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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.
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
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.
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.
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.
The market isn't free because the incumbents buy laws to keep status quo.
Obama's legacy: (N)othing (S)ecure (A)nywhere and (T)error (S)imulation (A)dministration
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
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 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
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!
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!
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
Because you're not really paying for data, you're paying for network access. It's more like local calling, where both sender and receiver pay a flat charge to get access to the network. Since the local network is owned by the telco, they don't have to pay anyone for usage, so you get to use it as much as you want once you have access.
With ISPs it's similar. 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. If you're sending too much data to Japan or wherever, TCP/IP has mechanisms to limit that. There's absolutely no reason to charge per byte for internet access.
Give me Classic Slashdot or give me death!
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.
No, you're the clueless one. When cable first came out in the early eighties (it was around in a very limited form in very few places in the seventies) there was no advertising whatever. None. Not on the cable channels; the only time you saw a commercial was when you were tuned to an over the air channel. Uncut, uninterrupted, commercial-free TV. Then when everybody got hooked on cable, THAT is when they started introducing ads... between shows. Then they started breaking the shows for commercials like OTA TV. Then they got even greedier and started showing commercials at the bottom of the screen while the actual content is playing.
No, son, YOU are the one unfamiliar with early cable, simply because you never saw early cable and assumed it was always fucked up like that.
Guess what else? Empty-V used to play music videos instead of stupid "reality" shows. Discovery used to have science instead of "trick my truck." History used to have the history of the Roman Empire and the History of Beer instead of "ice road truckers."
Guess what else? I shut my cable off. It's no longer worth the money. OTA, DVD, and web for me. Comcast can go fuck themselves, the greedy, shiftless bastards.
Free Martian Whores!
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.
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.
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.
While I agree that there may be some of that going on...
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?
Not likely. The capital costs for the infrastructure were paid for during the upgrades, and pretty much written off shortly thereafter. It doesn't take long for that to be accounted for in their accounting systems. So the operating costs are not nearly that bad, and certainly are not significantly high all the time.
This also doesn't take into account that they are selling customers different speeds over the same network. Straight-line networks (like DSL, Fibre) this generally makes sense since the provisioning of the single line can be handled very easily; however, it doesn't make sense for ring networks (like Cable) as they all share the same bandwidth regardless. So either everyone gets the lowest or highest common denominator - that is, everyone gets stuck to the lowest or highest speed of what was purchased by everyone participating in the ring; realistically it means the highest speed.
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,
Because of how they operate people are going to question it. Yes, they have a responsiblity to their shareholders (by law for public companies); but that is typically at odds with their customers.
what stops the customers from leaving to another company? Honestly is there? Lack of competition?
Lack of ability to change providers to another more meaninful on.
For DSL, the telcos share the lines as required by law; but the backend service is still managed by the same company operating the CO regardless of who you're paying to get the access from. It's the nature of the system. So if you don't like your DSL service from company A, switching to DSL service from company B isn't going to really change anything as Company C operating the CO provide service to both A and B - and may in fact be A or B to start with.
For Fibre, you only get three choices: (i) Verizon FIOS, (ii) AT&T u-Verse, or (iii) paying for the very expensive T1/T3/OC lines that businesses get - typically not something home owners do. And you don't typically get a choice of 'i' or 'ii'; usually only one of them is available if either.
For cable, the cable companies negotiate with municipalities and counties to lock in entire regions into their network. Don't like your cable company? Too bad, if you want Cable you only get one choice unless you move to another area; then you might get a different Cable provider but you still have the same problem if you don't like them either - and that's a rather costly way to change providers.
Satellite? Well, they still (typically) require a telephone line, but again - you get only a few choices, and in the US it's mostly limited to DirecTV or DISH (aka Dish Network).
So you might be able to switch between the various types of providers, but in any given category your options are typically very limited. Sadly, the companies behind the above get in the way of residents getting together to lease a line (e.g. T1/T3) to share - they have often taken the residents to court to get their exclusivity agreements with counties and municipalities enforced even when they didn't provide service yet to the area where the residents were.
Truth is like the sun. You can shut it out for a time, but it ain't goin' away. - Elvis Presley (source: imdb.com)
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.
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.
Depends on the local infrastructure. I could hit the closest DSLAM from my house with my spud gun, but because the Ma Bell switching center used to be located in downtown Bellevue all the telecom infrastructure in my neighborhood runs two miles northwest, half a mile east, and then two miles back south. They finally finished re-pulling fiber in our neighborhood earlier this year, so now I can get away from Comcast, but until then that was my only option for high speed internet connectivity.
"Think about how stupid the average person is. Now, realise that half of them are dumber than that." - George Carlin
...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.
Blah blah blah blah then you never actually state the actual reason why they permit that, which tells me you don't know what you're talking about. Store credit cards encourage people to shop with a given store. On other cards, the processor takes a cut of every transaction. There's money to be made even if you don't carry a balance, which is the reason credit card companies don't cancel cards that never have one.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
A... bad saying?