An Iowa ISP's Metered Pricing: What Will the Market Bear?

An anonymous reader writes "The East Buchanan Telephone Cooperative started charging cellular prices for home DSL internet service starting on January 1st, 2014. A 5GB plan costs $24.95 a month while a 25 GB plan will run $99.95 per month. 100 GB is the most data you can get in a package for $299.95 per month. Each additional GB is $5. They argue that the price increase is justified because their costs have increased by 900% since 2009. About half of their customers use less than 5 GB a month while their largest users use around 100 GB a month. They argue that the switch to measured internet will appropriately place the cost on their heaviest users. With the landmark Net Neutrality ruling this week will larger providers try to move to similar price models?"

Comments

It doesn't cost any more to serve more data

[Anonymous Coward]

Every price increase is just pure profit.

Re: It doesn't cost any more to serve more data

[Anonymous Coward]

Well as much as I don't agree with this yes it does. More data use by the end user means the ISP has to pay for bigger connections and redundant connections often at that. Yes cost goes up for everyone. However the price of the inter connections have gone down a lot since 2009 so not sure how they have seen a 900% increase other then by adding that many more customers.

Re:It doesn't cost any more to serve more data

[khasim]

It depends upon what the ISP's upstream connection is. In Alaska there were problems because the pipes were only so big but demand was bigger.

But the larger question here is ... is there competition? If someone doesn't like the service/pricing of The East Buchanan Telephone Cooperative can they get equivalent service from a different provider?

I, personally, like the idea of paying for what you use. Provided that there is competition. Otherwise the "average" will keep dropping as people try to limit their expenses and the price will keep creeping up.

Re:It doesn't cost any more to serve more data

[beelsebob]

Score: -1 Factually incorrect.

It absolutely costs more to install a bigger pipe for the ISP. The fact that the ISP has to over provision, and hence a small increase in bandwidth can be absorbed without instantly needing to upgrade the pipe does not mean that that extra bandwidth is free.

Switches, cables and admin systems all cost money, and these costs all increase with the amount of bandwidth running through the system.

I actually applaud them for moving to a metered bandwidth model – it makes sense. What I don't applaud is the blatant gouging. The prices should be roughly 100 times lower than the ones they are offering.

Re:It doesn't cost any more to serve more data

[Bengie]

If Alaska filled their pipe with fiber instead of oil, it'd be much faster.

Re:It doesn't cost any more to serve more data

[DarkOx]

Except none of that really matters; because all the 5gb per month users all use the service at the same time. The folks doing north of 100gb are all torrenting or running netflix at all hours of the day.

Realistically if the want to be able to offer actually decent service they have to have the capacity to handle 6pm when everyone starts getting home from work, it costs them nothing to for the high volume folks to be torrenting away at 3am, and nothing for the soccer moms to put Dora the explorer in at 11am while they fix lunch for the runts.

Re:It doesn't cost any more to serve more data

[rolfwind]

I, personally, like the idea of paying for what you use.

People already paid for what they used. It's called bandwidth, and they brought the tier level they needed. That it was on 24/7 just meant that they got 30 days of it. All the companies are doing is jacking up the price while giving you less time.

This isn't water or electricity. Bandwidth is not a limited resource in the same way. This is just a company trying to keep overselling what it has and not upgrade.

Re:It doesn't cost any more to serve more data

[ifiwereasculptor]

Since the problem is maintaining transfer speed, it would make more sense to offer heavily discounted plans that would usually provide, say, 35mpbs, but only 1mbps at peak hours (say, 6pm to 10pm).

Re:It doesn't cost any more to serve more data

[complete loony]

The last mile pipe to your house may be mostly unused, and free to push more data. But the rest of the network interconnects are usually built based on peak aggregate usage. The backbone connections on the internet have been flooded by only 75K misbehaving servers.

Aggregate backbone traffic may be cheap, but it is a limited resource.

Re: It doesn't cost any more to serve more data

[Bengie]

Trunk bandwidth is the cheapest part of being an ISP as long as you're not out in the middle of no-where. At $0.45/mbit for dedicated backbone connection. Bandwidth is charged by 95th percentile. That means the customer must average about 2 hours of transfer per day all month long. In order to consume 100GB, that means an average of 7mb/s for 2 hours every day, or about 2 Netflix streams. That would cost the ISP about $3.5, but they turn around and re-sell it for $300. Sounds like easy money. You just need to get your foot in the door. Once you're "that" ISP, you just print cash.

Re:It doesn't cost any more to serve more data

[Bengie]

Around here, Schools can get access to a co-op that sells 1gb/1gb for $300/month and that comes with a business class SLA and guaranteed speeds. It's a self-sustaining business with no government or private support. That is the cost of 1gb/s, $300.

Re:It doesn't cost any more to serve more data

[robl]

> What I don't applaud is the blatant gouging. The prices should be roughly 100 times lower than the ones they are offering.

The ISP's costs are still probably about 1GB for maybe $0.01. But this is just simple demand and supply. The demand is increasing and the supply is not. If you are the monopoly and you can control the supply (which they can) then they can dictate the price.

It's not any different than a baseball star limiting the number of signed baseballs he gives to fans every year (say 10) while keeping 10,000 more in his closet.

Re: It doesn't cost any more to serve more data

[cheater512]

Which backhaul provider charges $5/gig?

Re:It doesn't cost any more to serve more data

[Ichijo]

Bandwidth is not a limited resource in the same way.

Sure it is. You can saturate a network switch.

Re: It doesn't cost any more to serve more data

[buddyglass]

Seems like it would work a bit like electricity provision, though, where you have buy backbone bandwidth based on "peak" usage vs. average. How does that change the equation, if at all?

Re:It doesn't cost any more to serve more data

[mellon]

They aren't charging the low-bandwidth customers for narrower pipes. They are charging for less data. The pipes do cost money. The data does too, but not nearly as much. So really they are trying to push the cost, which is mostly the same for all customers, onto those who use it the most.

Re: It doesn't cost any more to serve more data

[bmajik]

So you're telling me I can get a 100mbit upstream link with resale rights for $45/mo?

That's astounding, since as near as I can tell, getting any kind of dedicated circuit at all is over $400/mo, and any CIR is ontop of that.

I worked in the ISP industry a long time ago. We had a frac DS-3 to UUNet. Our bill was either 4 or 5 digits, per month.

It was provisioned over Metro SONET, iirc, so it's not like we were paying off some huge trench fee.

We were selling 56k Frame Relays for more than $45/mo. Think 10x that cost.

Speeds have certainly gone up since then -- a lot. But prices haven't come down. If you want a carrier grade connection, you pay.

As an aside, I recently moved to a rural location where there is no broadband provider. I called a nearby ISP that serves the closest town. They said $10-15k per mile to trench and bore for fiber, plus the costs of actually laying fiber.

There's no CATV here. There's no possibility of DSL here. HughesNet says its oversubscribed in my area and either sells only their slowest tier or nothing at all, depending on who you believe.

So I'm using a Verizon LTE box. Metered internet really sucks, and its very expensive. It changes your usage habits entirely. We cancelled our Netflix streaming and went back to discs. I never watch stupid youtube movies any more because they're not worth the bandwidth charges I'd rack up watching them.

I've been looking for tower space in a nearby town that I can lease, so I can put up some UBNT gear and do a point-to-point shot from their tower to a tower on my property, and backhaul unmetered internet from a place that has it to my farm.

I've spoken to a few neighbors; all of them who have internet service use cellular data. I think I could build out a pretty slick rural wifi and cover my costs with it -- but that's entirely dependent on being able get some kind of uplink out here.

Doing internet service in a rural area is hard and expensive.

Re: It doesn't cost any more to serve more data

[mishehu]

The running of wiresl is what costs the money, not the upgrading of the equipment once the wires are all run. If anything, when it comes to normal customer usage scenarios, it's the interconnections that cost, and they cost regardless of whether they're being used or not. There is a huge difference between me watching 100 GB of Netflix traffic that originated right from East Buchanan Coop's racks to my endpoint on East Buchanan Coop's network than if it came from somewhere outside of their network.

As it is, your equipment is always sending some sort of traffic at all times, even if they (the data on the wire) only serve to maintain the signal on an otherwise idle line. That's just how it works.

Re:It doesn't cost any more to serve more data

[crashumbc]

incorrect, in true capitalistic fashion they see a chance to rape and price gauge the consumer for pure profit...

the clients (victims) have no alternative. so they make up a fake excuse and rape away...

'Murica at its best!

Re: It doesn't cost any more to serve more data

[Bengie]

I assume most ISPs don't get 100mb links. You can purchase dark fiber for about $125/mile, get to your local IX, which will probably run you a $25k bill on the dark fiber, then you purchase bandwidth from HE for $0.45/mbit after paying $5k/month for 100gb/s peering link at the IX. You still have to pay in the 5 digits, but almost all of the cost is the infrastructure, the bandwidth is cheap.

100mb is about $3k/month from Level 3 and 1gb is about $6k/month. 10x the speed for 2x the price seems to be common scaling factor. At some point, the bandwidth is really really cheap.

Re:It doesn't cost any more to serve more data

[Eskarel]

Of course it is, it's not like you just hook up a cable and bang unlimited data. You can only fit so much data down any given pipe which means either slower connections or fewer connections, the laws of physics still apply just because it's electrons and photons. Any given connection has only so much capacity in terms of number of users and speed.

Re:It doesn't cost any more to serve more data

[Eskarel]

Except that for one thing, up until the recent court case any kind of traffic shaping was a violation of FCC regulations and for another a 1mbps shaped connection would be unusable. You can't take a 35mbps pipe and make it a 1 mbps pipe, all you can really do for traffic shaping is to drop packets to keep the TCP transfer window small enough to get the speed you want, it makes your service essentially unusable even for uses which don't need the speed(basic web browsing is virtually unusable for instance). I know this because we have data caps which then shape your traffic when you go over the caps. It gets shaped to 64kbps which is lower than what you're suggesting, but still should be more than adequate for basic web surfing. It isn't though.

Data caps take some getting used to, and they're of course horrible for the cord cutters because they don't get subsidized service, but what they generally do do is stop companies from deliberately over subscribing. If increased demand is associated with increased revenue companies are a lot more motivated to keep their infrastructure up to date, after all if the guy on the 100 gig plan can't actually get more than 5 gig downloaded he's going to drop his 100 gig plan and you lose revenue.

Re: It doesn't cost any more to serve more data

[DeSigna]

Not sure what you mean by "trunk bandwidth", it could be either backhaul or transit.

Backhaul (from customer to ISP POP) needs to match closely or exceed end customer bandwidth. Most last mile wholesale providers will offer a 1:1 or low contention SLA, although some "manage" the bandwidth (they oversubscribe until someone complains). However, if an ISP can't get this, or they build it themselves, they need to make sure your backhaul interconnects are overbuilt enough to deal with expected growth in line with however long it would take to build additional capacity. This is the primary cost of end user connectivity. The local loop price is usually bundled in with backhaul for costing.

Transit is cheaper and much easier to manage, these are your interconnects to other networks. It needs to be overbuilt as well to exceed peak usage by enough margin to allow continual upgrades, but aggregate usage across an ISP is generally much lower than the sum of its customers. Transit physical interconnects are usually delivered directly into an ISP's POP (a location commonly shared with other network users and ISPs, like a regional datacentre) and benefit from economy of scale.

Discussing the cost of pure transit isn't too useful. Heavy users smash both backhaul and transit if they go nuts, and this usage can be much harder to predict and manage than 1000+ users calmly watching youtube or emailing kids for 5GB/mo. It is much easier at large scale, but for a small, non-profit rural co-op I imagine the handful of big users they have could get very expensive.

In the pricing model, there needs to be an element of discouragement (suddenly heavy users with deep pockets can still degrade network quality for everyone else) as well as recouping the cost of required upgrades and improvements to support the traffic. It is ridiculous for a non-profit to massively overcharge on the scale you're suggesting for no reason.

I'm not sure what Net Neutrality from the summary has to do with any of this either - this is usage-based billing over a flat pipe, not charging/throttling based on traffic type or destination. I may be a bit biased as I'm from somewhere where quota plans are the norm.

Re: It doesn't cost any more to serve more data

[bmajik]

I'm going to guess that in rural Iowa, you don't have any peers or peering agreements.

You are buying upstream from a provider.

And it is going to be expensive.

Do you disagree?

The ISP in question is mentioned, right? So it should be possible to figure out who they are buying links from and if they have any other ways in/out of their AS(es), right?

Want to give it a shot?

Re: It doesn't cost any more to serve more data

[Guspaz]

So you're telling me I can get a 100mbit upstream link with resale rights for $45/mo?

That's astounding, since as near as I can tell, getting any kind of dedicated circuit at all is over $400/mo, and any CIR is ontop of that.

You're confusing transit costs with delivery costs. I'm not sure if you can get a 100 Mbps link for $45/mth, but you definitely can get a 1000Mbps link for $450.

Transit is so cheap these days that it's almost free; it's very cheap, keeps getting cheaper, while many other costs are not getting any cheaper (electricity prices don't ever seem to go down, for example). As a result, transit seems to be making up a smaller and smaller percentage of costs.

Let's take the example of wholesale internet service in Canada. Say that you want to service 1000 customers, and that each customer uses at peak 2Mbps on average. You've got $15 for the DSL or cable line, roughly $3 for the share of the incumbent aggregation network connection, $40 for the aggregation capacity costs, and $1 for the transit. On top of this, there are obviously colocation costs, manpower, office space, etc. But let's just pretend the only costs are the actual network-related costs: you're already at $59, and the transit is less than two percent of that. Once you add in all the other costs, transit is basically inconsequential.

Re:It doesn't cost any more to serve more data

[thebes]

Simple solution: real time (or updated hourly) traffic stats for the ISP backbone connection. Allow users unlimited use (unmetered) during the times when traffic is significantly less. As others have said, if the hardware is provisioned, then as long as it is not being taxed to the limit when you want to use it, then you shouldn't really be charged anything significant for using it.

Teksavvy does this on DSL in Canada.

Re:It doesn't cost any more to serve more data

[Zmobie]

What in the hell are you talking about? He is probably referring to basic traffic bandwidth throttling which easily accomplishes the goal of reducing strain on the network. THAT has been legal and practiced for, hell I don't even know how long now. Hell, talking to the AT&T techs for my home line, that is normal practice. They ACTUALLY provide me with north of 70 mbps on the overall data line, but for internet traffic it is limited to use 24 mbps at any given time. TV, phones, and general errors on the line account for the rest.

This is easily implementable too, considering for one, this is how cable connection used to function basically. Everyone was connected to one line with a bottle neck and regulated to certain speeds automatically (in that case it was by virtue of physical limitation). This can also be implemented on most home routers pretty easily too, by just limiting the allowed amount of bandwidth on a time-frame (I can even do it by device IP/MAC address). I know because I have done it on them before, and I've looked at this while at work just for shit and giggles on high end switches and routers (we don't ever need to implement this sort of thing on customer networks though because they are closed networks that are not going to the internet, it is set up for their specific purposes).

Re:It doesn't cost any more to serve more data

[hendrips]

It's a co-operative. There's no profit to be had, by definition. Well, unless the directors are committing fraud, but that's already illegal.

Re:It doesn't cost any more to serve more data

[Zmobie]

No it is actually quite a bit different considering you don't need to buy signed baseballs for, well, anything other than collecting....

There are anti-trust laws on the books specifically to prevent this sort of bullshit from happening, but because ISPs are still pretty unregulated they are getting away with damn near murder by doing this bullshit. ONE game update for me would wipe out my data for the month if I were stuck on a 5GB plan, and 300 fucking dollars for 100 GB? I would be fucked. I pay $200 for full TV, phone (VoIP), AND internet (with an un-enforced 250GB data cap, gotta love being outside AT&T's monitoring tool delivery area). I EASILY use that amount of data every month, especially if I work from home at all.

I realize this is a rural area and all but basic principle should dictate they should not get away with the ridiculous gouging they are doing here. If this sets any kind of precedence then man, the internet was sure nice while it lasted. I'd rather start buying and daisy chaining my own fucking fiber so I could do things with my friends then start paying that kind of ridiculous money. I'll mail external drives and flash drives around to people for big shit. I mean seriously, this is getting to where it defeats the point of the damn internet...

Re: It doesn't cost any more to serve more data

[Dunbal]

Yes that is exactly what the telcos want to do with metering - fuck you with it.

Re:It doesn't cost any more to serve more data

[Dunbal]

If you've oversold your network and you can't afford to upgrade, you don't deserve to stay in business.

Re:It doesn't cost any more to serve more data

[jader3rd]

I, personally, like the idea of paying for what you use. Provided that there is competition. Otherwise the "average" will keep dropping as people try to limit their expenses and the price will keep creeping up.

Even with no competition, isn't it better than a monopoly over charging the majority, to subsidize the few large consumers?

Re:It doesn't cost any more to serve more data

[jader3rd]

Bandwidth is not a limited resource in the same way.

A lot of hardware is pretty dynamic these days. If only a little bit of data is coming across they switch to lower power settings, but if lots of data is coming across they'll switch to higher power consumption settings. So the more data that gets moved around the more electricity is going to be consumed.

Re:It doesn't cost any more to serve more data

[Eskarel]

Net Neutrality policy requires that all packets are treated equally, regardless of source, destination or content, you cannot implement any kind of traffic shaping while being compliant with this guideline. The fact that your home telephone line is not capable of transferring more than 24 mbps is due to the physical limitations of the copper, not anything they are doing, they could provide you with the entire trunk line just for yourself but you'd never actually be able to see any of it because ADSL can't transfer that much data.

