FCC Boss Backs Metering the Internet

An anonymous reader writes "FCC Chairman Julius Genachowski has publicly backed usage-based pricing for wired internet access at the cable industry's annual NCTA Show. He makes the claim that it would drive network efficiency. Currently most internet service providers charge a flat fee and price their packages based on the speed of the service, while wireless providers are reaping record profits by charging based on usage, similar to the way utilities charge for electricity. By switching to this model, the cable companies can increase their profitibility while at the same time blocking consumers from cutting the cord and getting their TV services online."

Comments

Their wet dream

[Anonymous Coward]

By switching to this model, the cable companies can increase their profitibility while at the same time blocking consumers from cutting the cord and getting their TV services online

Re:Their wet dream

[SlippyToad]

If they go bust, it'll be due to their own internal inefficiencies,

They have been forced by Congress to fully fund their pensions 75 years out. That means pensions for employees who haven't even been born yet.

It's the GOP's way of killing the USPS so they can drive business to their asshole buddies. SOP.

Re:Their wet dream

[Anne Thwacks]

Based on the evaluation of the effect of ths in the UK, it will mean people divide into two camps:

Those who pay over the odds to buy a deal for a large amount of data they dont need, to ensure they dont exceed their budget limit.

Those who are too terrified to use the service at all for fear of "bill shock".

Over a period, most users end up in camp 2, and the usage collapses, until one or more ISPs revert to the "unmetered" model, and collect all the users.

Re:Their wet dream

[AngryDeuce]

You know, I honestly don't have a problem with metered billing, with three enormous caveats that I'm sure the ISPs would never in a million years agree to:

First, I want a new Telecommunications Act that opens up the lines similar to what Clinton did in the 90's with telephone. If you recall, after that passed, a plethora of 10-10-XXX long distance only carriers emerged, offering lower and lower cost per minute. We used to pay something like .25 a minute for long distance through MCI back in the day and within a few short years were down to a nickel using competitors services. This would require Forced-Access provisions, obviously, but the person that owns the lines is entitled to compensation at a fair market rate.

Secondly, I want the ISPs to be declared utilities once and for all and fall under the purview of the local utilities boards in the areas they service. That allows the public to have input into what is, for all intents and purposes, a monopoly. That way, when Comcast (for instance) decides to roll out some bullshit cap designed solely to kill Netflix and competitor VOD services, there would be hearings where they would have to explain their reasoning. Although, if the first point were to come to pass, the second would likely be unnecessary, as we would be able to go to a competitor.

Third, no more deep packet inspection, no more throttling, no more "traffic shaping", no more game playing. I pay you by the MB, what I do with those MBs is my own fucking business. Does the electric company give a shit what I'm using my power on? No, because it's none of their fucking business, and they get paid regardless. Ditto with bandwidth.

Those three things happen, I will be more than glad to pay for my usage. If not, they can take their newest fucking scheme to gouge the fuck out of us and shove it up their ass, because without those caveats, that's all this metering bullshit amounts to.

Re:Their wet dream

[Bengie]

Except off-peak data transfers are "free". Nearly of the cost of being an ISP is infrastructure. ISPs have to size their back-haul connections to peak usage which is almost entirely determined by the average user.

Someone transfer 20Mb/s 12 hours per day but during off-peak is going to cost less than someone transferring 2Mb/s for 1 hour during peak.

The cost to the ISP isn't determined by volume, but by burst. Volume can influence the burst, but it is only loosely coupled. I could easily time and packet shape my traffic to the point where it's cheaper for the ISP to handle 10TB of data than it is 10GB of data. In other words, I could manage a heavy BitTorrent seed in such a way that it costs less than your mom updating her FB status and watching a few funny cat videos on Youtube.

Who loses out

[isorox]

If cable companies take more money from their customers, with little extra investment in new technology or staffing, it means another sector of the economy loses out. Pay an extra $20 for internet access, that's 1 less dvd you're buying from a MPAA affiliated company.

A license to exploit the consumer

[yesterdaystomorrow]

The problem with this model is that it's very hard to control your usage. There's no practical way to know in advance how much a particular click will cost. Of course, the providers love it for exactly that reason.

Re:A license to exploit the consumer

[Zocalo]

Wide spread use of ad-blocking for one. A vast reduction in the amount of time spent on social networks and aimlessly surfing YouTube for another. Less impulsive downloads of media and apps from the likes of iTunes/app stores for a third. I can think of several others, but the gist is the same; savaging the profits of other markets to boost the flagging fortunes of another.

Let's not forget that, like certain other industries, the ISPs and carriers only have themselves to blame for getting into this mess in the first place. Be honest; connectivity costs have been unsustainably low for at least a decade now. Being overly competetive with each other and sacrificing upgrades necessary for future growth in order to cut another few bucks off the monthly fee has ultimately helped remove most of the smaller players. What's left is looking more like a cartel in all but name every day, and you know what happens with cartels and pricing, right?

