Why Internet Companies And Content Companies Should Oppose Broadband Caps

from the it's-going-to-stifle-innovation dept

Thu, Feb 5th 2009 1:09pm — Mike Masnick

I've been on record for quite some time as being opposed to metered broadband caps by ISPs. Plenty of others -- including some of the other Techdirt writers -- disagree, insisting that they will work fine allowing ISPs to "differentiate" service levels. I find that to be quite optimistic, as most of the examples we've seen so far have really only involved ISPs putting in ridiculously low caps in order to squeeze excess money out of people. And, before anyone says it, there's no evidence that ISPs "need" to cap usage to avoid a bandwidth crunch. Such things have been disproved time and time again.

But, my biggest reason for opposing broadband caps is that it will stifle online innovation in a variety of ways. First, bandwidth caps don't give ISPs much real incentive to invest in more bandwidth (contrary to their claims). That's because the more "congested" they can show their network is, the more they can charge more for basic usage. It sets up incentives for the ISPs to want more congestion, rather than less. Second, it will greatly limit the adoption of new and innovative services. Suddenly there's an additional "bandwidth" cost to testing out certain types of apps. This makes people less willing to even bother, and basically knocks out any (relatively) high bandwidth service before it can even get started.

For example, look at Larry Lessig's recent experience while traveling in New Zealand. He's apparently "subscribed" to the TV show House via iTunes. So, at the hotel in New Zealand, he paid for expensive broadband service that mentioned, in the fine print, that his access was limited to a grand total of 1 gig. He logged in and started checking email. In the background, iTunes started downloading the latest (high def) episode of House which itself ran 1.5 gigs. So half an hour later, not only is his broadband cut off, but a message pops up telling him he's being fined for "violating ethical rules." It's troubling enough that the provider somehow thinks it's an ethical violation -- but this shows how bandwidth caps can easily stifle perfectly legitimate activities and aren't (as many have implied) about "stopping pirates."

And, it's for this reason that many entertainment companies should also reconsider their support of caps. Many in the entertainment business have supported caps as one (of many) ways to combat "piracy." But now, as more and more legitimate, authorized content services are available online, these caps are going to do serious harm to their online business as well. Now, perhaps some of them (stupidly) think that this is okay, because it will just drive people back to the "old way" of doing things, that's unlikely to happen. It's just going to piss people off. Once you've shown them that they can do something, people don't tend to like having that option taken away from them.

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Filed Under: broadband, broadband caps, cable, innovation, lessig, tiered service

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Coral, 5 Feb 2009 @ 1:22pm

Let's be fair...
If Lessig was downloading House over a shared wireless (802.11a/b/g) connection, no matter what he paid, he was being a smidge unethical.

On all other points, I agree. I just wanted to throw that out there. I hate it when people download huge files over shared WiFi.
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Ima Fish, 5 Feb 2009 @ 1:27pm

"It's troubling enough that the provider somehow thinks it's an ethical violation -- but this shows how bandwidth caps can easily stifle perfectly legitimate activities and aren't (as many have implied) about "stopping pirates.""

Lessig paid for a service that gave him a grand total of 1 gig of internet access. He used more than what he paid for. Yep, that's an ethical violation.

Let's imagine going to the supermarket and buying 1 pound of grapes, and then deciding you want more, so you take them without paying. That's an ethical violation, right?

I'd love to be pro net neutrality, but as long as the ISP is clearly telling the customer what the limits and costs of the service are, I see nothing wrong with it putting limits on it.

So I do not think an ISP should be allowed to call a limited service "unlimited." If the plan Lessig paid for was "unlimited," well, he certainly has a point.

And I also do not think that an ISP should be allowed to advertise a price for a certain download speed, but then throttle some sites and activities (including bittorrent).

As long as we're getting what we paid for, I see no problem.
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Reason, 5 Feb 2009 @ 1:29pm

Re: Let's be fair...
Let's really be fair. You made something up, and then bitched about it. There is no mention of WiFi in the post -- just that it was a broadband connection.

Reading is fundamental. So is comprehension.
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Anonymous Coward, 5 Feb 2009 @ 1:30pm

Then perhaprs the local establishment should invest in more access points to reduce the load. After all, its only wireless up to the access point, unless of course they bridged everything. With all the coax cable that's been run throughout most hotels, shouldn't be to difficult to snake some cat 5 in their so every access point is wired to the switch/router. Since he paid for "expensive broadband service" maybe, just maybe, he should get what he paid for.
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Ima Fish, 5 Feb 2009 @ 1:32pm

Re: Let's be fair...
"no matter what he paid, he was being a smidge unethical."