Physical limitations aren't anything like virtual limitations. Essentially the way that TCP works is that there is what is referred to as a window, which defines how many packets the system will allow at any given time which have yet to receive an ACK. If packets are dropped or time out, the TCP stack will reduce the size of this window until they stop being dropped, if packets aren't being dropped then it will gradually increase the size of the window until they start to be. In this way the TCP stack finds the maximum sustainable throughput you can achieve at any given time. When an ISP shapes your traffic(your home line and the cable modem ARE NOT SHAPED) it does so by deliberately dropping packets until the TCP window shrinks to the desired speed. This plays merry havoc with anything that is expecting low latency(not high speed) and actually impacts a whole bunch of other stuff. The fact that these algorithms are usually poorly implemented exacerbates, but does not cause this issue.

At the router level you can often configure what is known as Quality of Service which is queue jumping for packets of certain kinds. Doing this is again a violation of net neutrality, but even ignoring that, unless your network is dangerously oversubscribed QoS won't reduce your speed from 35 mbps to 1 mbps, it also tends to be configured into the router settings(which is why it doesn't break connections as badly) which makes it awfully difficult to create adhoc rules. If you were going to use something like that to implement traffic shaping in the manner you describe you'd have to take network infrastructure offline every time someone changed their plan.

Re: It doesn't cost any more to serve more data

[Casandro]

Well the price of the actual "Internet side" of such an operator is just insanely small. The far bigger cost is the line to the end user, billing, support and so on. It doesn't matter if your user is using nothing or the full line, it won't make a dent on your profit... Unless of course you refuse to update your network regularly. Then you will quickly run into trouble.

Re:It doesn't cost any more to serve more data

[Draknor]

Simple technical solution, maybe -- but I imagine your billing & support costs would go through the roof, with everyone calling in not understanding why the internet was fast yesterday but slow today, or they got charged more this month then last month.

I don't know about Teksavvy, but given it's name I'm guessing it's users probably understand a bit more about what they are doing. A small rural telco coop in Iowa -- not as likely to grok this. Esp if most of them are using 5 GB / month -- I downloaded more than that in a 24 hour period just patching video games.

Re:It doesn't cost any more to serve more data

[Zmobie]

No no no. My phone line is VoIP with AT&T, those limits are artificially imposed at the switch level. In fact, the copper lines for my house only run maybe a hundred feet, and then it switches to full fiber (it is all cat 5e+, I have actually seen the box that it transitions to fiber). The copper that is running can easily run 1 gbps+ if they didn't have bottlenecks further upstream.

I am friends with several techs at AT&T that do installs and have discussed this with them. You can limit the traffic volume coming from a location really easily without "shaping" traffic like you say at all. This has been done for years and will probably continue to be done for a long time. Hell, it can be done at a SOFTWARE level pretty easily and I know because I have seen source code for doing it. I really don't know how to explain this any differently. Google bandwidth throttling I guess?

  This has been practiced for a while and does not fall under net neutrality guidelines. Net neutrality simply states that all traffic should be treated equally and they can't do premium servicing etc. Net neutrality has nothing to do with them putting a limit on how much data you can draw and at what speeds. How exactly do you think they enforce speed and bandwidth packages now? Physical limitations? If I downgraded my speed package to 12 mbps now, AT&T makes no physical changes, they change configuration on their end only and it just limits how much data I can request.

Re:It doesn't cost any more to serve more data

[stenvar]

Will you take off your anti-corporate blinders and get a f*cking clue?

It's a cooperative, not a corporation. The customers are the owners. The victims are the perpetrators. They are raping themselves.

And if they don't have an alternative service in their area, it is likely because they themselves kept it out.

Yeah, "'Murica at its best", namely the kind of people who want to nationalize, regulate, and de-privatize everything with promises that it works better, and actually making things work worse and worse.

Re: It doesn't cost any more to serve more data

[hab136]

In fact you can do exactly that. http://en.wikipedia.org/wiki/Free-space_optical_communication

Search for "FSO laser". Example: http://www.lightpointe.com/freespaceoptics.html

Re:It doesn't cost any more to serve more data

[N1AK]

Bollocks.

If operating your ISP costs $10,000 a month then you need to make, more than, $10,000 from your customers to keep the lights on. If you have 100 customers you could charge a flat rate of $100 each or you could tier it so that the amount customers pay is related to the level of use.

You can debate the pricing all you want, and it seems pretty ludicrous, but there's nothing wrong with charging customers based on consumption rather than charging everyone the same amount.

Re:It doesn't cost any more to serve more data

[nojayuk]

That sort of operation means a single coax or fiber cable pull, a modem unit at either end and an ongoing contract with the school or other commercial customers that could run for decades rolling over each billing period on automatic payments. $300/month is a recipe to print money for the supplier even with the SLA support costs included.

Re:It doesn't cost any more to serve more data

[grahamm]

Reducing the demand by charging is not a magic bullet. Even if every (or most) customers cut down on the amount of streaming, there will still be a problem if too many of them choose to stream at the same time (eg a popular TV show or live event).

Re: It doesn't cost any more to serve more data

[Daniel Hoffmann]

I wouldn't mind they charging extra for more GB per month. The problem lies in the absolutely ridiculous prices they ask for more, there is no way in hell the extra GBs per month actually cost that much for them. Also they shouldn't count the transfers that happen during low-traffic hours (like 1am->7am), If they did that I would gladly pay $1 to $2 per 10GB.

Re:It doesn't cost any more to serve more data

[Ardyvee]

I'm sure that if you ask anybody who uses torrents and downloads (or uploads), they would be more than happy to do it during night time, since it also affects their own bandwidth (so chances are either they'll be doing nothing during that time, or they will download later). At least, I know that I would if asked. It's rather trivial to configure the torrent application to only transfer during a certain time.

Re:It doesn't cost any more to serve more data

[tmosley]

But how are you going to get the dumptrucks through? It's all just a series of tubes, isn't it?

Re: It doesn't cost any more to serve more data

[J. T. MacLeod]

I'm not sure if you can get a 100 Mbps link for $45/mth, but you definitely can get a 1000Mbps link for $450.

Transit is so cheap these days that it's almost free; it's very cheap, keeps getting cheaper, while many other costs are not getting any cheaper (electricity prices don't ever seem to go down, for example). As a result, transit seems to be making up a smaller and smaller percentage of costs.

I agree with you on the general principle involved here (and the pricing scheme being discussed here is nonsensical), but transit is only that cheap at major junctions. When you get farther away, it gets much more expensive. Additionally, in rural areas, fewer customers have to support cost of the backhaul infrastructure to make it out that far (and trying to economize .

It gets expensive for rural customers on both levels.

Re:It doesn't cost any more to serve more data

[tmosley]

>ISPs
>Unregulated

I think you don't know the meaning of at least one of those terms. If ISPs were unregulated, then you would have 10,000 of them and prices would be close to their marginal costs, rather than hundreds of times more.

Or did you mean that their PRICING is unregulated? Why not just get rid of the regulation that creates the monopoly rather than creating more bureaucracy that costs more taxpayer money to run while also increasing ISP costs?

Re:It doesn't cost any more to serve more data

[Zmobie]

The regulations you are referring to is a problem in some areas I agree, where only certain groups are allowed to do whatever, but in even mid size markets there is not much for regulations that exist to keep competition at bay.

Half of the monopolies that have been created are because the companies are specifically expanding in areas the others don't exist. Right now this is seen as smart business investment, basically they are expanding "the pie" so to speak and going into areas where the service is desired but not offered yet, which is a no brainer business move.

The problem is in large markets where things are fairly saturated already, they have more or less entered into a silently understood agreement to stay the hell out of each other's territory and instead just gouge the ever living shit out of the customer base they already claimed. Without a way to actually prove they are doing this, they will continue to get away with it until they have saturated everything (which will take forever to actually do, especially considering things like Google Fiber and AT&T Fiber are the next step in service providing, previous ones being internet service in general with dial-up, then cable, then DSL, etc.). They can easily hide under the guise that they are trying to bring better connections to more people. That may be true to an extent, but on the side they know what the hell they are doing by jacking prices up now and just making this the expected norm. It is probably disgusting how high a profit margin they keep.

Seriously look at a service map of Dallas for instance, Verizon and AT&T are literally expanding along the each other's business line and there is VERY little overlap. There is no other provider to speak of because the investment cost is way too high in order to get initial service set up and they can strangle these businesses out before they have a chance.

I general don't like having to layer regulations as I feel like it just bloats and convolutes the system, but most large businesses are not good stewards and some amount of regulation on what they can charge is probably necessary for the time being at least. Once the markets are forced to overlap and real competition can kick in (the backbone of a free market economy), the problem won't be as bad imho.

Re: It doesn't cost any more to serve more data

[Bengie]

http://bgp.he.net/AS5056 Looks like XO comm is their biggest with around 50% and Cogent and Spring mostly sharing the other 50%, based on blocks routed.

Re: It doesn't cost any more to serve more data

[Bengie]

The trunk infrastructure is basically free compared to the last mile infrastructure. After dropping $100mil to connect a few people on the last mile, paying $25k/month to get a fiber link to an IX in the next state is less than a rounding error on your last mile maintenance costs.

Re: It doesn't cost any more to serve more data

[Bengie]

In batches of 1gb, L3 charges about $6/mbit. Once you get about 100gb increments, it's almost $1/mbit. Ohh noooesss, double the price.. freak out. Even at $6/mbit, there is still A LOT of room for profit.

Re: It doesn't cost any more to serve more data

[Bengie]

they need to make sure your backhaul interconnects are overbuilt enough to deal with expected growth in line with however long it would take to build additional capacity

That's the beauty of fiber. I have a 1gb fiber ring connecting me from my house to my ISP's trunk. No "pop" involved. Come on over and get a 30/30 dedicated connection for $60/month. Their last mile is not over-subscribed, they can handle everyone running 1gb/1gb at the same time. What can't handle it is their trunk. The only planning they need to worry about is upgrading their trunk for the foreseeable future. How much does one of these networks cost? About $1,800 per house passed.

Anyway, what do you mean by "make sure your backhaul interconnects are overbuilt enough"? A single fiber can move 16tb/s of data right now with commercially available Dense Wave Division Multiplexers and can accept any mixture of 10gb-400gb ports and newer tech can push 1pb/s over a single fiber. How much data are these interconnects supposed to be handling anyway, more than 16tb/s?

Re:It doesn't cost any more to serve more data

[Bengie]

Bandwidth is so cheap that the act of tracking someone's usage costs more than the bandwidth they use. It's cheaper to not monitor and just build your network to handle what you sell.

Re:It doesn't cost any more to serve more data

[Bengie]

Switches, cables and admin systems all cost money, and these costs all increase with the amount of bandwidth running through the system.

You're doing it wrong. With 400gb/s ports and 1pb/s routers that you can get, I don't see how messily 100mb/s residential connections that are on average 5% active during peak hours can make a multi tb/s router even flinch.

Re:It doesn't cost any more to serve more data

[afidel]

Comcast for all their faults actually had the proper solution for this problem, as a node becomes congested they look at the top few percent of users and throttle their connection, if the top few percent doesn't alleviate the congestion they move on to the next few percent, etc. Once they reach ~10% of users being throttled they upgrade the backhaul for the node or split the node depending on where the congestion is. None of the shenanigans with monthly download limits or metered billing, attack the actual problem. Unfortunately they later added on a monthly download limit (though at 250GB it is pretty generous compared to their peers). Comcast even published their system as rfc6057.

Re:It doesn't cost any more to serve more data

[afidel]

Nope, net neutrality said you had to be neutral with respect to content, it did nothing to restrict normal operations of ISP's and their network management. In fact Comcast came out with a content neutral traffic management system (rfc6057) specifically to comply with net neutrality.

Re:It doesn't cost any more to serve more data

[Eskarel]

You can't have any meaningful level of net neutrality without preventing filtration based source and destination, if the directives truly didn't protect against doing that then we've lost not a damned thing by having it overturned. Want to get people using your own system instead of Netflix, downgrade traffic to Netflix, you're not filtering on content, you're filtering on destination. Don't like Google, same deal. You can't have any kind of conditional traffic shaping while still maintaining meaningful net neutrality.

Re:It doesn't cost any more to serve more data

[Eskarel]

No no no. My phone line is VoIP with AT&T, those limits are artificially imposed at the switch level. In fact, the copper lines for my house only run maybe a hundred feet, and then it switches to full fiber (it is all cat 5e+, I have actually seen the box that it transitions to fiber). The copper that is running can easily run 1 gbps+ if they didn't have bottlenecks further upstream.

I am friends with several techs at AT&T that do installs and have discussed this with them. You can limit the traffic volume coming from a location really easily without "shaping" traffic like you say at all. This has been done for years and will probably continue to be done for a long time. Hell, it can be done at a SOFTWARE level pretty easily and I know because I have seen source code for doing it. I really don't know how to explain this any differently. Google bandwidth throttling I guess?

All bandwidth throttling is done by dropping packets or causing timeouts. It can be done in software, it can be done in hardware, but it's done by dropping or delaying packets. It works that way because that's how TCP's congestion control algorithms work. I've not only seen source code to do it, I actually had to implement some TCP congestion control algorithms at uni. TCP is designed to use as much bandwidth as the link between you and the source can handle. It sends more and more data until it's either sent everything it has to send or packets start failing to return before they timeout. Yes you can easily throttle connections, but you do it by dropping packets and if the algorithm you use to determine which packets you drop isn't very good it basically wipes out the network connection. Most high end switches have pretty decent algorithms which don't entirely suck(so long as the link isn't saturated anyway), but those are fixed, not ad hoc. That is, it's not too terribly to reduce you to 24 mbps all the time, but limiting you sometimes is much harder. It'd be possible for you since you've got FTTP, but for connecting to a DSLAM it's pretty well impossible to actually implement in hardware.

This has been practiced for a while and does not fall under net neutrality guidelines. Net neutrality simply states that all traffic should be treated equally and they can't do premium servicing etc.

What exactly do you think throttling some connections and not others is if it's not treating traffic differently?

Net neutrality has nothing to do with them putting a limit on how much data you can draw and at what speeds. How exactly do you think they enforce speed and bandwidth packages now? Physical limitations? If I downgraded my speed package to 12 mbps now, AT&T makes no physical changes, they change configuration on their end only and it just limits how much data I can request.

You have FTTP which is a completely different situation from most people and offers control which isn't available in most cases. Why exactly you would build FTTP out to any large number of customers just to offer them speeds they could get on ADSL I'm not sure, but apparently they have.

Re:It doesn't cost any more to serve more data

[Zmobie]

All bandwidth throttling is done by dropping packets or causing timeouts. It can be done in software, it can be done in hardware, but it's done by dropping or delaying packets. It works that way because that's how TCP's congestion control algorithms work. I've not only seen source code to do it, I actually had to implement some TCP congestion control algorithms at uni. TCP is designed to use as much bandwidth as the link between you and the source can handle. It sends more and more data until it's either sent everything it has to send or packets start failing to return before they timeout. Yes you can easily throttle connections, but you do it by dropping packets and if the algorithm you use to determine which packets you drop isn't very good it basically wipes out the network connection. Most high end switches have pretty decent algorithms which don't entirely suck(so long as the link isn't saturated anyway), but those are fixed, not ad hoc. That is, it's not too terribly to reduce you to 24 mbps all the time, but limiting you sometimes is much harder. It'd be possible for you since you've got FTTP, but for connecting to a DSLAM it's pretty well impossible to actually implement in hardware.

It can be implemented on a window (my router at home can do it) for general TCP traffic. I can actually set traffic usage by hourly time frame for the entire day. Yes, you can't ad hoc do it based on current network allocation, but you can impose limitations preemptively by analyzing trends in traffic usage (it isn't quite ideal but it is a significant improvement over just letting it police itself and drop packets randomly causing serious instability). That is what I was referring to. I am well aware there is no ad hoc throttling algorithm, if I could figure one out I'd be damn near a billionaire with the money Cisco alone would throw at me.

What exactly do you think throttling some connections and not others is if it's not treating traffic differently?

Throttling certain SOURCES (i.e. all their traffic types) does not fall under net neutrality guidelines. Now should that fall under FCC regulations is a different story, but it isn't net neutrality. They can't throttle certain types of traffic, but they are allowed to throttle entire sources. They in fact have to for enforcing package limitations.

You have FTTP which is a completely different situation from most people and offers control which isn't available in most cases. Why exactly you would build FTTP out to any large number of customers just to offer them speeds they could get on ADSL I'm not sure, but apparently they have.

Main reason, expandability. Eventually these speeds will be base line though granted it will be a while from now. The ones lagging behind now will still lag behind then, and they will milk that infrastructure for all it is worth.

Re: It doesn't cost any more to serve more data

[Bengie]

There are some good "googlings" about 95th percentile. It's like a median, except instead of the 50% mid-point, you look at the 95%. In the end, transfering 100mb/s 24 hours a day or transferring 100mb/s 1.5 hours per day will land you with the same bill, even if you burst up to 200mb/s for 30 minutes.

How has their cost increased?

[Anonymous Coward]

How has their cost increased exactly? Unless they mean they are now oversubscribing the infrastructure they have by a lot and its getting to a point where they get forced to upgrade

Re:How has their cost increased?