Innovate or become obsolete. That's where it's at.

[g0tai]

So, cable companies failed to innovate, and depsite seeing this coming, didn't change.

Now their entire world is threatened by the internet, and the FCC are attempting to apply a band-aid to help keep their business model going. This will also be to the detriment of the consumer, and ultimately progress.

Sorry, but his application of the 'band-aid' is fundamentally wrong. In business, if you fail to innovate and keep ahead, you will eventually be surpassed by someone else/another business whereby they are ahead of the curve or willing to change. This is happening, and frankly, the cable industry has no-one to blame but themselves for failing to innovate.

They didn't innovate, and now they are realising that they are fast becoming obsolete.

Corporate greed drives your laws in America

[awjr]

You have a very weird system over there. In the UK, one company, BT had a monopoly on the telephone system. This was recognised and legislation was put in place that the last 'mile' of the connection could be used by any company offering services many years ago allowing me to choose from multiple ISPs as long as there was space in the junction box for the hardware. Now there is concern that BT again may be able to monopolise the next 'evolution' as we move towards fibre to house, so there are calls to prevent this from happening.

In the US there seems to be a focus on the government doing what is good for corporate greed and not what is good for society. :(

Re:Corporate greed drives your laws in America

[Anonymous Coward]

US is a corporately own and run state, pretty much fascist at this point.

Wag the Dog (again)

[Walt Sellers]

Over and over we go through this.

Metering has the eternal problem that ends with a enraged customer calling customer support over the shocking bill at the end of the month. AOL used metered services for years. When they finally went flat-rate, their business exploded with more customers than they could handle. When AT&T shifted from metered and offered flat-rate data for iPhone, they got more customers than they could handle.

Metered services can be good alternatives or add-ons to a flat-rate service, but they will be filling specific needs. A serious gamer may want low-latency. A serious file sender may want high-bandwidth on-demand. (I need to get this huge file sent to the office NOW.)

Metered services also have one big sore-spot: the meter itself.
      - when do you get to see the meter? Just once per month at billing time?
      - who verifies the meter is accurate?
      - how are ISPs prevented from abusing the meter? Recall that long ago, laws had to be written to stop phone companies from charging for calls before they were actually answered.
      - how are bytes being counted? Bytes are not counted like phone minutes. Packets are re-transmitted out of necessity. Do they count twice?

I may be wrong ...

[Taco Cowboy]

... but I get this feeling that under the current administration America is actually going backwards on a lot of things

Ever from the start of the so-called "Information Hiway" the users had fought hard to get the flat-rate package from ISP

It has been that way for decades and suddenly officials from the Obama administration supporting the metering of Net usage

It is also under Obama administration that the MAFIAA tried (and fortunately failed) to push their SOPA bill - and if my memory served me right, the Obama administration was supporting the bill, and only after stern objection from millions of Net users that the Obama administration changed their mind

I am afraid to think what will happen i4 years from now if this administration is to win the upcoming election

Re:I may be wrong ...

[letherial]

So Mr Romney is going to do better? you want to see a HUGE sell out, look at him and is multiple stances on every issue depending on who is paying the most

Seriously, blaming this on one administration, one congress, or one party is utterly ignorant. Fact is, the rich have far to much control and mr rich guy himself taking the mantel of presidency will lead our country back to double down bush era, less taxes and more power for the rich; more hardship for everyone else.

And if you think the recording industry will have less control with a republican in the white house...well then i will take back my statement that your ignorant, instead ill just call you plain stupid.

Lets just be clear, i cannot imagine the American people will accept romney as a president, i think he will lose and lose big. If the right wing was serious about anything, they would put up electable candidates...huntsman was a good choice, but retards herd the stupid in that party, in turn, the right wing has gone from a political party to a cult.

Re:I may be wrong ...

[__aaeihw9960]

You actually just called out major flaw in the US election system. We no longer vote for the best candidate, and they no longer run on the 'I am best platform.' We now vote for the least bad option. When Bush came up for a second term, his competition was Kerry - who may actually be a Cylon.

So, we voted for the one who was the least bad - Bush.

Look at campaign adverts now. Sure, they run clean ads for the first few months of the election year, but mostly the ads are, "Look at the fire demon I'm running against. He eats babies and punched orphans. I do not." We are forced to look at the bad of (a) vs the bad of (b), instead of what (a) and (b) really stand for.

Again, I believe that Bush was re-elected simply because we are no longer voting for a candidate, but against another.