What the frick? Are you saying it's unethical to use what you paid for?! That makes no fricken sense. If the hotel lacks sufficient bandwidth for all of its internet users, that's the hotel's ethical problem, not the customer's. If the hotel is selling a service it cannot offer, it's per se unethical because it's illegal.
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Jeff Rife, 5 Feb 2009 @ 1:54pm

Re:
Let's imagine going to the supermarket and buying 1 pound of grapes, and then deciding you want more, so you take them without paying. That's an ethical violation, right?

Your analogy is flawed.

The correct way to think of it is something like pre-paying $20 for gasoline and then noticing that the pump's display was broken and you couldn't see exactly how much you were dispensing. But, you expected that if you only paid for $20 worth, the pump would stop at that point. If you still wanted more, you could then pay for more.

What happened to Lessig is that the pump not only stopped, but it also called him "unethical" and charged him extra for having the audacity to want to dispense all $20 worth of gasoline that he had paid for.
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Anonymous Coward, 5 Feb 2009 @ 2:01pm

Re: Re: Let's be fair...
Ahhhh society turning more and more selfish.
Tell me where you live and by what road you drive to work.

I will then drive a HUGE FRIKING dumptruck very slowly down that road every time you are about to leave your house in the morning.

Now it is within my right to do so. But someone will eventually kill me for slowing them down.
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Matt, 5 Feb 2009 @ 2:02pm

Re: Let's be fair...
Unethical? Says who?

Who's to say that the place doesn't have an enormous bandwidth connection, or I don't know, more than 1 wireless router?

Gee, what an idea that $20 will cover. I'm sure if the hotel has enough bandwidth for everyone that short of the cap, they might be able to handle the bandwidth.

How so, you ask? Well maybe because they just did.
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Nick, 5 Feb 2009 @ 2:02pm

Re: Re: Let's be fair...
No, it's unethical to impact everyone else when you claim your right. But the ethics question falls on the ISP to answer to.

Now they change "what you pay for" and the problem is solved.
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Dave Lane, 5 Feb 2009 @ 2:08pm

It's not even that bad...
@Jeff - it's worth pointing out an even finer distinction... while there is a cost for getting each additional volume of a physical good like gasoline (in this case pumping it out of the ground, transporting it, refining it and transporting it some more), broadband has no incremental cost (perhaps a minuscule one of keeping the routers powered up) once the infrastructure is in place.

The cost of broadband is an arbitrary figure assigned by the infrastructure owner based on an amoritisation schedule and a sense of "what the market will bear"... and at the moment, that sense (in NZ - where I live - and Australia - where I encountered an equally bad hotel internet service (not Wifi)) is badly wrong... The problem is that hotel service providers tend to have a local monopoly...

the Oaks hotels in Melbourne and Adelaide charge AU $.55/minute for up to $25!! After buying that much at $.55 (about 50 minutes) you have open access for 24 contiguous hours... but they don't tell you on their documentation that they impose a 100MB download limit before reducing your transfer rate (and charging "overages" - while traveling on business in AU, I once got a bill for $75 for one day of light Internet use!) - I was able to get the overage charge dropped when I pointed out that they no-where alerted me to that policy, although I perish the thought of all the corporate execs who wack that amount on their platinum card company accounts without a second thought... can you say "un-eth-i-cal" or "high-way-robbery"?
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Anonymous Coward, 5 Feb 2009 @ 2:12pm

Re: It's not even that bad...
Hi Dave,

It is obvious you have never managed a layer 3 device.
So, in short, shut the fuck up and sit down.
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Dave Lane, 5 Feb 2009 @ 2:36pm

Heh
That last paragraph above (the Oaks hotels one) was supposed to have "rant" tags around it, which appeared in the preview but were stripped when the comment was submitted :P
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Michael Long, 5 Feb 2009 @ 2:36pm

Per byte
The amount of "to your door" bandwidth is finite at any point in time, and further is a shared resource pooled between you and your neighbors. It is not unlimited.

As such, I'm against caps but I am for charging on a "per byte" basis, just like people are charged for the amount of water or electricity used each month.

If someone wants to be a pig and run a torrent server 24/7/365 that's fine with me. Let him pay $500 a month for the privilege.
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Dave Lane, 5 Feb 2009 @ 2:40pm

Re: Re: It's not even that bad...
@anonymous coward

Huh? I would think that perhaps running an ISP gives me a bit of cred here, no? What do you know about my layer 3 experience anyway? Why not use your real name when you're slagging off people you don't know. Or maybe you're a bit too lame.
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laughter boy, 5 Feb 2009 @ 2:51pm

He has you on the run!
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Anonymous Coward, 5 Feb 2009 @ 2:56pm

Re: Let's be fair...
I assume you mean so because others on the network would experience a slowdown.