[daninaustin]

Yes, but the backhaul circuit prices have fallen considerably in those 5 years. You don't need to oversell them by 20-50x to make the same profit.

Re:How has their cost increased?

[arielCo]

*All* network infrastructure is oversubscribed, in the sense that there's no way in hell that they can give everyone the rated speed at the same time. Same as with electricity (something about everyone turning their on hair dryer) or roads.

Re:How has their cost increased?

[sjames]

So you need to increase prices by %10 to cover the added upstream, but you notice there isn't any competition so you have a %10000 increase instead. CHA-CHING!

Re:How has their cost increased?

[Jane Q. Public]

"How has their cost increased exactly? Unless they mean they are now oversubscribing the infrastructure they have by a lot and its getting to a point where they get forced to upgrade"

Higher cost or not, their price is WAY too high! Hell, we already know internet in the U.S. costs too much, but I get unlimited internet (no capacity limit) of 20MBps for $70. In practice, I do think there is a cap of 250GB per month, at which point they will probably ask you to use less bandwidth.

$300 for 100GB is just plain outrageous. I'd tell them to piss off and get satellite, if that was the only other option.

Re:How has their cost increased?

[firex726]

Except that they have already been given subsidies and fees since the 90's with the expectation that they would carry out needed maintenance and upgrades on their network to support the growing demand.

The only way this makes sense is if the actual hardware itself has increased 900%, which in fact it's actually gotten cheaper while having greater support.

Welcome to Australia

[thatkid_2002]

This is the norm for us... Though we are finally starting to get somewhat reasonably priced Unlimited* plans now.

* Unlimited plan may be limited

Re:Welcome to Australia

[exomondo]

This is the norm for us...

Really? I've always been shaped when I hit my data cap on broadband, never charged additional for overages. And I've certainly never paid anywhere near the prices they are charging (unless you count the way I used to pay for 'hours' on my old dialup connections, getting 5GB on dialup would take quite a while).

Re:Welcome to Australia

[Harlequin80]

Though $200 for 100gb seems a little harsh even by Aussie standards let alone the US "I want it all" standards. I'm on 300gb for $130....

That said I was one of the original Optus cable internet customers where you got unlimited internet over HFC (Hybrid Fibre Coax). That was great for a few years and then they introduce their fair usage policy which was you couldn't exceed 10 times the average user. This was a bitch to monitor as you had no idea what an average user did and I apparantly was not an average user. Then finally they brought in a 3gb per month limit. There wasn't even other plans to choose from. Fortunately at that time we saw an explosion of ADSL2 providers and optus had to compete to keep their customers and now their HFC is one of the best value options (as long as you aren't badly contended).

Re:Welcome to Australia

[Anonymous Coward]

I have used iiNet for about 18 months. On ADSL2 I currently pay $59 a month for 300GB of data (Home-3 Turbo plan) plus Telstra line rental. You might want to shop around.

Re:Welcome to Australia

[Cimexus]

No, this is nothing like Australia. Those rates are obscene. Australia may have metered internet but the prices are far, far lower.

25 USD for 5 GB? (Australian ISPs would typically give you ~50 GB for $30 AUD, which is roughly equal in value)

99.95 USD for a paltry 25 GB? WTF? 100 bucks in Australia gets you unlimited plans the ISPs that offer unlimited (e.g. TPG) or very-high-quota plans with others (Internode, one of the more expensive ISPs, gives you 1.2 TERAbytes per month for $109 AUD).

This is only "Welcome to Australia" if the Australia you're talking about is the Australia of the year 2000.

Re:Welcome to Australia

[thatkid_2002]

OK, true - things have gotten a lot cheaper in the past 5 or so years and I should have made that a bit more clear than I did. However outside of a handful of providers Internet in Australia is still fairly pricey.

Re:Welcome to Australia

[Harlequin80]

It's because I am on a digital RIM so I am stuck with being on-sold by telstra. I'm with internode - 300gb + nodephone + static IP. $129/month.

Re:Welcome to Australia

[Harlequin80]

HOW?!?!?!

That means on your downstream you are sustaining 3,640 Kb/s for the entire day. Not that this isn't possible I just want to know what you are using it for. I just can't think of a usage case.

If you are streaming HD video to multiple machines you would still not hit that level of throughput. I'm fascinated. Like that would be 15-20 high quality 1080p movie rips.

And then to send that much data! Are you walking around with a highres camera strapped to your head uploading continuously?

Re:Welcome to Australia

[Harlequin80]

Sorry I got my bits and bytes wrong. That is 3640 kilobytes. Just checking Netflix website and they say 4.7gb per hour for their HD 3D. That means a total of 112gb per day if you watched it non stop. So basically you need to have 3 tvs showing HD 3D all day to do 300gb.

Also I must be using the wrong torrents. I almost never max out my shitty 8mbit connection on torrents. Usenet I can of course.

utorrent at 1.5Mbytes / second is still only 130gb.... That leaves 170gb.... Add 2 movies a night and that is say another 24gb. Leaves 146gb....

As I said - no question it's technically feasible - I just want to know how you use that much data daily, regularly. It would be easy to do infrequently - eg. your 800gb porn collection. But if they have hundreds of movies I would have to assume you aren't watching all of them over 2 days.....

Re:Welcome to Australia

[Harlequin80]

The key to TPG and others is whether you are connected directly to their DSLAM. If you are on a RIM, which a huge number of people are, you are stuck on tesltra wholesale.

I have that situation. TPG, AGILE (Internode iiNet), Optus, & Telstra all have DSLAMs in my local exchange but I am on a rim so I'm stuck.

Re:Welcome to Australia

[slater86]

I'm an Australian and I'm paying nowhere near that much.


I currently enjoy 200Gb for $50 with Adam Internet in Adelaide South Australia.
http://www.adam.com.au/products/adamezychoice_adsl2

Re:Welcome to Australia

[Shinobi]

There's a lot more bandwidth consuming stuff than just movies. Buying games for example, as well as patching games etc. Also, some people work from home.

I bought a couple of games in december, had to do some data transfers to and from a client, sent a few thousand images to a friend for a compositing project etc. So here's the stats for just my machines in december:

2013-12 Down 240.10 GiB
2013-12 Up 119.67 GiB

Add in GF and kids, and you can add another 100GiB down and 30GiB up

Re:Welcome to Australia

[AmiMoJo]

Limited and unlimited are like flammable and inflammable. Subtle difference but basically the same thing. In this case it means "limit stated up front" and "limit hidden in Fair Usage Policy".

Here in Japan I can get 150mb/sec in both directions TO MY PHONE. For less than I was paying for a 100/10 fixed line in the UK.

Re:Welcome to Australia

[AmiMoJo]

I do push a couple of hundred gigs a day on a semi-regular basis. Perfect Dark chews through a lot, even if you are not actively downloading anything for yourself. I also do off-site backups with encrypted drive images and those can be 50-100GB. 4k video stream.

Re:Welcome to Australia

[Badooleoo]

+1 to this (no mod points today.

Re:Welcome to Australia

[evilviper]

Japan both has extreme population density, and a large number of early adopters they can count on.

You don't need government subsudies when you've got lots of fools who are easily parted from their money.

Re:Welcome to Australia

[Harlequin80]

I had never heard of Perfect Dark before now. I can see how that would chew it up. It wouldn't be viable on a metered connection (not that it is viable speed wise on any connection available to me).

I wouldn't mind the free market

[rolfwind]

if there were competitors, and not just vendors screaming free market when they adjust prices but then hold up monopoly contracts with the city/state when a community tries to come together and go their own way.

Re:I wouldn't mind the free market

[Registered Coward v2]

if there were competitors, and not just vendors screaming free market when they adjust prices but then hold up monopoly contracts with the city/state when a community tries to come together and go their own way.

Except in this case the ISP is a coop so they are the "community tries to come together and go their own way." They are owned by their members, who are the people they serve.

Re:I wouldn't mind the free market

[Gothmolly]

Who grants the ISPs the monopoly contracts in the first place? Oh wait, the elected officials.

Re:I wouldn't mind the free market

[EmperorArthur]

The problem with that is the incumbent corporations have made it illegal to have a coop or municipal option. https://en.wikipedia.org/wiki/Municipal_broadband#Controversy

They've effectively bribed the states into giving them a monopoly position. Which then allows them to squeeze their customers dry and use a portion of that money to pay more bribes. Since the US uses a winner takes all election system, and it's nearly impossible to properly research local/state representative candidates they can get away with things like this pretty easily. For clarity, I consider lobbying to be a form of legalized bribery.

Re:I wouldn't mind the free market

[theshibboleth]

So that means that if a subset of "the community" wanted to take their own percentage of the network and run it themselves they would just send an email to the larger community and then they could choose what rates, etc. to charge, right? Right?! No? Okay, so how is that not a monopoly?

Re:I wouldn't mind the free market

[inode_buddha]

I wonder how many elected officials or their family members sit on the boards at ISP's?

Re:I wouldn't mind the free market

[jonwil]

If its a co-op, why don't the people complaining about the prices get all the people who are part of the co-op (and are therefore the legal owners of the ISP) to call on the ISP to not charge so much.

Re:I wouldn't mind the free market

[girlintraining]

if there were competitors, and not just vendors screaming free market when they adjust prices but then hold up monopoly contracts with the city/state when a community tries to come together and go their own way.

Although I agree capitalism has failed here, it's not the vendor's fault, but the government's. Those "monopoly contracts" were not the invention of the vendors, but rather our derptastic marblecake system of government that creates a byzantine legal clusterfuck getting any wires routed anywhere. You have to get approval from the municipality, then permits from the county, subject to the regulations of the state, and the services provided over those subject to further regulation by the federal government. There are entire law firms and support companies whose sole reason for existance is to help negotiate the clusterfuck to secure a contract... and it's not easy, because these contracts are usually exclusive -- often at the request of the municipalities. And since that's become the de facto way of doing business, businesses who don't in turn negotiate on the basis of exclusivity may find themselves with a massive investment that just went tits up. Remember when municipalities tried to roll out wifi in neighborhoods around the country? Recall that the overwhelming majority of those initiatives detonated on the launchpad.

It's a high risk market, with a high cost of entry, and neither of those have anything at all to do with the technology. After spending tens of millions getting the contracts setup, paying out legal fees, etc., then comes the hundreds of millions in funds to infrastructure... and the majority of the cost there is -- wait for it, administrative overhead. It's not like it's hard to dig a hole in the ground and drop some wire in it. But every city has their own way of doing things, and there's easements, environmental impact studies, right of ways, compensation to land owners, and the list goes on. And on. And on some more.

If that sounds like free market to you, well it isn't. It's pretty far removed from the concept. So when you bitch about the cable and telecos having a monopoly... don't forget to give a little love to your derptastic local governments' refusal to play nice and provide a streamlined administrative process and demands for non-exclusivity.

Re:I wouldn't mind the free market

[Registered Coward v2]

If its a co-op, why don't the people complaining about the prices get all the people who are part of the co-op (and are therefore the legal owners of the ISP) to call on the ISP to not charge so much.

They can, but if the coop can't recover its costs then it will have to stop providing service and the owners will likely lose internet access. Given that most would be in the 5GB range anyway it's likely they really aren't too worried about the costs.

Re:I wouldn't mind the free market

[Koreantoast]

Except the ISP we're talking about here already is a co-op.

Re:I wouldn't mind the free market

[tmosley]

So a state-run monopoly is somehow different than a fascist (state+corporate) monopoly? If so, I invite you to try to tell the difference between Spain and Cuba, circa 1970.

No, competition is the only way markets work. Without it, money finds its way into the hands of the most connected, whether it is in the name of shareholder return or "the people".

Re:I wouldn't mind the free market

[Lumpy]

Oh no ask for them to remove the monopoly and they scream to high hell.

ISP's are all scumbags, greedy nasty scumbags.

Re:I wouldn't mind the free market

[Registered Coward v2]

So a state-run monopoly is somehow different than a fascist (state+corporate) monopoly? If so, I invite you to try to tell the difference between Spain and Cuba, circa 1970. No, competition is the only way markets work. Without it, money finds its way into the hands of the most connected, whether it is in the name of shareholder return or "the people".

And your point relative to a coop is? They provide a service by pooling resources where providers won't provide service because the cost outweighs the profits; so the alternative is no service.

meters don't work right

[Joe_Dragon]

http://www.dslreports.com/shownews/Canadians-May-Sue-NorthwestTel-Over-Broken-Usage-Meter-127342

Re:meters don't work right

[richlv]

metered internet is like metered toilet paper in a hotel

Re:meters don't work right

[Mitreya]

Adblock will become a necessity. I am pretty sure 90-99.999% data content in a web page is advertisement. Some pages play multiple video ads at once.

Re:meters don't work right

[SuperKendall]

metered internet is like metered toilet paper in a hotel

Just try to use "unlimited TP" in any hotel in the world and see how far that gets you.

Re:meters don't work right

[almitydave]

Video ads are the bane of the internet (as far as I'm concerned), but multiple video ads at once? That just seems counterproductive. I wonder if you have an example.

I don't see most ads because I use a CENSORED CENSORED.

Re:meters don't work right

[dl_sledding]

OK, let's put that concept to work here:

Metered internet is like metered power.

Metered internet is like metered natural gas.

Metered internet is like metered gasoline.

Metered internet is like metered water.

Why is internet access treated differently than any other consumable item? It's NOT free!

Re:meters don't work right

[richlv]

it's different. when you get water or gas, there's less on the other side. you don't "drain" the internet. it is not a consumable item.

or dis i get trolled here ? :)

Re:meters don't work right

[richlv]

that's what i constantly do - i use as much as i need or like (same as i would with internet). never had any problems. have you had different experience ?

wtf

[luther349]

please have people leave that provider in mass.

Re:wtf

[Trepidity]

Here's a map showing the vicinity of the city in which they're located (Winthrop, Iowa). I'll let you guess how many options there are for broadband internet there...

Re:wtf

[tomhath]

Roughly 350 households in that town. How much infrastructure would the telco cooperative have? They're probably trying to price themselves out of the market because it's a PITA to support.

Re:wtf

[misexistentialist]

Bandwidth used to cost $1 per sub and now it's $9. Yes, they raised rates by $15/month since then, but gluttons deserve to be punished!

Re:wtf

[westlake]

please have people leave that provider in mass.

It is a co-op, subscriber owned, that pays dividends. The high end DSL service is almost certainly dominated by commercial and institutional customers. The per capita income here is a bare $20K.

lol

[luther349]

yep see how the usa works in reverse your getting unlimited net wile we are regressing to limited.

Cutting the cord

[EmagGeek]

My wife and I are pretty close to just turning off Internet at home. We can only get AT&T, and we can only get legacy DSL at 1.5mbit. Usually when I'm sitting on the PC at home I'm thinking that I'd rather be doing something else anyway, like right now, in fact.

Re:Cutting the cord

[Drethon]

Sounds a lot faster than my connection at work. Makes browsing online C++ references (and slashdot nitpicking) a royal pain.

Re:Cutting the cord

[EmagGeek]

We tried the LTE thing, but our usage needs, even trying to conserve, pushed 6 GB/week or so and would have had us in a $120/month or so plan.

I've had my firewall counting packets and we seem to use about 40GB/month doing whatever we want, so at minimum I would want a 50GB/month plan, and that's a car payment. Forget that. I'd rather give up computing as a hobby than be stuck with that kind of access cost.

no

[luther349]

my isp oversold are area meaning we had mass slowdowns for months before they fixed it. all in the name of profits.

Re:no

[Anonymous Coward]

The free market already fixed this problem, if you don't like your provider, you're free to chose another. That's what makes capitalism and America great.

-- Ethanol-fueled

Re:no

[icebike]

The free market already fixed this problem, if you don't like your provider, you're free to chose another. That's what makes capitalism and America great.

-- Ethanol-fueled

I don't know the details in this ares, but I doubt they would e setting up this kind of metered service tiers if they had and competition. Its a telephone coop, which suggests small town rural.

Too often, the situation is that there is no viable competition, as the market is too small or too remote to attract competition, or it has been legislated away by cities granting right of way to exclusive contracts.

Re:no

[cob666]

Too often, the situation is that there is no viable competition, as the market is too small or too remote to attract competition, or it has been legislated away by cities granting right of way to exclusive contracts.

Sometimes is has NOTHING to do with how small or remote your town/city is. I live in a well populated suburban town in New England and our choices for internet are either Cox cable or AT&T DSL. Cable speeds are between 10-15 Mb but the fastest DSL we can have is less than 5 Mb. Verizon advertises FIOS for our area but if you try to subscribe you'll be told they don't offer it in our town. Many New England towns are vendor locked and the consumers are left with little or no choices.

Re:no

[aurizon]

A rural co-op is owned by the subscribers - is it not? There is no corporate profit. Just the equipment and cost of wages and wiring and tech stuff.
1057 customers, and a build cost of about $3 million = $3000 per customer. This stuff gets obsolete in 5 years or less = buy more, scrap the old = $600 per customer per year = $50 per month each. Thed add electricity, maintenance, tech support, new installs.

They then get the FCC grants which have shrunk a bit (Since 2009, he says, the FCC has decreased access charges by $285,004 and Universal Funding by $282,228, for a total of $566,232 or $531.68 per customer. The decrease is expected to continue. During the same timeframe internet demand has grown by 1,000 percent.)
(He goes on to explain that EBTC has 1,057 customers as of Dec. 31, 2013, and serves a 165- mile area. That means customer density is roughly seven customers per square mile.)

