Slashdot Mirror
ISP Data Caps Just a 'Cash Cow'
An anonymous reader writes "Ars summarizes a new report into the common practice of ISPs implementing data caps, ostensibly to keep their network traffic under control. The report found a much simpler reason: money. Quoting: 'The truly curious thing about the entire debate has been the way in which caps have mostly remained steady for years, even as the price of delivering data has plunged. For example, paying for transit capacity at a New York Internet exchange costs 50 percent less now than it did just one year ago, and many major ISPs aren't paying at all to exchange data thanks to peering. So why don't prices seem to fall? ... The authors of the new paper contend that all explanations are more or less hand-waving designed to disguise the fact that Internet providers are now raking in huge—in some cases, record—profit margins, without even the expense of building new networks. ...While Internet users have to endure a ceaseless litany of complaints about a "spectrum crunch" and an "exaflood" of data from which ISPs are suffering, most wireline ISPs are actually investing less money in their network as a percentage of revenue, and wireless operators like AT&T and Verizon are seeing huge growth in their average revenue per user numbers after phasing out unlimited data plans—which means money out of your pocket. In the view of the New America authors, this revenue growth is precisely the point of data caps.'"
... it must be faced for the US to whom the free market is as much a religion as anything.
Shocked! To find gambling going on in this establishment.
Just about anything a mobile phone company does is aimed at maximizing revenue. The reason they would even pretend otherwise is that it can be easier to convince people to pay more for things, and avoid being as angry about it, if you can feed them some kind of cover story to mollify them.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Free market FTW!
http://www.straighttalksim.com/
Millions of cell phone subscribers are paying big money monthly in order to consume advertising, in a way TV viewers in the 60's and 70's were never stupid enough to fall for.
Am I the only person who has known this for years? No matter how much data goes through infrastructure, it's not going to change the cost of running the infrastructure (significantly). That's like keeping a huge lightbulb on in town square but making people pay for the priveledge of removing the curtains from their house to let the light in. Doesn't change the cost, just another way for ISPs to gouge consumers. However, there is an exception. Satellite internet it makes sense right now for their to be caps. It's a behavior adjuster. A single satellite can only transfer so much data at once, so they commonly have off-peak times where if you want to download a few gigs, you can do it in those times and it won't go towards your cap. This is required because satellites are a fairly precious resource. Where I use to live no one in a 50 mile radius could get satellite internet because the only satellite serving the region was already over utilized and they didn't want it to get even worse.
Sorry to say it as such, but ...
No. Shit.
However, there is an exception. Satellite internet it makes sense right now for their to be caps. It's a behavior adjuster. A single satellite can only transfer so much data at once
In theory, caps on cellular (3G and 4G) data are the same way because of limited spectrum and limited space to put up cell towers. Except for some reason, cellular doesn't have an off-peak discount like satellite does.
I doubt anyone here is really surprised by this. On the one hand, the arguments made by the ISPs make some sense: as more and more people go online and download more and more multimedia and apps alongside simple web browsing (which also uses more data than it used to), then of course bandwidth usage is also going to go up. However, that argument ignores the other side of the coin--namely that the technology the ISPs use continues to improve, becoming more and more capable of meeting (or exceeding) that demand. The caps also ignore usage patterns, peak hours, etc.
If the ISPs cut you off entirely when you exceed your cap, then their argument might have some weight. But they don't do that. They let you keep going, at the same speed you were before. Only they charge you extra money.
What borders on criminal is that they're so bad about informing you of when you approach the cap. Though she claims never to use the Internet on her phone, my mother always goes over cap. She has only twice received a notification from AT&T that she was approaching the cap--both of which came two days(!) after she had already gone over her allotted amount.
I'm still on a grandfathered unlimited AT&T account. I come nowhere near 3GB of usage each month (I'm almost always on WiFi), but I have no intention of dropping down to a cheaper account. It's maddening that I can't get tethering (officially...) without going to one of their crap capped plans.
If you can't convince them, convict them.
While I haven't looked into this seriously, I'm starting to wonder if there is a general ISP bash going on. I understand that some of their policies are seedy, however I'm thinking about the cost.
They invested huge amounts to create the infrastructure they currently have, and it could be that it is only paying off now? Or it could be that it started off as this, with companies attempting to recoup the costs and start making profit, but then found that they could continue the status quo and make large amounts of money?
Do they need to justify what they are doing? They have a responsibility to their shareholders, they serve their customers in the way they think their customers deserve, what stops the customers from leaving to another company? Honestly is there? Lack of competition? In my country we have had low caps consistently, but recently the biggest company has been forced to lease their lines and as a result caps are rising and costs are dropping. Is the solution forcing the large companies to lease their lines out just above cost?
The point the article makes is interesting, but I'd hope people would think about it rather than jumping on the usual train, either the 'I know what I know' or the 'me too'.
