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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."
Your economics term of the day is rent seeking.
Government regulators used to claim that there were things called "natural monopolies" to justify their stake to power, saying that competition was impossible, for things like telephone wires.
Now that 80% of the population has switched away from PSTN (many to cable providers) the regulators are looking for another hook to hang their hat on. Watch your back - the FCC is starting to dig in on regulating everything-Internet. Not because there's a need, but because they can't possibly admit that their job is obsolete.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
You mean Verizon, Comcast, AT&T, Sprint, etc.?
Comcast, who built the Cable network? Comcast who got into a ridiculous legal battle with Level-3 because Level-3 wanted to peer with Comcast to route traffic to parts of the Interent which required Level-3 to cross Comcast's backbone, but Comcast tried (successfully) to make Level-3 pay for peering? Comcast, who supplies Comcast for Business, placing Internet Web sites for independent businesses *directly* on Comcast's network, which is nation-wide, run on Comcast's own equipment, across Comcast's own fiber, and addressed with public IPs, meaning many Web sites simply aren't reachable without going directly through Comcast?
Verizon, AT&T, and Sprint, who built the phone network? You know, the networks which, if they go down, break your ability to reach random Web sites even though you're on some other network, simply because their network is between your ISP and the Web host's ISP?
These are the people Amazon, Netflix, Pandora, Google, Facebook, and Akamai directly establish peering with. These are the people EC2 and Microsoft Azure hook up to so their data centers (you know, S3 and Microsoft Azure Cloud) don't go down off the entire Internet just because Comcast or Verizon or AT&T unplugged the wrong router today.
The people yammering about how much it costs to supply bandwidth are last-mile providers who lease their data lines to the Internet from Comcast, Verizon, AT&T, Sprint, Level 3, XO, CenturyLink, Cox, or others.
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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.
Which is why I've been saying that what we want is a "fair market" instead of a "free market".
To (roughly) continue with the analogy though, will we get to a point where companies (ahem, Microsoft...) can be held liable for the bandwidth usage of something not explicitly requested by the user?
I know that if I had, say, a "smart bathtub" that decided to go rogue (due to no fault of my own) and waste thousands of gallons of water, I would certainly want the bathtub manufacturer to be held liable for the water usage charge. Will a similar thing end up happening with broadband?