This looks like the typical problem that Canada, Australia and a lot of rural America face = low density of subscribers.

Do they share all cost equally?, or do they try to charge proportionally?

They have the classic small town bind.

If you get a densely built area of apartment houses that can be fully fibered, costs per megabyte can be very low, but not here. If they want the high speed, they must make some overpay (those who use only 5 meg per month), or get some proportional pricing.

With a large corporation, they could over charge the dense cities and subsidize the country sides.

Re:no

[buddyglass]

That's what makes capitalism and America great.

....

Ethanol-fueled

Ah, I see what you did there.

Re:no

[SuperTechnoNerd]

Until the entire industry colludes and washes each others hands to up the bar for all of them.

Re:no

[petermgreen]

Many countries have lots of ISPs but i'm not aware of anywhere with more than a handful of "last mile connectivity" providers. At least in the UK the bulk of the costs for a small ISP is paying BT (or one of the handful of competitors operating in any given locality) for the connctions between end user and ISP NOT paying for the upstream connections to the internet.

Re:no

[petermgreen]

This stuff gets obsolete in 5 years or less

Which is where things get interesting.

When you are building a completely new network or first introducing broadband onto a phone network unlimited traffic makes a lot of sense. Most of your costs at that point are per subscriber not per unit of data and when building a completely new backbone it makes sense to make sure it has plenty of spare capacity.

Then years down the line your network starts creaking at the seams. What you thought was plenty of capacity when you built the network no longer is. You start thinking about a major upgrade to your obsolete (but still fuctional) gear but then you look at why you need that upgrade and discover that it's a relatively small proportion of users who are using most of the traffic. Do you make everyone pay for the upgrade or do you try and place it on the heavy users only?

Having said that this case seems to have swung the balance between "charging for connections" and "charging for data" too far in the opposite direction. Having data prices high enough that people have to balance the cost of installing security updates against the risk of not installing them is almost certainly not a good thing.

Re:no

[BigDaveyL]

In other words, ISP's have not invested profits (or small price increases) back into their networks to keep ahead of the tidal wave. Wouldn't it make sense to do incremental updates over the span of several years?

Re:no

[aurizon]

Yes, all things we buy are metered.
From their listed costs per cabinet, it appears they bought current gear, and current gear is upgradeable via slide in replacement trays.A cursory search shows plenty of competitions. A small co-op would need advice, or they might get suckered.

http://en.wikipedia.org/wiki/Digital_subscriber_line_access_multiplexer

https://www.google.ca/?gws_rd=cr&ei=gYbcUvnGHIbhyQGO7oAg#q=DSL++cabinet+provisioning+

http://www.zhone.com/products/MALC/

ftp://ftp.zyxel.nl/SAM1316-22/datasheet/SAM1316-22_4.pdf

http://www.ecitele.com/OurOffering/Products/Pages/DSL-Voice-Access.aspx

Re:no

[Patent Lover]

Yes, all things we buy are metered. From their listed costs per cabinet, it appears they bought current gear, and current gear is upgradeable via slide in replacement trays.A cursory search shows plenty of competitions. A small co-op would need advice, or they might get suckered.

http://en.wikipedia.org/wiki/Digital_subscriber_line_access_multiplexer

https://www.google.ca/?gws_rd=cr&ei=gYbcUvnGHIbhyQGO7oAg#q=DSL++cabinet+provisioning+

http://www.zhone.com/products/MALC/

ftp://ftp.zyxel.nl/SAM1316-22/datasheet/SAM1316-22_4.pdf

http://www.ecitele.com/OurOffering/Products/Pages/DSL-Voice-Access.aspx

Yes, real tangible things. Not data.

Re:no

[fredprado]

You could have a point if this market was even remotely free. In this case it is a cooperative. Due to it being a small rural area, it is unlikely that they would have any competition, but they should at least try to provide reasonable costs for all, as it is their raison d'être.

The problem is that they need to contract servers from a big company to connect their subnet to the internet, and this company is likely AT&T or Verizon, and is likely their only option because the government only allows a handful of them to operate at this level. That is heavy regulation, which is the exact opposite of free market.

Re:no

[aurizon]

This is a country co-op, they are trying to come to the modern age. The FCC free money declines with time. Their population base does not allow high volume fiber to each household, dropped off at every house 50 feet apart or in a 1000 unit apartment house. At high density the provisioning costs decline markedly per household and the cost for the movie feeds(cable) dominate.
If the FCC does not subsidize it would cost even more.
(Since 2009, he says, the FCC has decreased access charges by $285,004 and Universal Funding by $282,228, for a total of $566,232 or $531.68 per customer. The decrease is expected to continue. During the same timeframe internet demand has grown by 1,000 percent.). They get $44.30 from these FCC subs for each client per month. I suppose they could pro-rate the FCC subsidy so the high volume users were getting more of it. but then the lower ones would pay more.
This is a town and voters will win this one, so the kids who want to use 100 gigs/month will get reined in by the grannies who use only 5.

Netflix is happy to let the customer pay for data - but that will cost it business. So netflix might not be viable in these areas. If netflix could send one way small blu-ray DVD's that would not need to be returned, and would only cost a standard first class letter stamp, with a client online key system so they could not be shared (but what you can watch, you can burn, so why bother).

Netflix might have to be content to lose these small volume markets?

Re:no

[Firethorn]

Its a telephone coop, which suggests small town rural.

I'm kind of surprised about the cooperative part. I'm very much NOT happy about the cellular plan pricing levels, but something like $1/5GB wouldn't break my heart.

We do similar things now by charging more for a 'faster' connection right now, with the idea that if you get a 1mb connection you'll be using less data than if you get a 5mb. There are some issues with this - for home connections slower connections are often done simply by limiting the modems, providing 20mb service from the home to the ISP generally costs no more in hardware than 1mb. The problem with this is that it 'encourages' offline use like bittorrent for downloading. 'burst' capability is very much desirable for those that only use their connection while they're home/online, so under this plan rather than artificially limiting the modems, you simply charge for usage. So you can get a 20-100mb connection for cheap, as long as you don't use it much. Basically the electricity model.

I'll also note that the members of the cooperative are up in arms over it. Given that it IS a cooperative, the board might find themselves being changed out.

Re:no

[Bob the Super Hamste]

Verizon advertises FIOS for our area but if you try to subscribe you'll be told they don't offer it in our town.

Sounds like it might be fun to see if you can get some money from them for false advertising or see if you can have them forced (by a judge) to provide what was advertised.

Re:no

[msauve]

Wow, you really have no clue how the Internet works. There are more tier 1s than just ATT and Verizon, and the government has nothing to do with limiting their numbers.

Re:no

[westlake]

Having said that this case seems to have swung the balance between "charging for connections" and "charging for data" too far in the opposite direction.

This is a rural co-op telco with 1,000 low income owner/subscribers --- the geek has no leverage here.

Re:no

[hab136]

>The idea of unmetered pricing is kind of insane.

Why? If an ISP's peak bandwidth is 600 MB/s, then they have to buy 600 MB/s of bandwidth. It doesn't matter how much you download during non-peak times; the pipe has to be sized for peak bandwidth.

Someone that uses 5 GB monthly, but expects 30 MB/s bandwidth during peak time, means the ISP needs 30 MB/s more peak bandwidth (so 630 MB/s total)
Someone that uses 300 GB monthly mostly during non-peak time, and only uses about 5 MB/s during peak time means the ISP only needs 5 MB/s more of bandwidth (so 605 MB/s total).

Metering by the bit is only vaguely related to costs. If you want to meter by bandwidth, that would make sense - but we already do that. You can have 10 MB/s for $x.xx, 20 MB/s for $y.yy, etc. Why should we *also* meter by the bit when we already meter by speed?

NZ's problem is likely that the trans-Pacific cables meter by the bit in order to increase their profit, and the local ISPs are just passing those costs on. In that case, the trans-Pacific cable operators shouldn't be metering by the bit, since it has no relation to their costs.

Re:no

[wordsnyc]

Rural Ohio, 35 miles east of Columbus. Our only choice is Frontier DSL, less than 3.5 Mb most of the time, often drops completely if it rains or there is "squirrel activity" on the lines. Netflix works, sorta, on a very small screen. We have DirecTV but soon won't be able to afford it. I read a lot of books.

Re:no

[N1AK]

Someone that uses 5 GB monthly, but expects 30 MB/s bandwidth during peak time

Would be using the internet for 22 peak minutes a month and not at all outside of peak hours, ie: they don't exist. Anyone expecting 30 MB/S isn't using less than 5 gigs a month. In most cases where limited caps come in the connection speed is pretty much fixed at whatever your home line can offer. The ISP wants to keep the cost down for someone who only uses the internet casually and is doing so by charging more to heavier users. If you need to get $50 per customer to cover costs then very light users will simply cancel the subscription, increasing the cost for everyone left and leaving less of the poor and elderly with internet access.

Re:no

[RivenAleem]

Can you first prove that a customer logging 100GB of data a month is causing network degradation? The argument that those who use it more should pay more for upkeep I think would work for things that experience wear and tear from sue, but I find that hard to believe for things like network equipment.

Either they are equipped to provide the service they offer, or they are not equipped. This business of oversubscribing, or under developing their network to maximise profits is understandable (if abhorrent) for a For-Profit company, but for a coop, the whole point is that everyone gets together to share the cost of something they couldn't afford alone.

Maybe I'm not understanding this the right way.

Re:no

[pubwvj]

"The free market already fixed this problem, if you don't like your provider, you're free to chose another. That's what makes capitalism and America great."

Wrong. There is no other provider. In many places the only provider is the landline Telco and they have a monopoly. There is no cellphone, cable, WiFi or other provider here.

It is highly regulated. In theory I could just setup my own link to a connection about 20 miles away to get around the Telco, I looked into it, but the government regulations are onerous.

Re:no

[Anonymous Coward]

Internet should be like roads. Provided to all. No limit on how often you are on it.

Re:no

[Rossman]

The ISP wants to keep the cost down for someone who only uses the internet casually

Wrong! The ISP wants to maximize its profits, period.

Re:no

[el momia]

god bless america and the free market

Re:no

[Ardyvee]

My problem with metered plans is that most of the time they don't separate data caps from speed. I can live with 10mbps, but please I'd like a higher data-cap than the 25GB you give me. It's not enough. Otherwise, I think I could live with metered.

Re:no

[ganjadude]

unfortunately the fine print states "may not be available in all areas advertized" at least in NY it does. literally 3 houses down from me can get it, me? nope

Re:no

[fredprado]

Sure it does. It limits through regulations. Thanks to that seldom there is more than one or two of them physically serving the same area.

Re:no

[tmosley]

>Highly regulated

Well there's your problem.

"Free" markets don't have pointless regulations. True, a totally free market wouldn't have ANY regulations (imposed by the government), but we don't have to go that far to get things to where they at least work.

Re:no

[TooMuchToDo]

What happens when consumer demand for bandwidth rises faster than prices, and your revenue and profits don't cover equipment upgrades because of the demand curve? In that case, you charge more.

If you're Comcast, AT&T, or some other large incumbent, yes, you're milking your customers. Small town ISPs? Not so much. Feel free to grab an uplink and some gear, and try to deploy your own low density ISP and see what your costs are.

Re:no

[BigDaveyL]

I did say "price increases" were an option. Profits may not cover all the upgrades, but if you were to raise prices $5/year or something, that's better than large one-off increases.

Re:no

[jjhall]

Part of the problem in my opinion is the way they're metering it. Take my cell phone for example. I get to "choose" ahead of time how much data I think I'll need for the following month. Right now my family is able to stay under 2GB every month. I could go the next step up and choose the 4GB plan for another $10 per month, or 6 GB for an additional $20 per month. The problem is I don't know what my data usage is going to be. What if I take an unexpected trip for work and the WiFi is unreliable. What if we go on a trip and send a lot of pictures back and forth to family members. I'm faced with a couple choices. I can leave the data plan where it is, and hope we don't end up going over. If we do, I'm charged at $15 per GB for overage. Oh, it's the last day of the billing cycle, and you used 300K too much? Too bad, pay $15, and no your extra data you just paid for doesn't roll over to the next month. I could bump up my data plan to the next notch if I know I'm going out of town, but then if don't actually end up going over the usual plan, I paid extra for the privilege of *maybe* going over. Again, no refund or carry-over.

I don't have to worry about that for my electricity. It is 100% metered, and I like it that way. There are no pre-planned packages, I use what I need and I pay for what I use every month. The billing unit is small enough that I don't fret over it. If cellular and/or hardline data providers would do something similar I think they'd see a lot less resistance to implementing metered billing. I use about 300 GB in a 30 day period on my home Cable connection. I'm not a light user, but I'm not what I'd consider a high-usage user either. Most of my data usage comes from the family using Netflix for the primary video choice. If I run the math, I'm paying on average of 20 cents per GB. If my service were metered at a similar price, I wouldn't lose any sleep worrying if I used an extra few hundred megs.

Honestly I wish my cellular provider did bill in this manner but billed on a KB or MB unit. I hate worrying at the end of the month if I am going to wind up paying an extra $15 and only being able to use a small fraction of what I just paid for.

Re:no

[NIK282000]

Bell in canada is the worst for this. Most of their DLS customers in my area are still being served by untwisted pairs of telephone line that has been on the poles since the 1950's. Their network flopped so bad last week that ~10,000 people lost their home phone, internet and cell service for 24hrs. ISPs will always do the bare minimum to keep their service up while charging as much as they can because there is no accountability for crap service.

Re:no

[nitehawk214]

The free market already fixed this problem, if you don't like your provider, you're free to chose another. That's what makes capitalism and America great.

-- Ethanol-fueled

Lt Cmdr Data's reply.

Re:no

[GTRacer]

Three houses down?!

LAN Party!!!

Re:no

[aurizon]

No need to cause degradation. How would you suggest the cost be apportioned?
1057 people build a thing and share the cost in direct proportion to their use, what is more fair than that?
High BW users use more = pay more, and vice versa.

Let us say you and I build a system, I use 90% of the BW, you use 10%, and to be fair I say we pay equally, since you can also use the same as me (but you do not)
How do you feel?

Re:no

[david-the-go]

I don't believe the bit about NZ is true. The Trans-Pacific cables (as far as I'm aware) charge by the megabit, but this price has dropped dramatically - to the point where flat-rate is actually becoming "reasonable" in New Zealand - due in part of-course to Kim Dotcom. Also, the claims about peak performance are exaggerated, and in practice you can still over-subscribe at peak times as not everyone is utilising it at *exactly* the same time.

Re:no

[RivenAleem]

You word your reply like I'm limited to 10% of the BW. I have an equal share in the bandwith. You don't set up an All-you-can-eat diner and then expect the people who eat more to have to pay more than those who choose to eat less.

What happens when the heavy users call the ISP's bluff, and stop using 100GB a month, and everybody only signs up to 5GB. What happens then when they havea shortfall in revenue and cannot operate?

Re:no

[N1AK]

Yeah, because co-ops owned by the customers are so profit focused. If you can't be arsed reading the article no problem, just don't be shocked that it makes you look like an uninformed moron from time to time.

Re:no

[mgcarley]

The initial build cost of $3 or $6 or $12 million or whatever may be possible, yes, because of the digging and everything else but "the electronics", contrary to what the head honcho states, are actually pretty cheap - an Alcatel VDSL chassis with all the bits certainly won't set you back $150k as stated - my own pricing suggests a mere fraction of that. They're looking at something more like $200/port if the chassis is only half-full, and adding in battery backups and maintenance and everything else still certainly will not be $600/customer/year.

Besides, I doubt that this company is replacing equipment every 5 years: their subscribers are still on 3mbit/s lines. I wouldn't be surprised if they're picking up second-hand equipment, but I am surprised that they don't even seem to have a fiber strategy because that could lower their OPEX rather significantly.

Re:no

[aurizon]

They may have gotten screwed on their initial install. I do not know when it was first installed, but cabinets to serve 12 clients might cost less, unless they had to build a small brick data house and add electric wires and make it blend in with their La-De-Da neighbors - I lack data, the OP might be able to provide, if asked?

Re:no

[mgcarley]

Even those aren't //too// expensive in the grand scheme of things - it'll be the digging that will have cost them money.

The point was that the electronics should cost nowhere near $150k per cabinet based on the pricing I've seen from major vendors. They could (should), in fact, double the number of cabinets to reduce the overall copper lengths (thus improving quality of service).

I'm not exactly certain on what else needs to go in a *DSL cabinet other than the ONT and batteries, but with equipment as cheap as it is, the costs for replacing equipment in 16 cabinets (and adding another 16) likely would not cause a loss at the end of the financial year.

I'll use Alcatel as an example because that was the first spreadsheet I opened:
$1k for an Alcatel O-00240v-q ONT (each)
$4k averaged across 32 cabinets for batteries, construction and such is probably not out of the question
=total $5k * 32 = $160k
~$30k for an Alcatel 7302 16 slot shelf with 4x 8 port line cards, 32 SFPs and all the rest
$minimal to change POTS to VOIP
~$100 each for battery backups at each customer location (total $105k)
Some other misc fees the power company will charge to come out and survey the poles and allow things to be changed around (assuming they use the power company poles)

RoI break-even is still only about 2 years with a total cost of maybe $300k all up. Considering they already have the fiber in the ground and copper presumably in the air, most other changes come under labour which one would assume they have a salaried staff member for and thus are already paying.