Want proof? Look at the comments in this or any /. thread about Obama or Romney. No one really has good things to say about either one. Most comments made are that Obama is awful because _____, or Romney is awful because ______. At this point, the vote against Candidate A attitude is so deeply entrenched that we have more of a popularity contest than an actual fucking presidential election.

For some reason I feel like I did a terrible job of explaining my rant. I hope that all makes sense and doesn't come across as too 'screw the gub'ment'.

Re:Innovate or become obsolete. That's where it's

[XellDx]

*Disclaimer: I've worked in Cable for years*
They have been innovating. You can only fit so many channel frequencies into a line before you have to upgrade the line your using or find a new way of transmitting over the existing infrastructure. Any innovation that would allow for an exponential addition of channels to the existing infrastructure would be a gold mine. They're trying, and they're all in it together. When was the last time you heard of any one cable company inventing anything? They don't. They have a group dedicated to research which helps all of them.. Anything that the group comes up with is made an industry standard, basically IEEE for cable.

But going back to the infrastructure: cable companies are obviously bound to this. And it costs a lot to both maintain and upgrade. The first half of the 2000's many companies used cable internet and later cheap phone service to multiple advantages.
1 was generating more revenue by increasing the amount of services their customers subscribed too. This also lead to increased customer loyalty, since its one thing to cancel just your internet service if a company pisses you off but another all together to consider dropping a company that hosts your TV, Internet, and phone.In upgrading a system of say, 50k subscribers you could double the amount of money it generated, which means
2 the increased revenue offset the costs of upgrading systems to support the new features. Think back 10 years ago, what was the fastest speed you saw in major cities? 3-5 Mbps if that. Some area's have 50+ Mbps now.
3 by increasing the capacity when HD came around many systems where already ready for the initial wave of channels. They did innovate, which is why many area's have 50+ HD channels available now if you have an HD converter. Without the investment into rewiring many area's, cable would never be about to touch satellite as far as competition in many area's.

Upgrading systems costs an insane amount of money. That more than anything is the reason that cable monopolies exist, the cost of entry prohibits competition. To install a new plant in an town of 50k takes something to the tune of 2-3 million dollars, with zero guarantee on how long it will take to recover that cost, if ever. Cable lines have reached their limit unless someone comes up with a new way of multiplexing, and if its that significant a step up you'll see it deployed very rapidly. Some companies are switching to fiber but the cost is insane. And where as if someone cuts a cable line the service could be back up in an hour, if someone cuts a fiber line it could take significantly longer.

Having said all that, the "Usage Allowance Plan" is a crock of shit. It is exactly what it is being labeled as, a stop gap measure to keep people from dumping the TV service. Because cable companies get charged by the broadcasters based on their install base*, which includes internet only customers in some cases, they're trying to stop the current trend of "Internet for everything" since it inverts #1 & 2: less revenue generated, but now node capacity has to be increased. Does it make it fair for the consumer? Of course not. Are the amounts for the usage plans in use by the larger companies fair? Considering that a large % of the subscribers never come close to the cap, it depends. COULD they offer an 'unlimited' package? Yes. Which is why its a crock of shit, their could be a way to pay more if you use more, but thanks to other industries showing that micro-payments for additional service is a viable model for monopolies that isn't likely to happen. Hence this whole hullabaloo, they're trying to have their cake and squeeze money out of it too.

*ask anyone who's worked for a Cable call center about NFL network. Just don't do it when they're holding something stabby.

users? I say bs--

[way2trivial]

flat rate pricing didn't come because USERS FOUGHT, corps do not give a rats left testicle- however you think people fought?

Compuserve got it's ass handed to it by the likes of aol, mindspring and earthlink because of competition.

when everyone could choose which POP to call the market created it's own efficiency- and found a way to work in a fashion that benefited the consumer, ultimately the pricing war became flat rate service.

the key to efficiency is choice of provider, followed by fiscal evolution.
The responsibility of the government, representing the people, is to ensure we have the choices.

not to write exclusive contracts with sole presence providers.
not to prop up entities with massive right of ways that don't get offered to others-- and to occasionally DENY a request to merge.

Anyone notice verizon is very in bed with comcast on a lot of deals? the fact that verizon stopped expanding fios- think it might be tied to the fact that verizon now sells comcast products? Cripes-- verizon had the poles to take on comcast territories without huge legal shenanigans- and instead they got into bed with the big fat fuck that is so efficient with it's operations (and fair with it's pricing) that it bought whole sports teams and NBC?

WHY the hell does a gov't granted monopoly service provider get to set it's rates so painfully & obviously above it's cost of operation that it can expand so far and fast. they should never have had enough money for those deals. as a gov granted monopoly they should be so bent over the 'justify the expense' audits that when you walk into the local business office customers should need their own pen to fill out a form-- cause they can't afford a box of them.

I fear every administration- unless you can vote with your dollars- you can't change anything