Of course they are. Just like the telco's and long distance charges. The lines where long paid for but they just keep say that to many people are making LD calls so to help increase the number we need more money. All the while they don't actually increase capacity and just pocket the money.
How we solve this I don't know. The only thing I can think of is to move to the ISP's that aren't gouging as much as the next guy. I know that's hard. I also live in a small town and have very limited choices of ISP's.
Here's one way to try and save your self some money. Buy shares in the ISP (if public). Just like the banks. Try and get some shares so you to can get in on the profits. Yes again easier said then done. I don't have solutions for everything and everyone just ideas, and not always good ones.
Then why would they vote for a center right party?
It's one or the other you dolt.
This is the exact behaviour you'd expect from a largely-monopoly or entrenched oligopoly market.
Governments or municipalities should own the infrastructure. Everything should be fiber. Most of the costs in those rollouts are administrative, not technical in nature.
There is a huge economic cost in not having gigabit FTTH infrastructure; it's big enough that companies like Google are stepping in.
..don't panic
is "Follow the money." Many things become clearer then, without even a white paper.
Slashdot: Failed Car Analogies. Amateur Lawyering. Anecdote Battles.
From TFA:
"The best way to resolve chronic network congestion in the long term is to invest and expand capacity. Yet, a review of the publicly available financial document for some of the largest ISPs in the country shows a decline in capital expenditures—the costs associated with building, upgrading and maintaining a network, such as construction, repairs, and equipment purchases—for their wireline networks.Many ISPs are spending less money on capital expenditures now, both as a ratio to revenue but also even in raw dollars,than they have in years past."
Lack of competition coupled with the payment of lucrative dividends by telecommunications is the culprit. AT&T pays 6% and Centurytel pays 7.5%. There needs to be an incentive to redirect the money to modernizing the networks. Maybe a tax credit for re-investing in plant and equipment, or a lower corporate tax rate if the dividend rate is reduced, and the money used for plant and equipment.
This may seem like a really stupid question but it has always bugged me: why do both me and the content provider pay for data?
Back in the bad old days of Long Distance Calling, whomever initiated the phone call (assuming you're not calling collect or on a 800 number) paid for the call. It made sense: why pay for something that you didn't start?
However, in data, both sides pay. Am I the only one confused by this? I understand that I should have to pay for a connection (like the phone company) but why do I get a bandwidth meter along with the other side?
The only reason I can think of is because the data is "asynchronous" (e.g. the same amount of data isn't being exchanged). But this reason only goes so far since once side is uploading and the other side is downloading.
We don't live in Shouldland.
This is precisely why capitalism doesn't belong in some markets. Cue rabid "the free market is always right" retorts in 5...4...3... but the truth is when you have any infrastructure service; sewer, electricity, communications, roads, etc., that everyone needs access to (or at least a majority of people in the community use often), without regulation this kind of thing will happen. It creates a natural monopoly; And no, the government doesn't create the monopoly. It would happen whether the government even existed or not. This is the quintessential example of where and when government regulation is needed to rebalance things so that the service provided retains its usefulness to society without becoming parasitic. The government is the only thing besides an even larger monopoly power that can influence this kind of market dynamic.
And yet here we are, getting put over a barrel and raped because of our idealized notion of how the market will "correct itself", and how government regulation "hurts businesses". You know what, fine: Let one company's profits suffer a little for the greater good, rather than letting everyone suffer a little so the company can be massively profitable at our expense. We need to put a stop to the nickle and dime death march that is killing our middle class off. We need regulation.
#fuckbeta #iamslashdot #dicemustdie
I mean, surely the free market is working efficiently when i am charged fifteen cents to send a 200 character text message once i exceed my generous allotment of 400 per month. it's a price that accurately reflects the costs of offering the service, right?
oh but seriously, can someone explain how anything other than collusion can explain the market price for testing?
Bandwith is not a commodity like water. We don't save anything when we under utilize it. The cheapest per bit cost is when the network is maximally utilized. Incentives that encourage people to use less bandwith are economically unsound.
Give me Classic Slashdot or give me death!
Profit! Must recoil!
over on the ISP and backbone side of life, data traffic is growing 50-60 percent per year, and it's a wild race to try and keep ahead. an expensive race. at this point, at least one company I'm familiar with is asking do they raise the backbones to 400 gig or to one terabit inside the centers.
that ain't the flower fund they have to raid for it.
argue caps all you want, NostrilDrippus Predicts! (tm) that tiers of usage or per-gig usage charges are your next fightin' words in mere years of time.
if this is supposed to be a new economy, how come they still want my old fashioned money?
You can't let someone dig up the roads because a person on the street has decided to change ISP.
You can't let someone use the radio bands willy nilly because there's a new customer for wireless internet.