Then, find a cheaper middle-mile supplier - we all know that AT&T is expensive compared to pretty much everyone except Verizon, but if cost really is an issue, don't use them. Either way, contending bandwidth at 1:30 on a $5500/mo line (assuming 100mbit/s on the highest cost basis I've been quoted in the last 2-3 months for service in rural areas) still works out at a cost per GB equivalent of less than $0.20, and allows 10GB per mbit served (or, an average of 30GB per customer - and considering that they're saying their average customer uses 15GB, they should be golden). And even if that cost is double because they have "plenty" of spare bandwidth for their IPTV services and everything else, their costs aren't anywhere near high enough to justify $5/GB - that's just daylight robbery.

Re:no

[aurizon]

I think nothing is in the air = all underground, and new underground work quite costly. This a rural area, so with large lots and the need for all light, heat, water, power and phone underground from a long time ago, adding cable, data, fiber, etc can be quite costly.

As to their first costs being excessive, I suggest you ask the OP if he has some sort of breakdown on this. There may be some small town corruption going on??

Telephone COOPERATIVE

[Anonymous Coward]

One thing that's getting missed here is what cooperative means. My parents are part of another tele coop in another part of Iowa. Tele coops are relatively common in very rural areas and are owned by the subscribers and, at least in the case of my parent's coop and this coop, the subscribers receive dividends. (see http://www.eastbuchanan.com/about/dividends.htm )

If the subscribers don't like it, they should show up to the coop meetings and have their say in the company that they themselves own.

Re:Telephone COOPERATIVE

[fermion]

Precisely. A cooperative has to cover their costs from a limited number of users. They are often in rural ares, where subscribers have to put in their own utility pole. We all pay a fee to subsidize, but the costs are mostly covered locally. In such a case it may not make sense to charge $40 for an all you can eat plan, where some are data they may not use, and if too many people use too much data then costs are not covered. I mean for many people 5 GB a month is plenty.

Re:I don't mind metered internet usage...

[rolfwind]

As a customer, I do mind metered internet because it's bullshit.

This isn't electricity (minimal and always on anyway so the difference is negligible, at least for these middle men) or anything, this is about forcing limited supply when there isn't any.

Would you like metered television too? No longer broadcast to you 24/7, now you get to watch 90 minutes a day, and after that you have to pay? Would that make sense to you?

Bandwidth is already rationed by setting speed levels. I already pay quite a bit more a month for the highest speed level residential and businesses even more so.

People rationing bandwidth at night by not using any isn't going to save anyone anything. It's just dark fiber.

More so, I would argue that mindsets like yours is setting us back. The need for speed is what brings us advances, getting us forward, allowing surgeries and other amazing stuff over the net. Metering is just a setback there.

All metered internet will do is make the Cable ISP slobber as they grab netflix and hulu by the balls and cut off their customers through draconian price increases. By some reports, they already lost some 25 million customers. You don't think they want to stem and reverse the flow? They are hurting, and they are hurting because they didn't change with the times (NO, I don't want the sports channels and every other overpriced bundle just to see the 3 channels I watch, fuck off.)

Net Neutrality?

[tomhath]

Can someone please explain that connection? Really seems like a long stretch to get the topic back on the table. Maybe tiered pricing is caused by global warming and GMO crops?

Re:Net Neutrality?

[Mitreya]

Can someone please explain that connection? Really seems like a long stretch to get the topic back on the table. Maybe tiered pricing is caused by global warming and GMO crops?

If that provider stays and faces no competition it will not take long until they start establishing "partnerships" to make this connection usable again.

For example, Netflix or Amazon for streaming video that does not count towards the cap. It's not so far away -- if the connection is completely unusable, it will eventually be modified by "oh, this partner does not count towards the cap" or "this partner only counts @30% towards your cap"

Re:Net Neutrality?

[petermgreen]

Equally by making traffic prices for services off their network artificially high they can force people to buy the services that are on the network (either because they own those services or because those services are paying them for the privilage of being unmetered or whatever).

Will others switch to this?

[koan]

Most likely they will watch and see how this turns out, or even more likely they are all in it together and this is the test.

i see 3

[luther349]

i see 3 dsl providers and a cable one they got options thank god.

Re:i see 3

[gameboyhippo]

I used to live in a rural town. We had just one provider. Many of those maps that show multiple providers are inaccurate. They likely only have the coop. If there was competition, then there would be no reason for a coop.

Oh Hell No!

[asimons04]

First of all: http://www.youtube.com/watch?v=9o19CaOSuD8

I hope there is no way people will put up with this. Anyone using EBTC should drop them, and drop them now. If they get away with it there, how long before it becomes a precedent that other ISPs use to do the same?

AT&T/Verizon/Comcast/Cox/Suddenlink, et all CEO: (obligatorily rubbing nipples while saying this) "Hey, people in Iowa don't seem to mind. Let's roll it out nationwide."

Re:I don't mind metered internet usage...

[arbiter1]

metered is fine for some people but the amount they are giving vs the cost is just stupidly expensive. They will be lucky to be in business in 6 months less they change that tier-ing.

Re:The only reason they're able to get away with t

[arbiter1]

Just what i was thinking to, They are ONLY game in town so everyone is forced to play.

Clicking the link

[TheRecklessWanderer]

Clicking the link to the provider shows that they provide Cable TV Service as well. This makes it not difficult to figure out what they are trying to do. I wonder how long until one of the other providers comes in and helps them close their doors forever.

Re:Clicking the link

[arbiter1]

With this pricing they won't need any help closing doors.

Re:Clicking the link

[Registered Coward v2]

Clicking the link to the provider shows that they provide Cable TV Service as well. This makes it not difficult to figure out what they are trying to do. I wonder how long until one of the other providers comes in and helps them close their doors forever.

They are a cooperative; which means they are owned by their subscribers. Coops arose as a way to provide service to rural areas were the large investor owned utilities would not provide service since the costs would outweigh the revenue. The government subsidized the costs to run the lines in order to ensure essentially universal serve. They cover costs and pay out execs funds over reserves in the form of dividends. As a cooperative, all the members get to vote on policies.

Over time, some coops have grown quite large and no longer are in rural areas by any stretch of the definition; and have expanded into a lot of ancillary business as well. In some cases the cable companies have fought them and kept them from becoming ISPs since they would be a formidable competitor. In this coops case they appear to still be in a rural area where the chance of a competitor coming in and laying fiber is slim since they could not beat the coop's price; my guess is a satellite ISP may be the only alternative.

Re:Clicking the link

[petermgreen]

Cellphone like internet prices suck but they suck less than not having internet access at all or actually using cellular/satellite services. So sadly in the absense of fixed line competition they may well get away with this.

TV lineup seems like it stuck in the past how old

[Joe_Dragon]

TV lineup seems like it stuck in the past how old is there network?

http://www.eastbuchanan.com/internet/p_registration.htm

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agreed

[luther349]

this craps only starting due to the likes of netflicks and hulu threatening there overpriced packages people are cutting the tv cord and they don like it.

There doesn't seem to be a "market"

[Kjella]

From TFA (heresy, I know):

He goes on to explain that EBTC has 1,057 customers as of Dec. 31, 2013, and serves a 165- mile area. That means customer density is roughly seven customers per square mile. (...) Since 2009, he says, the FCC has decreased access charges by $285,004 and Universal Funding by $282,228, for a total of $566,232 or $531.68 per customer.

These are people in rural areas, where it's not very profitable to deliver service in the first place. Public funding is going down, actual bandwidth going up, a little fiber laid down in the dotcom days is growing old and they're in a short squeeze. These prices smell more of desperation than gouging, it can't be easy to break even with those numbers. I doubt any competitors will move in to take over this gold nugget.

Re:There doesn't seem to be a "market"

[SuperKendall]

I'm curious, how does it feel to be the only person on Slashdot who READ THE DAMN ARTICLE?

Re:There doesn't seem to be a "market"

[MtHuurne]

Also from TFA:

Meanwhile, electronics in each cabinet costs approximately $50,000 but only serves approximately 12 customers/ cabinet, and EBTC says they have updated original components twice bringing total investment to $150,000 for each cabinet, bringing the grand total (for16 cabinets) to $2,400.000.

So they probably bought equipment that could serve a few hundred customers but since there don't live that many people within range, only a dozen are connected. Did they make the wrong purchase decisions or does the equipment that fits their needs simply not exist?

Re:There doesn't seem to be a "market"

[jedidiah]

You are confusing "reading an article" with "blinding accepting the claims of that article".

Re:There doesn't seem to be a "market"

[Lawrence_Bird]

I call bullshit. It is highly unlikely that a) their customers are uniformly distributed in that service area and that b) they actually provide service to the entire area.

The problem is that there *is no competition*. I spend part of the year in a very rural area in the north east with a 100 year old local phone monopoly. I pay $75/mo for 8/1 DSL (I'm forced to pay for a phone line included in that which I do not use). This company has actively fought to keep out larger companies by lobbying any locat, state and federal officials they can. Insult to injury, I can't call into this area from my primary home any more as my VOIP provider will not pay the 6c termination fee this local telco demands.

Rural service is undoubtedly a challenge but lets not cry too many tears for the local telecoms. They are as much a part of the problem as they are a solution.

Re:There doesn't seem to be a "market"

[aaarrrgggh]

Yeah-- something seems off in their network design. You basically would just need a 24-port mini-dslam for internet, and an amplifier for cable. That should be under $5k for internals and another $3-5k for the pedestal.

Looks like they set themselves up with an expensive infrastructure; usage shouldn't be driving up costs though.

Re:There doesn't seem to be a "market"

[Anonymous Coward]

Their customers are probably geographically diverse (big rural area, low population density) so they need multiple cabinets to cover that wide of an area. Each cabinet serves few customers. Hence the high cost per subscriber.

Re:There doesn't seem to be a "market"

[SuperKendall]

Observe: Non-one who POSTS reads the articles... it is not inconstant to say there will be heavy traffic and super-ignorant posting.

Re:There doesn't seem to be a "market"

[TubeSteak]

Public funding is going down, actual bandwidth going up, a little fiber laid down in the dotcom days is growing old and they're in a short squeeze.

I'd be interested in learning more about how fiber "is growing old".
I believe that dotcom era fiber should be good for >50 years and modern fibers should be good for even longer.
My understanding is that the 15~25 year numbers you'll see are book figures for the accountants to calculate asset deprecation.

Which has nothing to do with the fact that this is a rural network pushing 1~3 Mb/s using DSL over copper.

Re:There doesn't seem to be a "market"

[N1AK]

He had nothing to say and a need to be snarky ;)

Re:There doesn't seem to be a "market"

[Reziac]

I dunno how relevant it is, but the guy I used to get fixed wireless from told me the broadcast part of the radio was $900, and the receiver on my house cost $130. (both Motorola)

lol

[luther349]

time warner tried this shit and people left in mass in the test zone the idea was dropped.

Metering it is the wrong approach

[DarkOx]

What they should do is throttle it at peak times, lock everyone down to 2mbt during peak hours, charge extra for everyone who does not want to be snapped

Re:Metering it is the wrong approach

[Solandri]

1) Throttling doesn't work because residential internet service is over-provisioned by about 20x. i.e. if you're paying for 10 Mbps service, the ISP actually only has 0.5 Mbps of bandwidth per customer. If you're ok with being throttled to 512 kbps, then I guess it could work. But the vast majority of customers would riot. Yeah they could not over-provision, but then they'd have to charge you about $1000 for 10 Mbps. And the vast majority of customers would again riot.

2) It's over-provisioned because averaged over time, each customer actually uses only about 512 kbps. So on average, the total bandwidth used by all customers equals the actual bandwidth available. In that respect, metered service is the same thing as throttling, except it's on a monthly timeframe and gives you the customer the choice of when you want to throttle yourself.

Whoah let me get this straight,...

[AbRASiON]

I'm only glancing at the article here but that seems to be indicating those are the DSL, not mobile data prices, is that right? Those prices are completely insane and I live in Australia. I can get around 300gb per month for $80 or so on ADSL2.

Is there literally 0 competition available in this region? Those prices are ...utterly appalling, virtually making the internet unusable for anything but casual browsing in that region.

Re:Whoah let me get this straight,...

[N1AK]

There no competition in the region, as the article points out, because no company wants to provide internet in the region and a co-op (owned by the users) was set-up so they could actually have internet access, as again covered in the article.

This story has literally nothing to do with company abuse or overcharging. It is simply showing the true cost of providing internet access to people who live in very sparsely populated areas. If there are areas like this getting cheaper internet in other countries then they are certainly getting it cheaper because the government, and thus the population as a whole, is paying the money instead. It's easy to sit there and be smug about what your country is offering. I'm paying $50 US for my full phone/net package which is 76mb/s with no download cap in the UK. However all that really shows is that the UK with an average population density of ~260 people/km (130 houses) is much cheaper to cable than a part of Ohio with something like 7people/km (3-4 houses).

What a bunch of liers

[Bengie]

costs have increased by 900% since 2009

I call BS. Prices are dropping everywhere. Backbone bandwidth, -50% per year. It costs only $1,800 through $3,000 to do FTTH. At $300/month, you could be the proud owner of a 1gb/1gb dedicated fiber connection in 10 months. If I have to choose between someone being a total idiot or being greedy, I'm doing with greedy.

Re:What a bunch of liers

[w_dragon]

This is about rural Iowa. The main cost for maintenance is probably getting a person to the area where a problem is. They cherry-picked the date to be in the middle of a recession when they could pay peanuts for someone to drive 3 hours to the middle of nowhere to replace a repeater, versus now when they have to pay 9 peanuts.

Re:What a bunch of liers

[msobkow]

SaskTel serves all of Saskatchewan with DSL, both rural and urban.

Our prices have gone up due to increased costs, too, as of this month.

It's now $50/month instead of $45/month for an unlimited use 6 megabit download link.

Re:What a bunch of liers

[msobkow]

It's the first price increase in over 5 years.

Re:What a bunch of liers

[bmajik]

My closest neighbor is 3/4mile away.

Apparently to lay fiber, you trench when you can, but bore to go under roads. I was told $10-15k per mile to trench/bore. The costs to actually put in the fiber and light it up are on top of that.

I think there may be some fiber about 3 miles from me. So if I paid about $50,000, there's a chance I could get some pulled to me. Of course, finding an ISP to provision a circuit on top of that is extra.

There's one other person that might plausibly on the route from wherever fiber is to my house that would be interested in sharing costs. But there are like 350 humans in my entire 36 square mile township.

Do you really think all of us are going to get FTTH for $3000? I'll tell you want -- I'll pay you 10x that amount to pull 1gb to my house, and I'll pay you $300/mo after for a 1GB CIR.

You game?

I actually talked to one fiber provider in my area and they weren't interested.

Re:What a bunch of liers

[whoever57]

I think there may be some fiber about 3 miles from me. So if I paid about $50,000, there's a chance I could get some pulled to me. Of course, finding an ISP to provision a circuit on top of that is extra.

You think that's bad? Comcast quoted me for installing their business Internet in my company's office: $99/month, but $200k installation fee. Yes, that's right: two hundred thousand dollars. But the best part: the office is in a dense area of offices in Silicon Valley.

Re:What a bunch of liers

[Eskarel]

It's true that costs have gone down, but usage has gone up dramatically. Streaming video and stuff like Steam allows people to use traffic levels that were basically unseen outside of serious pirates in 2009. Before all the streaming video stuff anyone using the internet for legal purposes was going to be lucky to use up a couple of GB. Watching a single HD movie will burn through more than that.

Re:What a bunch of liers

[CrimsonAvenger]

SaskTel serves all of Saskatchewan with DSL, both rural and urban.

Of course, it's a lot easier to keep prices under control for rural customers if you can distribute their extra costs over your urban customers.

Unlike the case in TFA...

Re:What a bunch of liers

[msobkow]

You have no idea what share of SaskTel's customers are as rural as this provider's.

There are only a little over 1,000,000 people in the entire province.

The largest cities aren't even 300,000 people -- and there are only two that big.

To be called a "city" here, you only need 5,000 people.

In other words, most of SaskTel's customers would be considered "rural" by US providers.

Re:What a bunch of liers

[TubeSteak]

I think there may be some fiber about 3 miles from me. So if I paid about $50,000, there's a chance I could get some pulled to me. Of course, finding an ISP to provision a circuit on top of that is extra.

If you have line of sight, you can bridge the gap for ~$1,000 in fixed costs and directional antennas.

Wireless has grown up a lot in the last few years and people are doing amazing things with consumer and low end commercial grade hardware.

Re:What a bunch of liers

[bmajik]

In fact, I've been planning on exactly this. I'm looking for tower partners in a nearby town.

It's worse than you think.

[levest28]

Based on this image: http://d22r54gnmuhwmk.cloudfront.net/photos/8/fk/xq/BHfkxqsNQendYXM-556x313-noPad.jpg So, a 100GB plan is already $300, but it specifically says $5 per addition GIGABIT. Does this not mean that each additional Gigabyte is $40?!

Bullshit.

[Anonymous Coward]

I wish this were true, but we don't have common carrier restrictions on broadband/dsl/cable. In other words, The lines and service are provided by the same companies. In most areas, you have 1, MAYBE 2 choices if you are lucky, and those choices are largely completely and totally identical from price to service. Free markets only work when monopolies are prevented, and without the common carrier restriction, the United States has NO protection from this.

lol

[luther349]

im sorry my new mansion payment yacht privet jet and Lamborghini drove prices up 900%.

