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Broadband CEOs Admit Usage Caps Are Nothing More Than A Toll On Uncompetitive Markets (techdirt.com)
Though giant ISPs such as AT&T and Comcast continue to impose caps on users with several of their data plans, a crop of local ISPs is no longer hesitating from admitting that there is no justification for these caps as the cost to provide broadband services has only dropped in the past years. From a TechDirt article (condensed): "The cost of increasing [broadband] capacity has declined much faster than the increase in data traffic," says Dane Jasper, CEO of Sonic, an independent ISP based in Santa Rosa, Calif. [...] Frontier Communications CEO Dan McCarthy adds, "There may be a time when usage-based pricing is the right solution for the market, but I really don't see that as a path the market is taking at this point in time." Suddenlink CEO Jerry Kent said, "I think one of the things people don't realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity. Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down."
Except crony capitalism is rampant, and so it is not a truly free market.
Once Time Warner introduced a data cap on my broadband service, I instituted several efficiency improvements on my network. Im certain most ISP's will understand, after all, many of these are just content throttling to improve my user experience.
1. Null routing known advertisers: Its a fact of life, that many advertisers cause a strain on my network by utilising far more bandwidth than they should. If advertisers wish to continue, they can purchase additional bandwidth from me or enroll in my advertiser affiliate program for a nominal monthly fee.
2. Ad blocking software: ublock, and noscript are used to help curtail loading flash, tracking, or advertisements that some websites feature. these services also prevent downloading injected advertisements by my network provider (see affiliate program for more information.) 3. torrents: Netflix and hulu use an inefficient protocol in many cases compared to torrents and magnet links. I can watch the same video or listen to the same song at my leisure, whenever I feel like it, without reaching the cap or limit imposed by my provider.
Good people go to bed earlier.
For AT&T and Comcast, it's just business. At the moment, they have leverage in most areas. Most people don't have a comparable alternative to choose so they pick AT&T or Comcast. Comcast offers the best speeds. That's their value proposition over AT&T. When Verizon FIOS and/or Google Fiber show up to offer alternatives with not only faster speeds but no data caps, Comcast and AT&T will have to start actually competing in the free market or be put out to pasture.
We'll make great pets
Is internet service not effectively also a natural monopoly?
In most areas there are at most 2 sets of wires, and it costs money to maintain both.
There is very little economic reason for a competitor to arise, because the existing monopolies can squeeze out any competitor trying to move in easily using well known tactics. The only reason there are 2 sets of wires is that originally, the cable TV wire could not be used to replace analog phones until technology developed in the 1990s.
As much as I'd like to keep the government out of the operations of the Internet, the ISPs:
1) Have local monopolies on high speed Internet access.
2) Have made it clear that they see nothing wrong in abusing said monopolies to hurt video services competitors where they aren't a monopoly (by pricing Internet-only higher than Internet+TV bundles and by capping Internet usage and instituting overage fees in order to penalize people who stream videos).
In this case, your average consumer has no recourse. They can't "vote with their wallet" because there's no alternative. They can't sue the cable company (good luck fighting the cable ISP's lawyers without going bankrupt). Their only hope is for the government to step in and say "This stuff isn't allowed." The government stepping in isn't ideal, but letting the companies do whatever they want is even worse.
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
plus, a free market requires that none of the players be big enough to unilaterally move the price, which is the exact opposite of the usual monopoly situation.
Except crony capitalism is rampant, and so it is not a truly free market.
Never was. The so-called free-market is a myth. Always was. Even the guy who coined the phrase made it plain that without regulatory influence, such a thing would never be possible.
Anyways, the only viable option I personally know about is regulation similar to a utility. This is both bad and good. There's a cost to the regulations - the government has to be paid and when it has to manage something, it tends to charge a lot in taxes and fees and unnecessary rules and regulations.
But on the other side of the coin, these overage fees wouldn't fly. The utility would have to document their actual cost and at the prices these fees are at, they'd be shot down. They also wouldn't be allowed to give away certain services for free, unless those services were considered a public service.
At this point, the internet is an essential service, as essential as telephone service used to be. Only slightly less important than power/water/sewage/trash pickup. All 4 of which are natural monopolies as well...
Surely the Invisible Hand(TM) of the Free Market(C) in the only Free(tm) country in the world will solve this problem?
Libertarians don't keep their eyes open during events like this. They screw them shut and go "Oh it's still partially regulated and that's actually the problem". At face value I don't actually hate their philosophy, it's just the blanket denial of the way human beings actually operate. Which is weird because their argument against communism IS that it falls apart because human beings operate they way they do.
Sorry about my semi-off-topic rant, I'm just amazed at the things people say despite being shown stories like this.
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)
Given that these "tiny no-name" (and Frontier is anything but tiny) providers are all using the tier-1 providers, just as MVNOs are using Verizon and T-Mobile's networks, they're actually great proxies for how much maintaining that infrastructure actually costs. Think about it - they're renting time/space/bandwidth/whatever from the "big boys". Those "big boys" are charging the MVNOs/small providers market rates which give the "big boys" a profit for doing so. If the MVNOs' costs are dropping, when they're effectively actual cost + Verizon/T-Mobile's profit margin, then the can tell us lot about how much it actually costs. Or are you saying that the smaller guys are somehow paying less than it costs Verizon/T-Mobile to maintain it?
The US government has shoveled billions of dollars to AT&T, Time Warner, and Comcast for services which were never delivered and the government did nothing. The same government's courts also banned people from coming together and building municipal broadband services to compete with them. Yes, what a huge failure of the free market.
You only have "freedom" where there are "police" to control those trying to "restrict" your freedom or "abuse" you.
It is not the invisible hand of the free market that is ensuring your food has accurate use-by-dates, correct ingredients listed and accurate nutritional information.
Do you think the free market would have stopped using lead in paints and asbestos in construction all by itself?
Do you think the free market would abolish insider trading all by itself or do we need a policeman called the SEC with teeth to enforce the "rules"
It isn't a myth, people just didn't read their Adam Smith and they have no idea what it means. When does the "free market" arise? Does it arise when you take away all the rules? No, that is the Feudal system that Capitalism was designed to fix! Capitalism means that the government is looking over everybody's shoulders, and making sure that the playing field remains level, and constantly making adjustments to stop the tricks that the entrenched businesses will be trying. Then, with the neutral third party regulating the market to ensure fairness, things are predictable and that predictability allows capital to rule; people can decide based on math if they should invest or not. The whole point of Capitalism is protecting the new entrants into a market from the established companies, who will always be in a position to use collusion and other tricks to keep out new companies.
Currently, the established companies have tricked everybody, even small businesses wanting to compete with them, even the workers, into believing that "Capitalism" means just letting the entrenched interests set the rules. No, that was the problem that Capitalism can solve...
That they trick small business is sad, but predictable when none of the major (or minor!) political parties remember what Capitalism means. Many Democrats support true Capitalism, but they don't know what the word means and they think they're supporting a mixed system, and it leaves them unprepared to educate people. Most people who support what Adam Smith advocated believe themselves to be anti-Capitalism, at least partially! It is insane.