It's rather the intent of every single Randian faithiest to INSIST that any failure in the Free Market is due to government interference.
Given that you INSIST they should do some things such as enforce contracts and prosecute theft, murder, et al, that there is ALWAYS going to be government interference.
One thing that always shows up the idiot libertarian is that they blame government interference without ever considering evidence for the stance. Just "Government exists? Well, they did it".
If government got out of it and stopped enforcing contracts, then the ISP customers would be able to not pay for the connection and that would fix the failure, wouldn't it? But that's not allowed, government MUST interfere then!
Also in breaking news, the sky is blue!
Anyone else want to take the time out to point out the completely obvious?
So this is something that big brother is there to help us out with, there's a real simple solution imho: the government owns the backbone and leases it to the ISPs, fuck level 3, fuck comcast, give it to uncle sam. Comcast can lease from sam, so can Syn, Syn doesn't like comcast, I lease the backbone all the way to a public gateway and comcast needs to be competitive or Syn will charge less (A LOT less in current market state) and take all it's customers.
Now the problem with this is that ISP's install their own backbone, so they own it, the government would have to lay down a backbone of similar nature house to house costing billions.
What upsets most people (in the western free mark world) isn't that they make a profit. It's that the companies don't reinvest some of that profit in actually increasing capacity. They (the companies) just complain about to much traffic and crank on the rates again. That and there is a complete lack of competition and almost zero ability for a new entry in the market. This makes it at best an oligopoly and at worst a monopoly in 99% of the towns and cities.
Also why do republican morons always think that the democrats/liberals are against profit?
Oh look its the big scary socialists again. They don't want anybody to own anything! See they want corporations and millionaires to pay TAXES!!!!
AC is a moron
You don't remember cell phone commercials from 10 years ago, ridiculing competitors and their complex minute plans. The cell phone companies simplified their plans.
I think smart grids in America will fail, because consumers will not understand them and variable rate electricity pricing.
As another point: I live out in the middle of nowhere, and according the the major telco/cable companies it's "not profitable" to provide any decent service to me. Yet, not 1 but *3* local ISP's have started up here--the newest one is close to 2 years old, the others have been around for substantially longer than that and are still in service, therefore presumably making money.
Qwest or Comcast could easily have owned the entire market here and left no room at all for these upstarts, but they just did not care.
I live in Toronto, Canada and there's two options for cable and cell phone: 1) get gouged. 2) don't get gouged but deal with a smaller player.
I have friends who complain about their overage bills using the internet with Rogers and Bell. I tell them that they can get unlimited usage (or 300 gb / month limits if you want to save a few more dollars/month) for half of than what they're paying via Teksavvy and they don't want to switch.
I have friends who complain about paying $70 / month for a cell phone that only gives them 1 gig of data use and tell them about the unlimited data/calling/texting/voicemail plans Wind offers for $40 / month and am met with "wow, that's a good deal, I should switch," but no one ever actually switches.
I understand that some friends say this just to be polite so I'll leave them alone, but there is something to be said for momentum that people have with a company even if it's ripping them off.
ISPs are quite heavily regulated, and are commonly given local monopolies (or oligopolies) - THAT's why service is so bad and the prices are so high.
Bring on a free market, and you might see prices come down, while quality rises, just like with the unregulated electronics sector (phones, computers, tablets, TVs).
For my kid I automatically get texts for (IIRC) 50%, 75%, 90% and limit hit (she can't go over).
Get rid of all laws and the market will be free, right?
Or are you talking complete disassociated bollocks? Again.
I actually work for an ISP in the UK. I don't know about the states, but here the big cost to us is the backhaul from the customers premises to one of our PoP's. Transit costs are going down dramatically but backhaul costs are not. People are using more bandwidth, which means overall it is becoming more expensive to provide services.
The Western States Contracting Alliance is an agreement that AT&T Mobility and Verizon Wireless extend to their government and non-profit customers. Aside from no early termination fees and some other sweet deals that make mobile much more palatable, they offer users unlimited data standard. Not "5 gigs and you're out", but truly unlimited mobile data at full 4G speed. I pushed 12 gigs last month as a personal best without being throttled or sent a nastygram. While I'm glad they extend this service to the IRS recognized do-gooders out there, I know that it came about because your senator doesn't want to worry about data caps and speed and those peasant concerns. They worked for this, they dictate the terms and I think everyone should know about it.
"It's that the companies don't reinvest some of that profit in actually increasing capacity."
Who says they don't? And besides that it's not your decision what they do with their money.
"republican morons"
I am the AC and I am not a Republican.
"AC is a moron"
I know you are but what am I?
most people do not have a choice when it comes to wired Internet connectivity. I have access to Comcast and no other ISP for connectivity.
I thought most customers in urban or suburban areas lived within 3 kilometers of a DSLAM and could thus get DSL.
remains sound asleep.