EBTC had a healthy profit before this change

[lokidjm]

EBTC's profit margins on internet service were above 40% in 2012. See the document below. They have also built out line of sight wireless internet service, so they will not need to maintain those rural DSL cabinets in the future. https://docs.google.com/file/d/0B1MxEnYSkSD_V2ZjdEdfeFNTMnM They could easily serve all of their existing customers using wireless if they chose too. Prairie iNet is a company that uses similar wireless technology. They can serve 250 customers per tower. EBTC currently has 3 wireless line of sight towers. Prairie iNet offers speeds of up to 20 Mbps with unlimited usage for $70 per month. They offer service in a smaller town 8 miles south of EBTC. http://www.prairieinet.net/residential/pricing-plans/

might as well go 4G

[Deathlizard]

Apparently it must not be an competitive marketplace or they just want to find a convenient way of going out of business, since the Local Cable company (if they have one) is going to make a killing there.

Hell, Verizon HomeFusion is about the same price as the 25GB plan. You can drop your phone line, It'll blow the doors off DSL speeds, and it can be added to a share everything plan so the data can be shared with a 4G hotspot/Phone. If you're going to pay that much you might as well get something that's going to travel and be faster.

Re:might as well go 4G

[Megane]

Hell, Verizon HomeFusion is about the same price as the 25GB plan.

That's nice. How many rural areas is it available in? Can you get it in Iowa? Have you ever seen a rural area? If this looks anything like rural Oklahoma (which I saw plenty of when I was in grade school, with a 30-minute school bus route), the houses (or sometimes clumps thereof) are 1000 feet from the road, and at least a half mile apart. Try looking at the area in question on Google street view.

50$

[luther349]

hell your lucky its closer to 100$ a month for tv by the time they get done raping you in fees and shit for a decent package.

Re:50$

[dskoll]

Wait, what? You pay for TV?

I have an antenna in my attic and get about 15 channels for free. That's all the TV I could ever watch.

Pay for TV???? What a concept!

Re:50$

[Midnight Thunder]

I take the attitude that you can show me commercials if I don't pay for TV, but if I am paying for TV thn I shouldn't see commercials. The problem is that if I have cable or IPTV I have to pay for the service and get commercials and every 10 minutes at that.

I prefer the antenna too, though it can be a challenge finding one with a clear signal in the city.

no problem

[albeit unknown]

I have no problem with this, as long as it's stated clearly up front. What I would have a problem with is not treating all data equally, such as throttling Netflix because it's perceived as competition.

Not exactly

[Anonymous Coward]

Yes, expanding their networks costs money, but they aren't doing that. Instead, they are saying "well, our networks are overloaded, and investments are risky/expensive, so instead we are going to jack prices up until usage shrinks to a level our networks can handle" which is only possible thanks to the fact that we don't have common carrier restrictions on line/transmission services.

This also means US largely has no competition between providers if you even have more than 1 choice, which is very rare. Which is also why they can jack prices up so high without worrying about competition, I mean 25 bucks a month for 5 gigabytes? In the real world it costs the ISP about 0.0005 dollars or less per gigabyte of transmission, including expansion costs, administrative overhead, etc. This markup is so high that it puts the 100,000% markup on some medications to shame.

Re:Not exactly

[Qzukk]

which is only possible thanks to the fact that we don't have common carrier restrictions on line/transmission services.

Actually, for all the things common carrier may or may not fix, this isn't one of them. Only competition controls pricing.

Re:Not exactly

[Ol Olsoc]

Only competition controls pricing.

Unfortunately, it becomes a no true Scotsman sort of thing. After companies get large enough, the last thing they want is competition. They quite naturally want as little competition as possible. Where does the free market exist?

Re:Not exactly

[Entrope]

Is this what makes American healthcare as affordable as it is today? Between Medicare and private insurance, the intermediaries who pay for most of the care pretty effectively control the prices that they pay.

Re:I don't mind metered internet usage...

[rolfwind]

What you are talking is a la cart pricing, and most people who want that still want the channels they want available 24/7 ("unlimited" in that time period) and not just individual shows. They just want to stop paying for all the bundled channels.

The problem with your scenario is that it will make TV more expensive overall.

Imagine a buffet where making the food, regardless of quantity, costs a set amount per dish. They could make unlimited spinach or 5 cups, it will cost the same.

Now, is that buffet better served by charging $20 at the door for all you can eat or charging you $12 per plate? Yes, if they went the plate route, you'd have a lot of people eating less (one plate probably) but they still have the same costs and thus less profit.

TV is exactly like that. A show generally costs the same to license or produce regardless of how many people watch it at any one time (ratings aside).

All it would do is generally lower ratings, lowering their sales, and they'd probably have to start cutting back on the amount of dishes/shows they make.

Time to unplug

[nurb432]

Drive them into bankruptcy. Screw them and their 1980s throwback to the bad days of CompuServe, GEnie and AOL

Free Market Capitalism? Can you hear me now USA?

[Bob_Who]

Write your Congress and Senate and if they can't effect a legislative change then FIRE THEIR ASSES!

Its time we were represented by our electorate and not the K street corporate lobby. Remember, voters must be US citizens but shareholders are from anywhere. Isn't it time we take our government back from Wall Street pimps of the bottom line? VOTE!!

As an Australian, those rates seem obscene

[Cimexus]

I'm Australian so are more than used to metered internet access. Unlike most Slashdotters, I like the concept of metered internet, in that it gives you options to only pay for what you need and not subsidise other users so much. Grandpa who just checks his email every day can get by fine on the $15 plan that has minimal allowance, while Johnny McTorrentLeecher can cough up for the large quota or unlimited plans.

But even in Australia, a country with a higher cost of living than the US and less in the way of developed internet infrastructure, the costs of metered plans are far, far lower than those quoted in TFA. 100 bucks for 25 GB is like something out of the early 2000s, when broadband itself was relatively new and DSL was mostly of the 256 kbps or 512 kbps variety. For comparison, the offerings of two Australian ISPs that are roughly indicative of a typical "cheaper ISP" and "more expensive but better quality ISP":

TPG (http://www.tpg.com.au/products_services/adsl2-standalone)

50 GB - $29.99
150 GB - $39.99
500 GB - $49.99
Unlimited - $59.99

Internode (http://www.internode.on.net/residential/adsl_broadband/easy_broadband/)

50 GB - $49.95
100 GB - $59.95
200 GB - $69.95
400 GB - $79.95
1.2 TB - $109.95

(And you can take $20/month off the above if you bundle a home phone service with the same provider too)

Comparing to this, this Iowa ISP's prices are insane. Metering sucks if THAT is what you have to pay (particularly in a country where unlimited plans are ubiquitous for less money).

Metering CAN work well, and CAN be fair (pay for what you need ... light users don't have to subsidize the heavy users). But it requires proper choice of plans (within an ISP) and proper competition BETWEEN ISPs to work. If there's a monopoly then yeah, it's very unfair. Fortunately for all the issues we have with internet in Australia, most people in urban or suburban areas (which is 90%+ of the population) do enjoy good ISP competition. If you have a phone line, then you can get DSL from a wide range of providers (at least a dozen, sometimes up to 20, depending on location).

Re:As an Australian, those rates seem obscene

[Cimexus]

Replying to myself here, but just had to add, I took a look at the map to see exactly where this ISP serves. It's a tiny little town. In fact, I've actually been there (!?), as I drove from Dubuque to Cedar Falls on a recent trip to the US and this place falls on the highway between them. Small world.

Either way, even in a similar small town in Australia, you wouldn't be paying anywhere near that much, even if Telstra was your only option (provided you had a phone line of course ... if satellite was your only option then it may be comparable).

Re:As an Australian, those rates seem obscene

[pubwvj]

I'm in Rural Vermont - a third world nation compared with the United States or Australia - and we already have metered pricing for the simple reason that the bandwidth is so low. For $125/month we get an absolute maximum of 6GB of data. That's 5x times more expensive than the Iowa pricing. Sounds like Australia is worlds ahead in internet infrastructure. I would love to have that but wouldn't want the urban problems. :) (Vermont is extremely rural - very low population density and no cities.)

Re:As an Australian, those rates seem obscene

[jez9999]

In the UK we can have unmetered internet access at perhaps 60mbps/20mbps speeds: http://zen.co.uk/business/broadband/fibre-optic-broadband/fibre-and-phone-packages.aspx#unlimitedfibre2

Our telephony is heavily regulated. Good job you guys deregulated. :-)

Re:As an Australian, those rates seem obscene

[N1AK]

In the UK we can have unmetered internet access at perhaps 60mbps/20mbps speeds

We have that in most urban locations it certainly isn't country wide or even close. Additionally we have spent billions of government money on paying companies to lay cables in rural locations. We also have 8x the population density of the United States meaning the costs of cabling and infrastructure are massively lower. Finally, we have a heavily de-regulated market which is why BT was split into two halves and we have LLU etc.

I'm impressed you can act so proud about something you clearly know so little about.

Re:As an Australian, those rates seem obscene

[Kookus]

Except that the minimum rates are the prices they wanted from you anyways. It's like Verizon's unlimited legacy plan vs their 2gb data plan. Metered pricing is good for you right? Well their 2gb data plan cost as much as their unlimited plan (that you can't get anymore).

If they took their previous rates and actually prorated based on usage, then your Grandpa figure could get by on a $1.50 plan instead of $15 one. But the isp can't get by when 50% of everyone pays less than their minimum they need to stay afloat. Nah, you're still making the low volume users subsidize the high volume ones, and then you're gouging the high volume users to the point where they either find a new isp or quit their streaming.

So the poor saps back in the verizon example are paying the $20 for 2gb when quite a few of them use less than 100mb a month and should be paying... $1.

I'm even worse... I'm down at the less than 10mb a month user... Give me my damn 10 cent bill for crying out loud. I'm on wifi all the time. 99.9999% of my usage is being paid for through other providers, but I still have to pay the verizon tax to have a smart phone that uses 10mb of their bandwidth.

Already effectively have metered pricing

[pubwvj]

We already effectively have metered pricing. We pay $125/month for 1.5Mbps. We only get about 90% uptime. If we were to use that at absolute maximum date throughput (impossible) we would get 6GB per month of usage. In reality we only use a small portion of that. So we're paying 5x as much as the plan they're proposing. This is the reality of rural aDSL.

Re:Already effectively have metered pricing

[pubwvj]

Oh, and one other detail: there is no competition here. The only ISP is the phone company.

Re:Already effectively have metered pricing

[TheDarkMaster]

Free market is a fairytale.

Re:Already effectively have metered pricing

[aXis100]

The math says you should be able to do 400GB a month on that.

1.8Mbps / 10 = 0.18MBps effective throughput including overheads
0.18MBps * 0.9 uptime = 0.162MBps average available throughput
0.162MBps * 86400 seconds = approx 14GB per day
14GB * 30 = 420GB per month

Re:Already effectively have metered pricing

[Eskarel]

It's not so much that the free market is a fairly tale but that the "perfect" free market is and the US government is for any number of reasons unwilling to accept this(not that other countries aren't just as stupid). Network infrastructure is horribly expensive to build and maintain and anyone with the tiniest bit of common sense can see that if we make every single service provider lay their own cables we will end up with a dozen crappy networks all of which are trying to pay off huge infrastructure investments. Simultaneously of course having your competitor own the infrastructure you operate your service on is also ridiculously stupid because they'll either screw you or have to be so heavily regulated they can't actually function (as an Australian I'm looking at you Telstra). What you actually need to do is have an entity build, own and operate the network who is not a participant in the market which actually uses the infrastructure. If you could get that entity to be primarily interested in community benefit as opposed to profit and be willing to operate the network at cost, so much the better. The issue of course is that though that entity exists, it's called the government and free market nutters will never accept letting them operate in this capacity.

Re:Already effectively have metered pricing

[swb]

I've long that this should happen in the cellular market.

To me it makes zero economic sense to have four major carriers each building and using a separate wireless infrastructure and using 4x the wireless spectrum.

Rather than have the government operate it, I'd prefer to see a heavily regulated monopoly run the towers and backhaul and sell wholesale to retail providers who looked like the existing carriers now, minus the wireless infrastructure. Regulatory oversight would be used to minimize costs, set targets for infrastructure upgrade and investment, executive compensation and maximum profit margin.

The benefit should be a lower cost for cellular data since you're removing at least a third of the excess infrastructure by having a common wireless network not arbitrarily split between carriers. I'm not sure if it would make phones cheaper, but the phones themselves would need less radio complexity although the handset makers may already be integrating universal radio functionality now.

Carriers selling the actual cell service to users would be forced to be a lot more customer service oriented since switching providers would be trivial. Setting up a new "carrier" would be much easier, since you wouldn't have to build an entire network. This might mean more innovative cellular data products, too, as some retail carriers may decide to specialize in low speed data devices or other niches where they can keep their costs lower than providing retail voice-type service.

Re:Already effectively have metered pricing

[Eskarel]

A heavily regulated monopoly is just about the worst option you can pick. It combines all the worst aspects of the most inefficient government agency imaginable with all the worst bits of the most greedy gigantic private mega corps. The company can't be allowed to actually make any real decisions about pricing, maintenance, services or upgrades and yet they still have to make an annual profit. Just a terrible terrible idea.

Re:Already effectively have metered pricing

[swb]

I'd be more inclined to agree with you if there was a product with the same features as cellular data that competed with it, but there isn't. Fixed wireless and terrestrial communications aren't comparable.

And it's not like the "free market" has done much for cellular service besides create private near-monopolies with built-in anti-competitive features like device locking and incompatible protocols, implementations and frequencies, coupled with high prices and weak infrastructure investments. Not to mention the grossly inefficient duplication of resources -- the aggregate unused capacity of all carriers costs money to provide and we pay for it.

The electricity, water and natural gas systems have done a pretty good job as regulated monopolies, still manage to make money and deliver product without too many problems.

Since the demand for cellular connectivity is high and the market unlikely to switch to any other service in the foreseeable future, it's hard to see how this wouldn't work. Wholesale pricing to retail carriers could easily be calculated as a function of fixed profit margins, R&D investment, capital expansion and operating costs.

What might work as well would just be a cellular licensing requirement that mandates that all carriers use interoperable frequencies and protocols so that handsets can communicate with any carrier. Carriers could track which "customer" used what services with their tower and implement a chargeback system so that carriers with less infrastructure wouldn't be subsidized by carriers with more infrastructure.

The current system now is false competition and we pay for all its inefficiencies because the switching costs are high.

Except

[daninaustin]

Except that in many areas of the country you don't have any choice. Where i live (outside Austin Tx) the only wired provider i can get is Roadrunner. Luckily for me they offer 50/5 Mbit unmetered service for a somewhat resonable price. Many years of govt created monopolies and high barriers to entry mean that it will be years before we have real competition.

Re:Except

[buddyglass]

Where, if I may ask? I thought U-Verse was available most places Roadrunner is. Can check here.

Re:Except

[daninaustin]

No, my wife used to work at ATT (on the UVerse team) and we still couldn't get it. It depends on wire length plus a few other factors. I used to be able to get 144kbit IDSL but even that's unavailable here now. We are just outside the city limits, but still in Austins extra territorial juristdiction.

Re:Except

[buddyglass]

Just priced it out and you seem to be right. Uverse is only cost-competitive at 3 Mbps and ~20 Mbps price points, and then only when you use the one-year discounted rate. For $35/mo you get 15 Mbps with TWC vs. 6 Mbps with Uverse. This assumes those Time Warner rates aren't also "fake" one-year discounts.

Time Warner:
2 Mbps: $15/mo
3 Mbps: $30/mo
15 Mbps: $35/mo
20 Mbps: $45/mo
30 Mbps: $55/mo + $6/mo modem rental
50 Mbps: $65/mo + $6/mo modem rental

Uverse:
3 Mbps: $41/mo ($30/mo for first 12 months)
6 Mbps: $46/mo ($35/mo for first 12 months)
18 Mbps: $56/mo ($45/mo for first 12 months)
24 Mbps: $66/mo ($55/mo for first 12 months)

Re:Except

[buddyglass]

I'm not seeing on that page where it says the rates are only discounted for 12 months. They mention a $10 "online discount", but there's no indication it only lasts for 12 months. Though I certainly wouldn't be surprised if that were the case.

worst country ever.

[Xicor]

we have one of the most expensive/slowest internet connections in the first world, if not THE most expensive. it is ridiculous that our government allows this kind of bullshit. it isnt just in rural areas that this occurs... it also happens in city districts where the city has a contract with an internet provider to where it is the only one that ppl can get in an area. Our university falls under this category... we are in the middle of a city, but the only internet we can get in the area is time warner... and they use this to totally screw everyone over. we pay almost 30$ a month for 5mbit internet.... and it has a shitty connection.

Re:worst country ever.

[buddyglass]

I dub this post "First World Problems, Slashdot version". I have to pay $30/month for 5Mbit/s internet?!? WORST COUNTRY EVER .

Re:worst country ever.

[Xicor]

just going to point out that google charges 70$ a month for 1000mbit/s, and all of japan and korea also have fiber for roughly the same price. most of western europe pays 30 euros/month for 200+mbit.

Re:worst country ever.

[buddyglass]

Yep. Overpriced internet is still a ludicrous reason to conclude "WORST COUNTRY EVER".

Re:I don't mind metered internet usage...

