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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.
When you're lying to people, make sure to give a wink and a nod.
Cable expenditures are going nowhere but up! *wink* The profit generation from such actions only hurts our bottom line *nod*. The only way we can remain competitive is to raise bandwidth caps to protect the precious little capacity our networks have! *wink* *nod* *wink* *nod* *wink* *nod*
Bye!
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.
So we have these tiny, no-name providers dangled off Verizon, Comcast, and Level 3 talking about the business internals of running Verizon, Comcast, and Level 3?
Maybe next MVNOs who use Verizon and T-Mobile's networks instead of building their own capacity can tell us how very little it costs to maintain national cell networks and admit that Verizon and T-Mobile are just overcharging.
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For comparison, the UK has a system whereby the infrastructure is owned by a single company - in our case Openreach, which is a division of British Telecom (who used to be the nationalised public telecoms company, but are a private company for a couple of decades now). Openreach are highly regulated and must offer access to the infrastructure to any company that wants it at regulated prices.
Then, any old private company can offer internet access on this public infrastructure without having to provide their own cables, They are free to do so if they want - I think Sky and Virgin do their own infrastructure in part.
This seems to allow access enough to allow lots of competition at both a national and local level - I get my internet from a local company who operate in my city only (it's a lot more expensive, but they have better service and no caps and allow me to run servers on my DSL line) and it goes down exactly the same cables as if I bought it from Sky or BT.
Amusing that today's headline is liars accusing other liars of being liars.
These small cable operators don't build the back-end infrastructure of the Internet. They're last-mile carriers. They're like MVNOs who only piggy back on providers, and they're talking about what it's like to build and maintain the Internet backbone as if they actually do that.
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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)
... spent on all the equipment and staff directed to data measurement and billing that tracks usage and imposes the caps, that recoups the costs spent on... wait.
Take it easy, Charlie, I've got an Angle...
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.
Obviously the fact that price gouging aka "usage based pricing" exists is a perfect example of why the government regulators need to step in and regulate. The industry will not effectively regulate its-self. The fact that the government turns a blind eye to stuff like this is merely an indication that regulators (like all government types) are susceptible to corruption. Unfortunately, corruption will exist as long as people of any sort are part of the equation. I, for one, welcome our computerized government overlords.
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 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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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"
Free market doesn't allow for state sponsored monopolies/duopolies.
Sorry, teleporters just kill you and then make a copy. A perfect, soul-less copy.
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.
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".
LOL now I know you are trolling. You provided that second link with no context whatsoever as to what it is.
You were commenting on the complexity of implementing networks; I showed a distributed network.
the cost of the uplink was the minority
The uplink to what?
The answer: the uplink to the big, complex, EXPENSIVE, distributed back-end network run by the major Tier-1 providers.
You're trying to claim this is just an uplink, a cable you plug into somewhere. What it is is thousands of miles of fiber run between regions, into regional hubs which distribute out to other regional hubs, which talk to each other so a break in connection between Region 1 Hub 13 and Region 1 Central can route to Region 1 Central via Region 1 Hub 7 (and so Region 1 Central has 6 paths to Region 2, or Region 3, or so forth). The last mile is the last mile of fiber run to a little cable on a pole trailing all the way to a little box in a closet at a hub data center, which is part of a sizable data center, which has thousands of miles of fiber uplinking it to other, bigger, more-complex data centers.
The problem is your experience is sitting on the last mile. You're looking down at the run to the end user and saying, "Damn, that's a lot more than the three-foot run to the uplink behind me. It's way expensive. 99% of our cost goes to that last mile." Then you're turning around, looking at the uplink, and going, "That's so cheap. Upstream providers have so little to do." You aren't looking at the upstream provider's network, which is a little three-foot cable running down to you and, on the other end, a massive, distributed, highly-complex network of large data centers spanning the entire fucking country.
How much do you think it costs to expand that back-end with new fiber, new equipment, and new capacity when demand goes up?
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Except crony capitalism is rampant, and so it is not a truly free market.
that's irrelevant because the concept of a "free market" requires perfect information which is impossible.
Anons need not reply. Questions end with a question mark.
You keep trying to imagine what I am thinking and create arguments based on what you think I am thinking but you are getting it horribly wrong.
In both cases the equipment is the cheaper side of the equation. Most of the expense is in the actual running of the cables, the cost of paying for wherever municipal fees/rental for the space the cables take in the ground, and repairing faults as they happen. The difference is that we can (with some equipment on the back end) plug multiple users into the same uplink to the backbone and aggregate the cost.
Again, our uplink provider is not selling us anything below cost and I never saw any argument in the original article about forcing the backbones to lower cost, only that they couldn't justify charging usage based pricing to their own customers.
Indeed. The usual free-market fanatics routinely keep quite about the little problem that a corporate stranglehold can be even worse for market freedom than government control.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.