In Canada major ISPs also happen to be the biggest satellite and cable TV companies.
With more and more people now subscribed to Netflix, caps have yet another "justification" besides those mentioned in other posts.
Oh, I was hoping for something a little better than that from you, sir. A man of your education.
You have enemies? Good. That means you've stood up for something, sometime in your life.
This, along with credit card companies raising your rate after you borrow a lot because you're "riskier"
How does that affect people who follow Dave Ramsey's advice not to borrow? Or even people who follow Polonius from Hamlet?
Robber barons.
Somalia is another.
Africa selling each other off to Americans et al.
There are plenty.
It is just that this is devastating to your articles of faith, therefore you insist they don't exist.
They have to pay for what exits their network and goes to the internet, but that's pretty much a flat cost. That link should stay saturated.
Caps exist to keep a single customer from being a disproportionate cause of that saturation, which reduces other customers' quality of service.
The wireline carriers are supposed to use 'reasonable network management' to control the bandwidth each user gets.
Perhaps an aspect of 'reasonableness' should be the cost to the user relative to the cost to the service provider.
For a fixed monthly service cost, it seems reasonable to expect the bandwidth caps to increase over time as the cost of transporting bits goes down.
Data caps are a cash cow for ISPs but ISPs in general are obscenely profitable, they make energy companies look like chumps.
"When information is power, privacy is freedom" - Jah-Wren Ryel
Sure, building and maintaing the *capacity* costs money. But that's a fixed cost regardless of how much of that capacity you actually use.
If subscribers use more capacity, the provider has to spend capital to add more capacity. Incentives to reduce use of capacity allow the provider to delay such an upgrade from one date to a later date. In opportunity cost terms, the provider earns interest on the cost of an upgrade between those dates by adding a cap.
Funny man huh? Hope in one hand and shit in another and tell me what you've got.
The options are either use charges or high oversubscription rates, both of which Slashdotters hate. Why can't I have it all for free? And with the best technology and 99 9s of reliability.
Learn to love Alaska
Or rather, it doesn't go through with an equal probability that other packets won't go through.
Caps allow the provider to discourage one subscriber from reducing the probability that other subscribers' packets don't go through.
We all get our fair share of the network, regardless of oversubscription.
Caps allow the provider to discourage one subscriber from reducing other subscribers' fair shares below an acceptable share.
TCP/IP has mechanisms to handle the case where too many people want to use a link. If 10 people each want to saturate your outbound connection, they'll each get 1/10th of the available bandwidth. That sounds fair to me.
Caps exist to discourage a subscriber from bringing other subscribers' effective data rates below the last-mile burst rate that the provider advertises. If the provider advertises a burst rate of 6 Mbps down and 1.5 Mbps up, subscribers are going to get frustrated if they can't send at 1.5 Mbps because so many other subscribers are sending at 0.5 Mbps that the network has become maximally utilized. In this way, maximal utilization leads to embarrassing speed test results on dslreports for the provider.
BT charge by the byte to all customers, this includes BT's provider arm, but that's no different to Starbucks paying huge amounts of money to their Swiss arm for ground coffee beans: it's fake difference, the money goes in the same pot.
And BT have a requirement to sell to others.
Except
a) they can delay and fuck things up and not be dinged for it
b) charge huge amounts for data
And therefore you have ABSOLUTELY NO CHANGE.
The holder of the wires MUST be a non-profit governmental institute.
Publicly traded companies have to compete with other companies in the industry, and this competition is not only for customers but also for investors. The more investors are interested, the higher the share price will go, and the more money the company will raise when it issues more stock. To attract investors, many publicly traded companies promise to pay out some of their earnings as dividends. You want ISPs to put more of their earnings toward network upgrades instead of dividends, and I want a pony.
So how many times did you post this in the thread? Do you normally defend poor business practices or something?
This is why the major credit card companies keep trying to make it really hard to make major purchases without using one of their cards.
Using a card doesn't always involve carrying a balance. I use two credit cards regularly, one Chase Freedom Visa (1.1% cash back) and one Target REDcard (5% cash back), and I have both set to pay the entire statement balance in full each month. So I treat the credit cards as if they were debit cards: if I don't have the money in the checking account, I don't swipe the card.
Please, the easiest way to keep one person from using too much throughput is to put a hard cap on the max throughput and sell it as such.
A monthly cap is a cap on average throughput over a period of one month. Divide the cap in gigabytes per month by 324 to get the effective cap in megabits per second. For example, a 250 GB per month cap is the same as a 250 / 324 = 0.772 Mbps cap on sustained throughput. You appear to be arguing against the concept of advertising a burst rate.
Is it because it isn't working and you "know" that if it were, it would work?
So how many times did you post this in the thread?