[rolfwind]

Tell me, when this pricing goes into effect for this ISP, and people shut off their computers/don't download anything at night, what is saved in that period?

A massive amount of electricity? Or water? Was a huge amount of bandwidth saved overnight?

Wrong question

[PopeRatzo]

The important part of this story is that the costs this co-op has to pay for bandwidth have gone up 900% since 2009.

Maybe someone needs to ask why it costs nine times more to connect today than it did five years ago.

If, as I assume, the increase comes entirely from the telecom who sells the co-op bandwidth, then the Justice Department needs to come down with a heavy foot on the neck of the telecom.

We've allowed just a few companies to control communications for an entire nation. They need to be broken up into tiny pieces.

Maybe it's just the fact of life in a market economy that every so often the top 100 companies need to be blown up by government. Instead, we have the government serving the interests of those companies by granting them de-facto monopolies and monopsonies when it comes to the labor market.

Once you've let things go this far out of whack, it's too late to just deregulate because it will just give those companies a license to steal. Unfortunately, once government policies have allowed monopolies to exist, the only way to set things right is to have government break them up.

If there were competition, it would be a few cents

[rbrander]

In an environment with truly open competition, prices must be driven down to the costs of production, plus whatever profit pays for the seller's own work and risk. Anybody charging more is outpriced by somebody willing to accept that minimum.

Every service provision has capital and operating components. Connection to any network - water, gas, power, comms - has a fixed price whether you use it or not, and an incremental price proportional to usage. Keeping a network to a whole city running costs a good $25/month, flat - but then incremental water, power, whatever, are often pretty cheap. Blended rates per-unit only work where everybody consumes in the same order of magnitude at most. (Many get around this because the high consumers can be identified and "commercial rates" for water or whatever are lower per-unit.)

And we know the answer on gigabytes: Netflix pays something under a nickel each. Since bandwidth purchases differ by well over an order of magnitude, the bill will always screw somebody to benefit another unless it breaks out the costs: $35/month plus a dime a gigabyte, (or something similar)

The end?

[TheDarkMaster]

Well... A bit more and will be the end of the Internet.

Alternatives

[Virtucon]

HughesNet works out in Rural areas and is less than $50/month to start. The EBTC may be out of business soon.

Re:Alternatives

[Megane]

They also have 1000ms ping times because they use geosynchronous satellites. Oh, and according to the wikipedia page, there's a 24 month contract period with steep cancellation fees, and they're serious about getting their equipment back when you do.

Re:Alternatives

[Virtucon]

Yeah but it still beats a $300 / 100GB data plan. Besides with the right kind of TCP/IP stack tuning you can live with 1 sec response time, I could vs. paying local ma and pa kettle telco.

Re:I don't mind metered internet usage...

[dk20]

They did this some time ago in Canada as a response to "Netflix".

My response to was to dump them (think of the three most hated companies in canada, i was with one of them) and go with the other guys. I schedule my bulk downloads for late at night to not impact my neighbours as its the right thing to do anyhow...

I agree, metered internet is just a scam. You offered "unlimited 24x7" then started that was for unlimited time not usage, then introduced traffic shaping, then caps?

If you business model isn't working its not my job to make it work, and it is not the governments to introduce new favourable legislation for you.

Re:I don't mind metered internet usage...

[jedidiah]

If the market looks like communism, then sure...

Where are the competitors here? What companies can the victims of these jack*sses flee to? If the answer to that is the sound of crickets, then "communist" price controls are entirely appropriate.

They are appropriate for the same reasons that public utilities are heavily regulated.

honestly...

[buddyglass]

I'd be fine with that pricing model if it came with the stipulation that network providers be "source/destination neutral". Here's a helpful thought experiment:

Imagine if, overnight, every customer turned into a 5GB/mo customer. Take the amount by which that would lower the provider's cost and divide it by the number of customers. This is what the "base" price should be for 5 GB/mo. Now take that same amount and calculate the per GB price (over 5 GB) the provider would need charge to recoup that same amount, taking into account that charging on a per-usage basis will depress usage relative to the status quo (and that depressed usage will also lower costs; solve for the equilibrium). Voila. Each customer's price now roughly matches his or her cost to the provider. Sub-5 GB/mo customers will see their rates drop, as will those whose usage falls beneath some inflection point. Customers whose usage exceeds this inflection point will see their cost increase at a level proportional to their data usage.

Re:I don't mind metered internet usage...

[Qzukk]

What, all the people saying "well granny shouldn't have to pay for the interwebs she's not torrenting" are suddenly wising up to the fact that the granny tier is going to be regular price and the charges go up from there? Did they honestly think granny was going to get a discount for just using email?

Not Net Neutrality

[ichthus]

This has nothing to do with net neutrality.

AOL did this long ago, except instead of gigabytes, it was minutes. Cell providers also do this currently, offering different pricing tiers based on usage.

So, enough with the disinformation campaigns already. Net neutrality should either succeed or fail based on its own merits -- everything that an ISP does that may be objectionable is not necessarily attributed to the absence of net neutrality.

how it is

[GoodNewsJimDotCom]

If the communication (cable/phone) providers didn't sit down and say,"Hey lets try our best not to compete on prices so we can maximize rates", they wouldn't be able to keep jacking rates up." Normally the government is supposed to be there to regulate the telecommunications giants, but the way campaign contributions work, government is bought and paid for. The key is that they don't stop at your actual rate you agree to, they'll jack you up to a higher rate when they feel like it. My cable company also lied to me at my rate I agreed to. I pay 50% more than I agreed to on the phone. There's no alternative though since they don't compete. It really looks like the only hope is Google Fiber offering 1 gb/s for cheap. It is interesting to see how many dirty tricks the big players use to try and keep Google from competing. I mean they already sued away state funded fiber in places. I'm surprised UPS/FedEx haven't tried suing away the post office with the same logic.

Re:I don't mind metered internet usage...

[sjames]

Capacity costs, but it doesn't cost THAT much. However, that doesn't translate well to transfer. If you have 1Mbps from 6-10pm, you might as well have it 24/7, it's not any more expensive to provision.

Because of technological progress, the same connections that could do 1GBps in the '90s can do 100GBps (or more) now. The Gbps dumb switches that cost >$1000/port in the '90s cost $80 total now (or $300 -$1000 for 48 ports if you want it smarter).

What I don't understand is people pretending bandwidth is getting more expensive when actual costs are in freefall.

Okay, but ...

[MacTO]

I do believe that internet service should be metered. However, the only way that I would accept it is if they treated it like an electric bill: you pay a base rate plus the metered rate, and the metered rate is fine grained. Based upon their rates, they should be charging $0.05 per 10 MB instead of $5 per GB. Plans should be scrapped because they lead to dishonest sales tactics anyway (e.g. overselling customers on a 25 GB plan when they know that the customer never uses more than 1 GB in a month).

Oh, and their metered rates are insane (even if it were fine grained). At those rates, you may as well get someone to burn the data to DVD and ship it courier. It would probably be cheaper.

Re:Okay, but ...

[EzInKy]

Who are you to dictate how much a provider should charge for their service.

What has this to do with net neutrality?

[Anonymous Coward]

First off, these type of charging is common in Aus / NZ. The higher volume charges are too high in the OP above. We pay around $100-120(AUD) per month from 500gb-1000gb. More data does cost more, it's simple.

That said, there is nothing in the charging above that constitutes slowing or favoring some sites over others. Taking kickbacks from youtube or netflix. It is only a tiered pricing system.

This sort of tiered costs can avoid having to throttle heavy users as they are actively paying for more data.

DrE

Re:What has this to do with net neutrality?

[ShanghaiBill]

This has nothing whatsoever to do with net neutrality. But NN has been in the news lately, so by mentioning it in the summary, maybe they can get more page views!

Re:What has this to do with net neutrality?

[hab136]

> More data does cost more, it's simple.

No. A 600 MB/s pipe costs the same to operate whether you send 30 GB or 300 GB down it over a month.

Metering by the bit (instead of by bandwidth) is pure profit-taking.

Re:What has this to do with net neutrality?

[N1AK]

You're right that it doesn't relate to this individual case: a small co-op in Ohio. However, I assume it was mentioned because if providers can drop your free bandwidth cap and allow web companies to pay so their content doesn't count (as has been reported on here before) then there might be a move towards this on other larger ISPs.

Re:What has this to do with net neutrality?

[N1AK]

There is a nominal cost to increased data within an ISP, but it isn't enough to be relevant to this.

The point that people claiming that charging by the bit is 'profit-taking' seem to be incapable of getting is that profit-taking is inherently the taking of profit. When the company is a small co-op in Ohio it clearly isn't profit taking. Even if it was a commercial entity the method of charging doesn't define whether it is profit taking or not.

Try and take a step back and consider two things. Firstly, that there is clearly a correlation between quantity of data and use of bandwidth so pretending that they are somehow entirely alien to each other is disingenuous. Secondly if the company is making a reasonable profit, and being efficient, then it isn't abusive to have a charging model that gives people with limited usage a lower price by giving high users a higher price.

Re:What has this to do with net neutrality?

[grahamm]

A correlation but not always a meaningful one. Consider 2 customers, both of which download about 1GByte per day. One streams approx 500MBytes/hour for 2 hours during the peak period when many other domestic customers are doing the same. The other is downloading at a relatively constant rate of approx 40MBytes/hour 24x7. Even though they both download approximately the same amount each month, the first customer is probably costing the ISP considerably more than the second. If all customers were like the 2nd one then the ISP would only need 1/10 of the external capacity than if all customers were like the first one.

Re: What has this to do with net neutrality?

[lokidjm]

All of EBTC's 80 VisionNet customers stream IPTV from Shellsburg, IA. Those people are using at least 3 Mbps of bandwidth constantly while watching TV. If all 80 people are watching TV during primetime they are likely using more bandwidth than all of EBTC'S internet customers combined. EBTC's DSL and line of sight broadband customers are subsidizing the cost of EBTC'S IPTV service. An argument can be made that is it anticompetitive that EBTC gives preferential treatment to their IPTV steam over competitors like Netflix, Hulu, Amazon, and Google. EBTC confirms that up until three days ago that they were giving their IPTV service a higher priority on their network. According to Neilson the average person watched 151 hours a tv per month in late 2008. A person watching 151 hours of tv per month is using 226.5 GB of data (1.5 GB per hour). Using EBTC's current internet rates that TV user is using $931.50 worth of data per month. http://www.cnn.com/2009/SHOWBIZ/TV/02/24/us.video.nielsen/

Re:What has this to do with net neutrality?

[mgcarley]

Perhaps, but an ISP is unlikely to buy a 600mbit/s pipe unless it is needed. In practice a small provider buys say 100 mbit/s from y company for $z and 100 mbit/s from b company for $c, configures his routers accordingly (fail-over, least-cost, whatever) and upgrades to the next tier only when he's hitting an average of say 80mbit/s - he doesn't buy 600 mbit/s on day 1 -- unless he has at least say 500 of those mbit/s to fill, of course.

The agreement with the upstream probably supports this with wording along the lines of "we buy x mbit/s for $y per month/year (or possibly but not likely, we buy an IRU for $y per decade) and when our usage hits 75-80% continual flow, you get ready to provision us more and bill accordingly".

Given the timeframes given to me by the likes of AT&T when I've gone to them for quotes (don't usually end up buying from them because they're not very good value over their competition IMO) typically this means there will be a 2-4 week period where the network will seem a bit congested while the upstream provider provisions the necessary bandwidth from point A to point Z in it's network to support the new traffic.**

**If you are able to go with a company more efficient than AT&T, you can get more bandwidth provisioned same-day (depending on exactly how much more you want/need, of course).

And of course, the more you buy, the more you save: at the 100mbit level the ISP pays say $25/mbit/mo but at the gigabit level the ISP pays say $10/mbit/mo - the increase in costs **should** only relate to hardware (new SFPs or even new routers), but on a cost-per-customer basis and with equipment basically only decreasing in price, actual expenditure usually works out to be minimal, so to be honest, how they are spending 900% over what they used to is somewhat baffling: in terms of dollars, perhaps it's true; in terms of dollars per customer, I'd be skeptical -- unless 850% of that comes under "executive renumeration" ;)

The rich (data users) should pay their fair share

[Boawk]

It's not fair that those who use less should have to pay for the rich (data users). The rich (data users) should be subsidizing those who have less (data use). [I don't necessarily subscribe to the view, but the "tax the rich" parallel is interesting.]

Winthrop, Iowa

[westlake]

As of the census of 2010, there were 850 people, 346 households, and 228 families residing in the city. The population density was 1,011.9 inhabitants per square mile (390.7 /km2). There were 357 housing units at an average density of 425.0 per square mile (164.1 /km2).

The median income for a household in the city was $36,136, and the median income for a family was $42,969. Males had a median income of $31,641 versus $22,500 for females. The per capita income for the city was $19,183. About 4.3% of families and 5.7% of the population were below the poverty line, including 6.3% of those under age 18 and 7.8% of those age 65 or over.

Winthrop, Iowa

No Wikipedia entry for this rural Telco co-op. Buchanan County, Iowa (Area 573.35 sq mi, 1,485 km2) has a population of about 21,000. In 2010, males had a median income of $30,212 versus $22,356 for females. The per capita income for the county was $18,405.

The investment opportunity here looks non-existent.

Re:Winthrop, Iowa

[jsepeta]

My suggestion is to move west to Waterloo, Iowa. Bigger population, more economic opportunities, likely better internet.

Re:I don't mind metered internet usage...

[buddyglass]

Would you like metered television too? No longer broadcast to you 24/7, now you get to watch 90 minutes a day, and after that you have to pay? Would that make sense to you?

I might actually pay for cable if it worked like that, assuming that plan came at a steep discount over the current "all you can eat" model.

No one wants the heaviest users ...

[perpenso]

don't know the details in this ares, but I doubt they would e setting up this kind of metered service tiers if they had and competition.

Sure they would. They might fight over the 5GB / month @ $25 customers but they are not going to fight over the 100 GB / month @ $300 customers. Neither company probably wants the later very much. They would probably prefer 20 people at 5GB paying $5/GB than 1 person at 100GB paying $3/GB.

Re:Free Market Capitalism? Can you hear me now USA

[Lawrence_Bird]

there was a time (very long ago) when it may have been justified to give monopolies to the local utility companies. That time is long past and legislation should be passed as necessary at the federal, state and local levels to phase those monopolies out over the next five years. But given that people vote for the same representatives who are bought by lobbying over and over again I don't hold out much hope.

Re:I don't mind metered internet usage...

[westlake]

As a customer, I do mind metered internet because it's bullshit.

Do words like "rural co-op telco" ring a bell?

Every cent you pay to East Buchanan during the year, be it for telephone, long distance, Internet, wireless, cable, Talknet or VisionNet, eventually comes back to you in the form of dividends.

In the ten years from 1990 through 1999, East Buchanan paid back over 5.25 million dollars to its customers in patronage dividends. With the average percentage per customer, being 51%.

About East Buchanan Telephone

Re:I don't mind metered internet usage...

[PhotoJim]

My ISP is semi-metered (throttled when you hit the cap) but 1 am to 8 am bandwidth doesn't count against the cap, precisely because their equipment is significantly less busy during those hours.

Re:I don't mind metered internet usage...

[Rockoon]

If the answer to that is the sound of crickets, then "communist" price controls are entirely appropriate.

What you seem to be missing is that in this case, the ISP is a community coop, and thus almost exactly fits the definition of "communism" already.

I believe the facts here are that the coop pays a shitload of money to connect to the rest of the world, and some of the reason for that would be their remote location, but primarily the reason for that is that these idiots don't know what they are doing and are getting taken advantage of by everyone they have to do business with.

The kicker is that none of the people in that community has much incentive to learn how wheel and deal in the market that they jumped into. The most you will get for all that time and effort is a better internet connection.

paying by the meter is appropriate

[YesIAmAScript]

But it has nothing to do with net neutrality or this ruling.

Both of those things aside, $100 for 25GB per month is too high. Tiered pricing is fine, but gouging isn't.

Re:I don't mind metered internet usage...

[noh8rz10]

metered TV would be awesome. 90min/day more than meets my needs. By definition a TV can only show 24 hours a content a day, regardless if you have 1 channel or 1000. bonus if the plan were set up to include overages at a reasonable cost, like $0.50 per hour beyond 90 mins. i would sign up for that in a heartbeat.

what do you expect in Bucharest?

[OFnow]

Wait. What? You said Iowa?

Re:I don't mind metered internet usage...

[Anonymous Coward]

No, no, no, you don't get it- You'll end up paying the $50 per month, just for the 90 minutes a day. Want to finish that 2-hour movie? Welcome to Overage charges- $20 per hour or part thereof.

It will backfire

[GeekHillbilly]

If and when the ISP starts that,I am prepared to cut loose immediately.Just because they sell it doesn't mean I have to buy.

Re:I don't mind metered internet usage...

[Anonymous Coward]

Do you think that once you've installed it, you can magically transfer any amount of data through those cables you like?

Well, my phone line once carried 2400baud, then 9600, then 28.8, then 33.6, then 56k, and now it carries 5mb (DSL). Cable TV wires once carried 0mb, and now I can get 30, even 50mb. So....

900% increase in cost?

[hackus]

Where is their operations center in Zimbabwe?

What a load of Sh*t.

-Hackus

Quis custodiet ipsos custodes?