Throttling bandwidth at the router level shouldn't be that hard.
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Anonymous Coward, 5 Feb 2009 @ 2:58pm

Re:
Let's imagine going to the supermarket and buying 1 pound of grapes, and then deciding you want more, so you take them without paying. That's an ethical violation, right?

What's unethical is comparing Lessig going over a limit he probably wasn't even aware of to shoplifting.
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Anonymous Coward, 5 Feb 2009 @ 2:59pm

Re: Re: Re: It's not even that bad...
Dave,

I said "sit down".
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nasch, 5 Feb 2009 @ 3:04pm

Competition!
I would have no problem with broadband caps (or per-MB pricing) if there were ubiquitous and strong competition in the broadband market. As it is though, I agree with Mike.
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Anonymous Coward, 5 Feb 2009 @ 3:04pm

Re: Re:
Let's imagine going to the supermarket and buying 1 pound of grapes, and then deciding you want more, so you take them without paying. That's an ethical violation, right?

What's unethical is comparing Lessig going over a limit he probably wasn't even aware of to shoplifting. You should be fined and kicked off the net.
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Dave Lane, 5 Feb 2009 @ 3:07pm

Re: Re: Re: Re: It's not even that bad...
Dude, the best way to challenge someone's views or change someone's mind (and get them to shut up) in a forum like this is to present them with irrefutable evidence supporting a position contrary to their stated position. Unsupportable ad hominem attacks just make you look like an idiot.

All you've done so far is to demonstrate you're lack of anything useful to say. What, do you work for the Rivera ISP that supplies the Oaks Hotels with "ISP services" at criminal prices, or something?

I encourage you to use your name and provide a coherent argument contrary to mine or STFU.
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ur daddy cwrd, 5 Feb 2009 @ 3:10pm

login please
hey muthafuka coward go n eat ur mom's pu$sy! Get lost a$$hole if u cant login.
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Plac Ebo, 5 Feb 2009 @ 3:11pm

With internet access we are seldom speaking of a competitive market. The consumer is lucky to have two providers to choose from. Seriously, how hard are these companies competing? You can see a similar situation with cell phones. For example, rates for text messaging are completely out of whack with their actual cost to the phone companies. If there was real competition the rates would drop closer to cost. The same thing is happening with internet access. Monopoly conditions are no more efficient than government regulated ones for the consumer. Usually they are worse.
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manielse, 5 Feb 2009 @ 4:11pm

Let's be "really fair".
I have no issue with a Cap if it is clear, the usage can be monitored, you get what you pay for and you have the ability to pay more when you go over the limit (ie. it doesn't just stop).

Here's what I feel is fair for both parties:
There are tiers of service (speed, max data used and maybe even an 'unthrottled speed' plan)
The consumer choices they best plan for them
The consumer can monitor monthly usage
(Now here is where most or all ISPs will screw us)
The consumer's unused data that they 'paid for' will roll over to the next month. (Or simply just charge by the MB like electricity)
The consumer should also get 'credits' for when SLAs of advertised speeds fall under the next lower tier.

This would hold the ISPs accountable which is the biggest issue. They also need to be competitively priced for the speed you are getting (compared to the rest of the world).
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RD, 5 Feb 2009 @ 4:34pm

Carrot and Stick
Ok so this is a gem from Charter:

"Echoing Comcast's repeated claims, Charter says that "More than 99 per cent of current Charter Internet customers use less bandwidth than [its new cap] allows and therefore will not need to change their surfing habits in any manner."

So, here we have the cableco saying "There is no problem with us doing this, as it only affects 1% of our customers. 99% of customers wont be affected by the caps"

What they ARENT telling you is, "Our network is so poorly built that a mere 1% of customers is able to impact our network so much that we have to create limits instead of upgrading the infrastructure and capacity of our network."

Now, its either that, or a naked grab for cash, as the impact isnt as much as its being made out to be, and is only being used to squeeze more out of the current network without having to, you know, INNOVATE OR IMPROVE the service. Monopolies allow you to sit on your laurels and do the least to improve what you offer.

Which do YOU think it is? (well, its probably a little of both, but occams razor would point to 'greed')
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Derek Kerton (profile), 5 Feb 2009 @ 5:09pm

I Disagree With Mike - Pay To Play
I'm one of the Techdirt writers who disagrees with Mike.