My goal is to discourage people from making a distinction without a difference. I'm trying to show that no matter how many different ways Hatta rephrases the anti-cap argument, there's a corresponding phrasing for the pro-cap argument.
Do you normally defend poor business practices or something?
It's called devil's advocacy. I'm not trying to claim that caps ought to exist in a perfect world. I'm just trying to express the rationale for using them as a tool to improve the experience of the majority of customers until a capacity upgrade can be completed.
Level 3 has a blog post on this subject. They point out that the amount of data that a user consumes is mostly irrelevant because an ISPs costs are driven by the peek data rate not the total amount of data transferred.
...and why do they allow you to do that?
It's simple. They know that otherwise you'd be too smart for their scheme and wouldn't even have a credit card come the day that you happen to need more cash than is in your checking account. In that case, rather than quickly sign up for one, you might just reduce your expenses. ...but as long as you have that card, you might as well just carry a balance for a month or two. After all, you could pay your bills before, and the idea that things won't turn around in a month or two is laughable. So, eh, what the hell. Charge it.
The fact that you even have a credit card is your first mistake. They're just waiting for you to make your second.
It's like everyone hears this story about cable television originally being ad-free and thinks "OMG, it makes so much sense! It must be true!"
Cable television started out as some dude with a huge antenna in his back yard, selling access to his crystal-clear picture to everyone else in his neighborhood. Thus, there were commercials in it from the beginning. People didn't buy cable because it was ad-free (because it wasn't ad-free). They bought it because, unlike using their rabbit ears, they could actually see and enjoy their television when they bought cable.
Jesus fucking Christ. Cable originally being ad-free is no more true than people getting stomach cramps and drowning when they swim within twenty minutes of eating. Neither are true, but for some damn reason, everyone insists on mindlessly repeating both simply because the information is interesting, nevermind the factuality of it. After all, it sounds hard to verify, since no one wants to eat and swim and potentially drown, or go back and time and buy cable, so apparently everyone decides "oh well, it makes sense, so it must be true" and they think no further of the factuality of it.
You, sir, are what is wrong with humanity. Just think of how much better the world would be if we didn't have you mindlessly repeating some story someone made up as if it were fact. Please, either stop talking, or kill yourself. One or the other.
... fire hot, water wet. GIFs at 11.
By the taping of my glasses, something geeky this way passes
Google Fiber will put much of them out of business... not that I think Google wants to but if they keep the prices so artificially high they are not going to survive..
http://www.hawknest.com/
If you don't have caps, then people still get EXACTLY THE SAME USE as anyone else.
All caps do is make someone who uses bandwidth at quiet times unable to use it when busy.
All caps do is make someone who uses bandwidth at quiet times unable to use it when busy.
Then apply the cap only at times of peak packet loss and keep the off-peak times unmetered. Oh wait, you can't do that because providers have to use plan simplicity as a selling point.
A... bad saying?
Just because someone was murdered doesn't mean he wasn't right. Billions of people follow (or claim to follow) Jesus of Nazareth, and he was sentenced to death by the leaders of organized Judaism.
you're near a business, and it's gonna have a phone.
However, the sign on the door states: "NO PUBLIC RESTROOM OR PHONE"
how do you think people pre-1995 did this?
Pre-1995, pay phones were commonplace in urban areas.
I'm just trying to express the rationale for using them as a tool to improve the experience of the majority of customers until a capacity upgrade can be completed.
Bingo. This is what caps are for and they do a great job. The ISPs will rake in record profits and pay out massive bonuses instead of upgrading capacity. Caps are the reason why our shitty network infrastructure still works as well as it does. Caps will also be used to postpone capacity upgrades as long as possible.
If you want a vision of the future, imagine a youtube comments section scrolling - forever.
You can't stockpile unused bandwidth.
Anything not used is lost forever.
They should be able to charge for priority access but not waste bandwidth on purpose to keep prices artificially high.
Furthermore, all natural monopolies should be co-ops.
Cable companies in the US were build on public land with public subsidies.
Morally, they should be public property.
Throw out an olympic games with real lions eating real Christians and we'll be satisfied. Otherwise, we shall be annoying and loud for a bit. Hope you learn your lesson this time, you Evil Empire of Doom (A.K.A. corporate ISPs)
Any such commission would eventually be captured by the industry it's supposed to regulate, becoming useless.
The only solution to our problems is a freeer market. Competition is the only thing that will provide the necessary downward pressure on prices and incentive to invest in better quality of service. The only way to achieve increased competition in these marketplaces, however, is probably through a decidedly non-free-market path.
The service providers must be broken up, with the divisions that control the infrastructure being split off from the portions that provide services/content to the end user--either into separate private corporations, or by nationalizing the infrastructure, thereby eliminating the conflicts of interest that plague the existing industries.
