to expand the network - which puts hard physical limits on capacity, and to make any money at all the network has to be contended.

Thing is is here in the USA cablecos and telcos received almost $200 billion to buildout broadband but they did not. All they did was use the money to pad their bottom lines. They also battle attempts by others build out broadband. Some articles and posts on /. have been about this, whither it's telecos trying to block muni wifi or cablecos trying to block cities from installing cable. One example is A Broadband Utopia. Commercial broadband businesses tried to stop it but were unsuccessful. They were successful though having the Utah state government enact a law that requires it to be open, which was planned from the beginning. Because of the network Comcast was forced to offer a $90 bundle.

Falcon

Damn, gotta love that profit model....

[ECCN]

I have a redundant 100 MB/s fiber link in Chicago that I pay $3000.00 a month for. Conceptually, I can achieve a data transfer throuput of 259 TB per month. If I use TW's new business model by selling data throughput at $1.00 per GB, I could realize a net profit of only $262,216.00 per month. I better think of raising that fee to $1.25 per GB (I may need the extra $66,304.00/month to pay the perception management team and lawyers when I am done). Go figure, I didn't even get any of the free massive government "Internet Infrastructure Support" cash a few years back like TW did (1.22 B). No wonder they are farther along in thier "Rape the general consumer" business model than I am! On the other hand, I guess I need to branchout... I hear there is someone in DC handing out cash again....