Reason #1: Yes, having an incremental cost for Internet traffic will have a chilling effect on innovation on apps that have high bandwidth requirements. But that is absolutely correct. Simple economics suggests that activities that consume greater resources should have higher costs, and are less preferable to activities that use fewer resources. That is true if the resource is limited, and with bandwidth, it is. There is a finite amount at any given time, which all users of the network must share.

The chilling effect of pay-per-use on innovation is much like the chilling effect on innovation in Hummer design in the auto industry. The Hummer uses more of the finite resource, therefore costs more, therefore is less economically desirable compared to, say, a Civic. Thus, innovation should be focused on the Civic side of the consumption scale, not the Hummer side. Of if someone invents a Hummer that performs well but uses little gas, it would be a runaway best-seller. I would say that allocating appropriate costs results in THE BEST kind of innovation. Innovation, as Mike wants to see it, would innovate a bunch of bandwidth hogging apps that ignore their collective impact - is that what we want?

Reason 2: Ignorance is no excuse. When you connect your laptop somewhere, your Windows, anti-virus, logitech camera software, Google updater, etc. all happily connect and download updates and crap from their servers. In Lessig's case, his iTunes acted the same way. The mere fact that he was ignorant of the impact of his PC on that network is no excuse for his responsibility for it. He, in turn, should hold the makers of his software accountable for their self-serving wanton Internet use.

I have to run a specially configured firewall when I connect using AT&T 3G, in order to dedicate my limited HSDPA speed to the task I actually am trying to do, instead of the Windows update that MSFT seems to think appropriate. But I have to share that 3G network with guys like Lessig (not to single him out, it's actually almost everyone else) who just plug in and forget about it.

With caps, per-use fees, tiers of service, instead of "innovating" bandwidth hogging apps, companies will innovate bandwidth-respecting apps. Respecting limited resources...it's telecom environmentalism. They will innovate things that work almost as well as their bandwidth hogs, but sip data instead of leaving the tap running.

Others will innovate, too. Firewall companies will innovate "limited bandwidth" modes, where they will block thirsty apps under your guidance. In the dial-up days, apps were built to act differently under LAN or dial-up (ex: Outlook). Doing so smartly, and intelligently, would be innovation, indeed. iTunes, and apps like Netflix, might be improved to take advantage of less congestion at night to download "House", and carriers could offer discounts to people who defer their traffic to the wee hours.

Reason 3: Caps and Tiers Remain Net Neutral. Neutrality is lost when a carrier tells you which KIND of traffic you can send, or from where, or to where, or which service provider. The threat of this is that they will prefer their own, or their partner's services over any competing services. But caps and tiers don't discriminate on type or destination, they only discriminate on quantity. Back to the Hummer, it's like a gas pump. It doesn't discriminate between a Prius and a Hummer, but you're going to need to pay more to fill the Hummer.

In Lessig's case, the hotel's "unethical" message was a step too far, but shutting him off is fair (although it would have been smarter to up-sell him another Gig). Tough beans, Larry, you are responsible for shipping your HD copy of House in an inefficient unicast stream from the USA to NZ. There are probably 30+ channels of efficient broadcast content on the TV in your hotel room. I use Sling to do the same thing, but I check the terms of my deal with the hotel to make sure I can pull it off. I agree that $25 for 1GB is too expensive, but that is not the issue at hand.
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RD, 5 Feb 2009 @ 5:30pm

Another reason this wont work
Streaming (legit) services. I have Netflix and a 360. I work at home a lot and stream tv and movies all day while I work. 40gb would be gone like THAT. So if this takes hold industrywide, you can just kiss goodbye any innovative services that are like this in the future. Stream games? Linux distros? Hulu? Youtube? Forget it, you get to watch 15 things a month and thats it. How long will it be before these services see a severe drop in patronage and scream bloody murder about the ISP's restricting their services?
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Amazing Isnt It, 5 Feb 2009 @ 6:13pm

Watch a live video, share your PC with CNN
If the ISP that connects you to the internet has imposed caps, then you had better read this:

http://windowssecrets.com/2009/02/05/01-Watch-a-live-video-share-your-PC-with-CNN/?n=story1
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Allen (profile), 5 Feb 2009 @ 6:25pm

A hotel with a limited extortionate internet offering. That never happens!

OK, I'm being sarcastic, but except as some kind of extreme outlying case, a hotel is not the place to go looking for the real impact of metered (and/or capped) access.

Mind you the irony of a professor of law being caught out by not understanding a contract...
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Anonymous Coward, 5 Feb 2009 @ 7:38pm

Re: Re: Re: Re: Re: It's not even that bad...
I encourage you to use your name and provide a coherent argument contrary to mine or STFU.