Yes, even as a quasi-libertarian die-hard free market capitalist, I am quite serious about the suggestion to nationalize. Infrastructure (spectrum/towers, copper cable, fiber, whatever) is a natural monopoly. The only way for it to be efficiently managed is either via heavily regulated (preferably via something like common carrier) private companies, or a publicly owned utility model. As long as the people who own the pipes are also the ones delivering you service, all the pressure is applied in the exact wrong direction, leading to increases in prices and reduction in quality.
On the other hand, when anyone can become a service provider by paying for access to the lines/towers (on a pricing schedule that treats all providers equally), if a service provider starts overcharging or under-performing, a competitor can move in and eat their lunch. People will flock to providers who provide the best value, since they will no longer be chained to a specific company by regional monopolies on the resources.
Oh, and while you're at it, get rid of that abomination called CDMA.
Maxim: People cannot follow directions.
Increases in truth directly with the length of time spent explaining them
The issue is probably not interconnection and peering, it's probably provisioning for peak usage.
Take a neighborhood of 1000 houses. Ten years ago there may have been a few people download mp3s, someone downloading a movie, some people doing web and email, aggregated you probably would've gotten away with a 10Mbps connection, maybe less as the internet wasn't as widely used. These days during peak periods you could expect perhaps 100 people streaming HD Netflix to their TV, some downloading torrents, others browsing images, watching youtube videos, you have people on phones, tablets, smart TVs, devices doing updates, etc - that would probably require more like 1Gbps, 100 times more bandwidth than ten years ago.
Interconnection costs less, but you have to upgrade your huge number of expensive routers and various network equipment, upgrade your back-haul, provide local caches for youtube and netflix, etc, etc. Sure they're making increasing profits every year, but it's not like they're standing still.
DISCLAIMER; I actually work for an ISP, and have done so for over a dozen years now.
The phrase you're looking for is "punitive damages".
At some point an ISP will charge a non-trivial amount of money in order to avoid network congestion.
The main problem with this equation, if there is one, is NOT the price being charged but rather the amount of data included before excess/usage-charges are applied.
In practice you should ALWAYS cause financial pain-and-suffering to your Top 'N' customers, because they're the ass-monkeys abusing your capacity as hard as they're capable. If they *really really really* want that much bandwidth, all the time, every day, then they should be prepared to pay for it.
ISP financials (for retail customers, at least - business people pay "real money" for services) are based on the assumption that "on average customers use X% of their line-rate".
REAL WORLD EXAMPLE: little-ol-grandma absolutely NAILING her DSL line torrenting DVDs of movies (yes, violating copyrights no less), burning them to disk and handing them out to friends WHILE SHE NEVER WATCHES ANY OF THEM (there aren't enough hours in the day anyway). Are you going to SERIOUSLY going to argue that her usage costs should be happily averaged out across the entire userbase?
Visit CryptoGnome in his home.
Invisible hand, where are you when we need you to pimp slap the greedy? Just as invisible as the emperor's clothes?
so instead prices are raised a bit for everyone to pay for [transaction fees].
The prices were already raised to cover the cost of counting cash, including the cost of cash registers occasionally being short.
"let the government own the backbone"...anyone know of any toll roads that removed the tolls when the superhighway / bridge was paid for?
In NSA America social networks join you!
Can't come soon enough.
DUH!
In Canada you have options. In America you don't.
Flat out, we don't have a choice. If we want mobile service, we go to one of the four major mobile providers and get ripped off. They all continuously raise prices without raising service (in fact, cutting services in terms of unlimited data plans and the size of data packages). It's a terrible situation that needs to be fixed, but won't as long as the government sits back and watches us wriggle rather than passing a law that prevents this kind of abuse from happening.
When the Internet first came out, [formerly] gov't-owned Australia's de facto monopoly telco - now known as Telstra - had no qualms "milking" low-income families - who could afford the company's "cheapest" wired Internet plans (eg, one costing $29.95, but included just 500 MB of data, ie, before the plan's $150 / GB "excess usage" penalty-fee kicked-in).
I met the father of one of my students, who'd experienced "bill shock" on receiving a month's bill for wired Internet service of -over- $1,200 the week before... We'd prohibit power utilities from building "poverty-traps" into their Electricity tariffs (often - in that era - even -rewarding- bigger users with -lower- KWh rates).
But Telstra never thought twice about likely -social- consequences of its residential pricing. It was enough that the company made money.
It may surprise some, that it wasn't -that- long ago, the Telstra -finally- removed such "poverty-trap" plans from its Internet plan offering.
shareholders!?!?
(which is the entire problem.. maximizing shareholder value at the expense of morals, customer satisfaction, and often.. the law)
captcha: hookers
Value is a function of scarcity; packets of data are not a scarce resource. How, then, do ISPs get away with selling them in units of volume?
I don't know, but it's obvious you've got shit in both hands and more besides.