[saleenS281]

They can basically charge whatever they want at this point. The average consumer has no way to know how much bandwidth they're REALLY using. Verizon Homefusion is NOTORIOUS for overcharging people, and they get away with it because how do you as a consumer PROVE that you didn't use as much as they claim you did? If you're technically savvy you'd probably be bright enough to setup something like pfsense and log all of your traffic so you can prove it, but for the average mom and pop, you just have to eat it.

Case in point: https://community.verizonwireless.com/message/1035492

Re:Quis custodiet ipsos custodes?

[Firethorn]

The trick is that with a few tech savvy people providing disputing logs you can then elevate it to class action status, much like a standards board. Get a few people complaining about being charged overweight and it causes some big nastiness.

Then again, I remember reading about the weights and measurements board while I was in ND. Talk about a group you DON'T want to piss off. Since bandwidth is indeed something that can be 'measured', a state's weights&measurements organization might be able to intercede, though they may lack the skill to do so.

Re: Subscribers up 900%, costs up 900%

[QuasiEvil]

Honestly these little telco coops just don't have the clout and size to do this sort of thing efficiently, and they typically have a lot of very rural customers on very long loops (read: no DSL no matter how you slice it). My hometown is 1000 people in eastern Iowa, but it's served by Qwest/Centurylink. As much as I love to hate on 'em, they drug fiber to town and rebuilt the CO in the 1990s. My dad pays much less for internet access than I do living in Colorado Springs, and until a few years ago got better bandwidth.

I'd suspect that they have - at most - a few thousand DSL subscribers scattered across the county. Doesn't make for any great efficiencies there. Honestly I'd be surprised if somebody isn't putting radios on top a couple elevators in the county within a year to compete. Grain elevators make awesome towers, and we Iowans have lots of them.

Re: Subscribers up 900%, costs up 900%

[lister king of smeg]

Republican state? wasn't Iowa the swing state that won Obama an Democrate the 2012 election?

Re:Subscribers up 900%, costs up 900%

[Dunbal]

Costs are up 900%! Of course we have 900% more customers, and we're making 600% more profit, but let's concentrate on those COSTS! OMG!

Re:Net Neutrally cures all ills!

[Microlith]

Never mind that the Net Neutrality legislation that we had would have pretty much forced all ISP's to this pricing model before too long, unable to make pricing deals with popular streaming video sources...

No, this is better than that pricing "model." The problem here is that the price per gigabyte is ridiculously high.

Never mind that Net Neutrality as people are championing it is all about every byte to you being treated "equally" despite the fact that not one person on earth has not wished for network prioritization for favored content since the dawn of networking.

Most people want their data, whatever it may be, to be high priority. Solved by buying a higher throughput connection. Per-service, per-website discrimination should be left up to the user, not the ISPs who are hoping to use it to double dip for their pipes and hold their own customers hostage.

Re:I don't mind metered internet usage...

[Anonymous Coward]

It's because we understand that, unlike water or electricity, each additional unit of "internet" does not cost the same as the one before it. With water and electricity, your generation costs typically become your floor, fixed costs, with installation costs being minimal (over the 10/20/30/40 years that you use it). While with internet, installation and upgrade costs are everything, with generating costs pretty minimal. Also, unlike electricity and water, where the ongoing infastructure cost is born by the generators (or the public), rather than the distributors (think electrical resellers), internet is the opposite.

Re:I don't mind metered internet usage...

[beelsebob]

The fact that the bandwidth available at one time is not always used does not imply that there is not an upper limit on the bandwidth used.

Re: Subscribers up 900%, costs up 900%

[TykeClone]

They are a coop telco in Iowa - that means that they are leaps and bounds ahead of the big boys in rural areas for providing good internet access.

Re:I don't mind metered internet usage...

[bugs2squash]

I'd like to think they can ring a bell at least! But seriously, I'm sure the co-op's main task is to bring reasonable telco services to Buchanan, not to distribute dividends. The less tangible dividends come from making Buchanan a viable place to telecommute from, attracting businesses that need data infrastructure and bringing the conveniences of modern life to the residents.

Re:I don't mind metered internet usage...

[Gabest]

The equipment do cost money, but if it's already there, why leave it running unused? That makes no sense. Like the electricity at night is wasted because it cannot be stored. Every second the maximum capacity is not used, that's a forever lost opportunity to transmit data.

Re:I don't mind metered internet usage...

[Gabest]

Let's say the average subscriber watches television 1 hour a day. Anything above that will cost you more than you pay now. How does that sound?

Re:I don't mind metered internet usage...

[ynp7]

There is no "market" to set a price when you have one company, operating under a government-sanctioned monopoly, controlling all Internet access with speeds over 5Mbit.

Re:I don't mind metered internet usage...

[ls671]

It's "à la carte" and it has nothing to do with a cart like in "shopping cart" or "golf cart".

"à la carte" comes from french restaurants where you have the "table d'hôte" where you buy a meal where everything is included for a fixed price by opposition with "à la carte" where you pay for every item individually.

In restaurants, "la carte" means a menu of items that you can pick individually.

"Une carte" is also used to name a card in a deck of cards used to play poker. "Une carte routière" is a road map so "carte" may also mean map.

From Paris.

Robber barons have no incentive to serve

[Taco Cowboy]

Why should robber barons serve their customers when they can rob them blind ?

The problem with the United States of America is that history kept on repeating itself.

Back then it was the railroad fellas who monopolizing the transportation, then came the petroleum fellas, and then the US government supposed to have done something to curb the power of those robber barons ...

And when everyone is not looking, the robber barons bought up Washington D.C. and here we go again.

How come South Korea and Japan can have ISP which provide their customers with Gbps throughput while on the United States of America the end users have to put up with all those robber barons ?

Back in the 1980's, just when the Net was started, everyone was pulling their own cables. At that time the competition was fierce, and customers (particularly those staying in cities) get a lot of very nice choices.

And then the telcos stepped in, bought up the politicians and changed the laws - forcing the indies (the *true* ISP) to either shut down of sell out, and look what we have here ... another round of robber barons intending to squeeze the last penny out of their customers.

Sigh !

Re:Robber barons have no incentive to serve

[OptimalCynic]

It's a cooperative, you numpty.

Re:Robber barons have no incentive to serve

[hairyfeet]

Sorry but that is quite easy to prove to be bullshit, just look at the megacities like NYC and LA and how much lower their bandwidth and much higher their costs are compared to Asia.

The simple fact is thanks to monopolies/duopolies and cherry picking the USA is in the top 10 for ISP prices but in service we are worse than countries like Romania. This is not gonna change as long as we let the ISPs control the last mile, in fact we already paid the ISPs to the tune of 200 billion to provide the USA with nationwide 50mbps broadband and all we got was a low res Goatse and bonuses for all the CEOs. If the ISPs refuse to pay back the 200 billion with interest we should take control of the lines and open them up to competition as we did during the days of dialup. If they want a monopoly? Tell them they can have 15 years exclusivity for every FTTH they provide but the current situation? Its a total scam, they are treating bits like they are a scarce commodity (Protip: they aren't, the ISPs are being allowed to massively oversell and outright lie about actual speeds) and now that Net Neutrality is dead? Watch prices soar.

Re:Robber barons have no incentive to serve

[RavenLrD20k]

STFU STFU and again STFU!

I'm sick of this damn strawman argument making excuses for these fucking fat-cats. America has plenty of high-density urban areas that are just about as archaic in their infrastructure as the Rural Co-Ops. In my state, Cox cable only rolled out proper RG-6 cable lines to handle the digital signal about 5 years ago, and there are still neighborhoods using the old RG-59 standard to the home, which is a bleeding nightmare to get proper speeds on. Proper speeds being about 10Mbps. Comcast is running tiered service, and I haven't heard anything but complaints about quality. Standard Cable is a fucking joke. AT&T DSL doesn't have nearly enough CO's to handle the number of people who want to get broadband, and no plans on building up any more for the forseeable (5 year) future. In fact, the best service I've heard about in Georgia is from a fucking electric Co-Op that's bringing FTTH service that provides Electricity, TV, Phone, and 10Mbps Uncapped Internet for better overall rates than Cox does for just TV, Phone, and 200GB monthly cap Internet. Exact comparisons: BRMEMC's price for Electricity, TV, Phone, AND Uncapped internet on the combined bill runs roughly $50 to $100 CHEAPER than Cox for just TV, Phone, and 200GB Internet.

There is nothing that stops these companies from providing higher throughput with current technologies that are in place except for greed and the desire to milk subscribers for every penny they have. I know for a fact that every service Truck that Cox owns has a Ladder or bucket and several 2,000' Spools of RG-6 cable and no shortage of high throughput line taps to be able to upgrade every single customer still on the old standard to the proper lines for sustained service. There is no reason for Cox to not be able to make a huge profit on providing $50 1Gbps service. Instead, we've got all these fucking companies going the other way and saying that we need to provide less service for the same fucking money. Instead of increasing to come closer to matching the rest of the world, our fucking service providers are shoving it up our collective asses and DEGRADING our services.

That's it! It's time for the tech minded to Unite and take this damn Country in the right direction towards faster propagation of information instead of the current trend towards slower. This means we need to start making our own active business war against the Data conglomerate! I don't care if a good deal of the bandwidth winds up being used for Cat videos, the Internet is now our emergency communication system, there is no current technology any faster to be able to spread news across the entire continent, and the trend for degradation of these speeds will only serve to make us more and more vulnerable.

it is still cheaper!

[PC_THE_GREAT]

Still cheaper than internet on my island, Mauritius! around $285/mo for a 4M adsl line here! Cheapest is $28 for a 512kbps (yes not KBps but kbps) for a max 5GB monthly usage. So :p yes iowa is way better :p, and i better has better latency.

Questions?

[Bender Unit 22]

I would have suggested that the people of East Buchanan got together and created their own service. But when looking at this phone company it says East Buchanan
Telephone Cooperative.
So it is owned the "customers", right? They should be able to change this then.

Re:I don't mind metered internet usage...

[buddyglass]

I don't pay anything right now because I don't have cable or satellite. I watch a few shows over-the-air and go to a restaurant or bar (or my in-laws place) when I want to watch a sports event that's only on cable. Sports is about the only thing I want to watch that's not broadcast OTA.

End of the Internet

[kheldan]

If this was done by all ISPs, it would pretty much kill the Internet for everyone.

Re:I don't mind metered internet usage...

[firex726]

That's not really relevant, since the main issue for network infrastructure is concurrent usage. If everyone on a 5GB plan used their BW at the same time, then the networking gear would need to be able to accommodate that, and the remaining time it'd be underutilized.

This is why many ISPs and hosting provides oversell their bandwidth, with the expectation that not everyone will A)Use their full allocation, or B)Not use their allocation at the same time.

Ah, I like where I live..

[kuldan]

Back where I live (southwestern Germany), we have a Cable ISP that is the pure internet goodness in 99% of all cases..

this is their top-tier plan:

Internet Access (150Mbit Down / 5Mbit Up)
Landline + Flatrate
HD-PVR
some PayTV Packets

all inclusive: 47€/Month ($63 US, including taxes)
Oh, and obviously, they don't do any metering on traffic.

Nothing to do with net neutrality

[Captain_Chaos]

With the landmark Net Neutrality ruling this week will larger providers try to move to similar price models?

Why would they? The one has nothing to do with the other. If anything, since providers can now be payed at the back end as well, they could in theory lower prices at the front end. In theory.

For comparison

[Captain_Chaos]

I live in the Netherlands. I have a 60/6 MBps cable Internet connection, in combination with digital HD cable TV and telephone service, for € 54 ($73) per month. This is with "unlimited" bandwidth (they do have a "fair use" clause, but I've never heard of anyone hitting it). For the Netherlands this is pretty typical.

Re:For comparison

[Captain_Chaos]

Sorry, that should be 60/6 Mbps of course.

While in Japan...

[MidnightBrewer]

I have sustained, symmetrical throughput of 50Mbp/s, no data cap, and pay about $60 per month. Half the population of the US, so it would seem that numbers aren't the problem. Hmm.

Follow the MONEY - they operate CABLE

[Overzeetop]

This, like many rural telecoms, also runs the local cable TV franchise - probably the only one. The first thing I thought when I saw those caps was "hey - that's pretty much aimed at Netflix, Hulu, and other streaming services". See, because they are having people on BB drop their cableTV, which is costing them subscribers and *effectively* raising the cost of their fixed cableTV payments.

Otherwise, as a cooperative, they would (should) be charging a basic rate for the speed and include a "cap" to recover their costs for equipment and maintenance, beyond which you pay only the Tier1 rates for data. I am, of course presuming that even a small cooperative does not pay $3/GB for Tier1 transmission (which would be so stupidly insane that the entire tech staff should be fired, or at least investigated for a kickback/bribe scheme with whomever their current provider is).

5 gb?

[Stanislav_J]

Most people use 5 gb/mo.? Really? Hell, I do just basic web browsing, no gaming, no streaming movies (just the odd YouTube vid now and then) and I still chew up a good 20-25 gb. Somebody just checking e-mail, Facebook and a few blogs and news sites several times a day probably tops 5 gb before the month is up.

Re:$100/month

[EzInKy]

$100 a month is $1200 a year for goodness sakes! Cut the cord man and you'll be $12,000 richer ten years from now.

Cloudy Future

[SumterLiving]

Thankfully the "Cloud" is and will solve all my personal and business concerns. Because after all, using OpenOffice on my work/home computer is just plan stupid when I can open, edit, collaborate and save all my docs via an on-line connection. Unless that connection will end up costing more and more each year. I'm beginning to think jump drives will be the new, old cloud of the future.

Solution: End Internet Privatization

[Digital Vomit]

I think [internet] communication is such a fundamental need for society that we can't risk having internet access remain in the hands of private interests. Internet access -- from the wires in the ground to the modem in your home -- needs to become a public good. Taxes should pay for everyone to have free internet access at the highest level of quality that society can reasonably afford.

Do people even know what a co-op is?

[Koreantoast]

Given everyone raving about evil corporate profits, I wonder if half the commentators even know what a cooperative is. If one simply reads the article, they can see that the members of this co-op are negotiating to try and come up with a better solution.

Re:I don't mind metered internet usage...

[eth1]

Well, the metering *sort* of makes sense, but really the problem is that ISPs lie like crazy when they sell you a connection.
What they say is "50Mbit for $49.95/mo! **"
** (that you can't use at 50Mbit all the time because it's way oversubscribed)

What they *should* be doing is selling various combinations of guaranteed/burst, so people know what they're actually getting. I have a feeling that "unlimited 50Mbit" really means something more like "512kbit guaranteed, 50Mbit burst."

Welcome To Alice Springs

[cmholm]

"This is the norm for us"? I'm in the middle of the bleeding country, 1500km from the nearest capital city, and I pay $80/mon for 400GB through Internode. Who's got you by the knackers? Even Telstra isn't all that much more expensive.

We need congestion pricing

[Logger]

If I use 100GB/month, but only when nobody else is online, I'm not impacting anyone else and I'm only very marginally increasing the ISP's cost. If you want a pricing structure that actually reflects what the market will bear and would adjust buyers habits at the appropriate times, you need congestion based pricing. But I can't think of a good way to implement that, which isn't confusing.

Meter my landline, I go to unmetered cellular

[Ken_g6]

I have unlimited 3G internet with T-Mobile, which I think includes unlimited tethering (I've never tried it to be sure), for $50/month. It's only 1.5Mbps, but unlimited slow is better than limited fast IMHO.

Re:I don't mind metered internet usage...

[Luke has no name]

Television is multicast/one way traffic. The infrastructure is completely different.

In 20 years when a podunk ISP can easily have 40/100GB backbones for low thousands, and IPv6 multicast is here to allow for IPTV and some clever ways to cache and stream videos, these arguments for data caps will be much less believable.

Make it roll over

[countach44]

If I pay for 100GB of data, but only use 5GB, then I should retain my remaining 95GB for the future. I did pay for it. Otherwise, move to a true utility model.

The company is LYING.

[Lumpy]

The cost of an OC3 data pipe to a POP with internet routing has dropped by nearly 30% since the date they claim it has went up 900% They are lying through their teeth.

It's all about the costs of isolation

[Shirley Marquez]

That ISP is in a rural area in Iowa. The cost of getting a high speed backbone feed is likely to be very high for them; much more than ISPs in urban areas pay. Urban ISPs either won't bother with metered rates or will charge much less per gigabyte.

Well I'm pleased to say that Europe's got it right

[Palamos]

Despite the often criticised regulation in the EU we seem to have got this one right. I live in the UK, pay c. $24 per month for 80Mbs broadband (20Mbs upload) with unlimited download/upload. I regularly use over 120Gb/month as I usually watch my TV via the internet. Although the UK is at the lower priced end in the EU there's not a broad spectrum of prices across the whole area. In the EU, regulation took the interests of the end user as the paramount factor when setting out infrastructure build targets and pricing levels, anyone that can work within that envelope can enter the business, if you can't then you can't. A free mark has developed within the envelope which delivers acceptable returns for shareholders and acceptable performance for end users. As a result, the UK has hundreds of broadband suppliers, each with their own niche and package and each offering comparatively great value for money. Giving a completely free hand to businesses will only ever result in a cartel developing, that's clearly the case in the UK for the power industry where each is providing power at an independently set extortionate rate, no cap on prices and no incentive to reduce costs. The same can be seen in Australia and the USA with broadband products, not particularly impressive service and high prices - very impressive senior management returns I dare say.