ISPs should be classified as common carriers. The fact that they aren't is a historical artifact.
http://en.wikipedia.org/wiki/Common_carrier#Telecommunications
The free market can't fix the problem ... because people aren't willing to pay for the networks that geeks want. (yeah, right, we all know what word should be used, but that would detract from the discussion at hand). Is this a failure ?
Well, I am one of those geeks, so I'm not happy about it.
That doesn't mean the market isn't doing exactly what it's designed to do : it gives people what they want, at a price. What resources are you willing to give up for internet connectivity ? For crappy connectivity ? For good connectivity ? And unlimited bandwidth at $200 per month is not what people want. 20 Gig at $50, that's what they want.
Barriers to entry of being an ISP are tiny in most places. It is possible to build a small ISP for the most part on newly built infrastructure and survive with ~10 people, for close to a million bucks, and grow from there. I know. I've been part of that. And we found the obvious : we could delay delay core network upgrades about 8 months by kicking ~0.2% of consumers of the network. This at first created a hidden bandwidth limit (I actually tried at first to play with qos, without actually disconnecting them. It took too much time), then later we simply made this explicit, because the customers that came to us for having no bandwidth limit ... well, it was obvious why they did so.
It wasn't a choice really. Pay for personnel expansion and growth (read: not going broke and having to fire all personnel), or pay for dark fiber to satisfy maybe two dozen users over an entire country. I am sure the choice made is disappointing. Sorry.
Furthermore, having looked at the actual problem, I can tell you that it doesn't work. The only network type that can actually sustain rated bandwidths to all users is a full clos network (clos for Charles Clos). In case you don't know what that means, that means that an ISP would need to install m > n crossbar switches and connect every switch to every customer's first hop. Assuming 500 lexes (that's a single US state, cities only) that means 250000 links. (and really you should do m > 2n-1, leading to over a million links)
So actually delivering the rated bandwidth outside of small datacenter (1000 machines at most) is practically impossible. Not "we'll do this at some point in the future", but as in "not in a million years".
When it comes to real networks a double star network with 50:1 oversubscription on the lex network is considered rather expensive these days. It's what people are paying for. Profits are at an all-time high, yeah right. Those profits would pay for about 5% more bandwidth, at least in my, admittedly small, case. The cost for 10 Mbit symmetric bandwidth actually used at 10 Mbit would be $360 monthly, not including hardware or line costs ($35/Mbit to get CO -> LEX + $1/Mbit for transit), although line is only $6 more.
The cost for 1 Mbit full-clos would scale by $35 * n^2, where n is the total number of mbits to all customers in the ISP, with a small discount for users in the same LEX. Anyone care to pay that ?
The free market will only provide 2 things:
1) what the average users wants at affordable prices
2) everything else at a premium
Sadly, I don't think this is a market failure (although, in many markets there is a market failure, but deregulation won't help, not for bandwidth)
Its really lack of competition that drives the (vastly huge ripoff) prices consumers pay for internet service. Most ISPs have a monopoly, no competition. DSL cannot compete against cable internet. There are even laws in some states (bought by greedy ISPs) that prohibit cities from starting an ISP to compete and offer lower prices to their residents...talk about anti-competive practices!!
Cable internet (and cable tv, and gas/electricity and wired phone service) need to be run as non-profit public services, charged at actual cost only to consumers. .
Comcast is no longer enforcing their 250GB/month cap. From a friend that still works at Comcast. "I know there used to be one on your Comcast.com Account page but when they started letting people stream via XBox, it kinda screwed with those numbers because they said it wasn't going to impact customer's bandwidth cap. I tried pointing it out as in "how are we going to tell what is streaming traffic on Xbox vs someone's normal useage when it's all coming from the same IP?" They "assured" me they had it covered. The enforcement of the "data consumption threshold" was pretty much suspended after they found there wasn't an easy way to determine what traffic was what..... We keep being told something is coming but not sure when. They do actually have a different bootfile for the modem that I believe should be providing an individual IP for the Xbox (like the phone has it's own IP/provisioning as well) so eventually they may be able to figure something out but I've not heard much more on it recently. For the longest time the only way we could see any useage was to log into CMTS and look at modem's raw useage since it was last rebooted."
you also believe that increasing the per-gallon gasoline tax is supposed to discourage driving to work or home during rush hour.
Some countries do tax motor fuel to encourage use of mass transit.
You are everything that is wrong with consumers. Go educate yourself, please.
When I was 20 years old, I had a job delivering pizza for about 30 hours a week, which worked out great because I also still lived with my mother, and we just split the bills, and the apartment was the cheapest thing in town. So I also had one of these credit cards, which I payed the balance off of every month, and never had any intention of ever carrying a balance.
Then my mother found a boyfriend, and moved out to live with him.
So I started paying all of the bills, which didn't seem like a bad idea, since it was the absolute cheapest apartment in town, and I had a job, and delivering pizzas really doesn't pay bad when you consider that the drivers also get tips. Averaging $10 an hour when minimum wage is $5.35 isn't bad.
However, I eventually needed a few things. Like a new shower curtian, a plunger, a new pot to cook in, and other random little household things. ...and something to eat this week. Had I not had a credit card, I'd simply have run out of money, and been forced to move in with my mother again, or at least borrow some pots and a plunger and eat some ramen noodles. ...but since I had the card, I thought "well, I'm employed, I have the cheapest living in town, and I'm sure I can figure out a way to get a little more money eventually." After all, people are supposed to be able to pay their bills when they have a job, and I was young enough that I didn't think this was a big deal. ...and the credit card company kept sending me a letter every three months telling me that they'd raised my credit limit. It was initially just $200, but eventually went up to $5,000. So I just put my week's food on the credit card.
Eventually I also needed $100 in cash for something, so I went to an ATM and got a cash advance on that credit card. Of course, cash advances are charged at 20% interest, rather than the 15% interest of the normal balance, and when you send in a payment, they apply it to your normal balance, and so the portion of your bill which is charged at the higher interest rate continues to grow month after month because you can't make any payments on that portion until you can pay off the other portion entirely.
Then my car broke down. I went looking for a new one, and found a used one for $1800. Went looking for a loan because, again, I expected that an employed person should be on the safe side of income vs. expenses. My bank turned me down, as did another bank, but neither explained that the reason was because they were actually responsible lenders and cared whether or not someone would be able to easily repay the loan. Indeed, the second bank recommended I walk across the street to Citifinancial. I only needed a loan for $1600 since I'd already made a $200 down payment. They hooked me up with a loan that only cost $117 a month for three years. Not having a calculator on hand, I just sort of thought "$100 isn't bad" and, of course, I still naively assumed that since I wasn't a lazy fuck with no job, and I had every intention of repaying the loan, that everything would be OK. I'd later find out that they'd used a 25% APR on this loan. In school I'd been taught "never get a cash advance on a credit card for something large, you'll get a better rate if you get an actual loan." ...but, it seems that's not true. Indeed, they also talked me into buying insurance through them, and rather than just add the monthly payment to the bill, they added the payment for all three years to the loan, so I was paying interest on something I didn't even need to buy yet.
After about six months from the time this started, I went from being someone who always repaid my credit card in full every month to someone who had $4,000 credit card bill, and still owed $3000 in payments on the remaining $2100 principle of their $1600 car loan.
Of course, not all credit card companies are complete scum. I also had a Capital One card with a limit of $200. After having it for a few years, I accidentally went over
And this is news now
"The report found a much simpler reason: money." You think? DUH!!! I've always known that. It's BS that these big ISP's don't have the bandwidth to handle the data flow. The biggest ones definitely have the manpower and infrastructure to constantly upgrade and improve their networks, which is what they should be doing anyway with all the obscene amounts of $$$ we keep paying them. This is especially important for the mobile carriers (they're ISP's too, they serve Internet content), because more and more computing is being done over the smartphone and tablet now, and the wireless plans are mostly the ones with the data caps, right? My home ISP service is still unlimited access (unless I've just been grandfathered in with my two-year price protection plan). Anybody happen to know if Time Warner Road Runner service went to data capping?
All the bullshit argument on here is mind-boggling. I run a company that is the SECOND CLEC in the ENTIRE FUCKING STATE OF OREGON to EVER connect to remote (non-Central Office) cross-connects. We are self funded. And we're one of two companies in Oregon that lease copper to rural homes, but don't own it. All this mental masturbation about free market vs. state organized is COMPLETE BULLSHIT or BRILLIANT, either-or.
NOBODY else can serve some addresses that we can serve. It all comes down to people doing the actual FUCKING WORK to string the physical infrastructure to the end user. EVERYTHING ELSE IS TOTAL BULLSHIT. NOBODY leases copper lines out of non-CO cross connects in ALL OF OREGON except for our tiny company which found a way to serve certain remote cross-connects in Central Oregon, and Douglas Fast Net out of Roseburg.
Why do I point this out? GET OFF YOUR FUCKING ASSES AND START DOING THE FUCKING WORK. ALL OTHER CLECs are simply colocating in downtown Central Offices and milking business phone lines for all they're worth. They SKIM PROFITABLE BUSINESS SERVICE AND DO NOTHING TO REACH RESIDENTIAL CONSUMERS.
The CLECs are FAT AND LAZY. The ILECs are LOCKING THEM OUT OF ACCESS to DARK FIBER as per 2003/2004 FCC TRO/TRRO. AND RIGHTLY SO.
If anyone with both the technical and construction skills comes around to provide competitive service, or any service, support them.