Prove your name is really Dave Lane.
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Anonymous Coward, 5 Feb 2009 @ 8:48pm

Re:
Mind you the irony of a professor of law being caught out by not understanding a contract...

I think he was unaware of the clause, not incapable of understanding it.
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Dave Lane, 6 Feb 2009 @ 12:47am

Re: Re: Re: Re: Re: Re: It's not even that bad...
I've got to tell you, mate, I'm embarrassed for you. Anybody with half a brain would've followed the link to my website (which, coincidently, *is* my name), conveniently positioned at the top of each of my comments, and looked at it. Sorry to get all ad hominem on your ass, Coward, but you're a pillock.
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NotDunRoamin, 6 Feb 2009 @ 2:53am

NZ Internet Access
I've travelled to around 25 countries and found NZ to be one of the most difficult, developed countries in which to find accomodation with a decent Internet connection.

Either the hotel/motel/b&b didn't have Internet access or it was ridiculously slow and expensive.

Google maps and skype were impossible to use unless you went to an Internet cafe.
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Anon (profile), 6 Feb 2009 @ 4:05am

Welcome to Internet in Australia/NZ
I live in Australia. I have had access to what passes for broadband here for probably more then half of my relatively short life (I'm 26). That includes back in the good old days of 100MB (thats megabytes) of broadband access a month, with huge excess fees slapped onto that if you went over. Now, in those days broadband was cutting edge, most people were still on dialup, and the situation has improved greatly since then. These days, when I look at the usage figures for my month, theres rarely a day that is under 100MB, from just general web browsing of myself and my partner. I find the argument that someone using the speed/allotment they bought as being greedy a weird one. If I purchase the ability to download 40GB a month at 1500kbps (which I do) then I would expect to do that whenever I please. Thats not greedy. What would be greedy would be to imply that other peoples usage of the connection to my local exchange was leading me to not get the full speed from my connection. If an ISP is going to say "we will give you X speed" then they should be responsible to ensure that everyone connected should be able to get that speed at all times. If your internet speed drops at 6pm every night because thats when everyone in your neighbourhood gets home and checks their email, thats not everyone elses fault, thats your ISPs fault, and they should be brought to task for it. If you lost power at sundown every day because thats when everyone turned their lights on, you wouldn't be going around demanding that people stop turning their lights on, you'd be ringing the power company and screaming at them. (Recent weather in Melbourne doesn't count, sorry :) However all this talk about bandwidth speeds is really quite off topic, as thats not even what this article was about.
I'm not a fan of broadband caps, and even at one point paid for a hugely expensive unlimited plan, that unlike many "unlimited" plan truely had no limits placed on it, with the exception of the speed limit but that was a factor of the technology available in this country at the time to consumers. To label a cap on consumption "ethical" however is a stretch. If you're in a situation where you are rationing food to people in order to ensure everyones survival, thats an ethical cap on consumption. If you're a business who sets an arbitrary limit on what your customers can download based on your expenses to supply said downloads, thats completely within your rights, but it is by no means ethical. To cut someone off when they reach the limit stated in the contract, thats fair enough, but to then ALSO fine them, that smells of double dipping to me. To use the grape example above, thats like walking into the super market, paying for 1kg of grapes, being given a 2kg bag, being watched while you put grapes into the bag on a scale that you can't see and then being told once you went over 1kg that you were stealing. To give Larry 1gb (as per the contract) and then charge him extra for having the audacity to use that 1gb is just staggering.
Ugh enough ranting.

P.S. Pro-Tip: The hotel will have some form of proxy running that is keeping logs (and probably cutting people off and sending nasty emails) on which room is using what ammount of internet, and that proxy should be responsible for limiting bandwidth, when required, so that nobody is experiencing any worse internet then anyone else. I would guess that the hotel was using wired internet, as although wireless is less of a hassle and cheaper to install in terms of cabling an existing hotel, we here down under and our sheep shagging cousins get all the worst technology can offer.
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Twinrova, 6 Feb 2009 @ 4:28am

Re: I Disagree With Mike - Pay To Play
"Reason 1: ...Simple economics suggests that activities that consume greater resources should have higher costs"
Wrong. Simple economics states that, in time, greater consumption prices will fall as competitors offer more for less. This is evident in every aspect of the economic world. View the latest "unlimited" data plans for $99/year by wireless providers, then see how even that is being challenged.

Your argument is flawed on so many levels, I feel I should insult you because of it. But, I'll refrain. The biggest issue you're overlooking is that every ISP is looking to implement caps, not just a few. This is SERIOUSLY wrong in terms of "competition" as consumers will have no option to choose otherwise.

You have given no reason why a consumer who enjoys YouTube should have to pay more for downloading videos just because you feel they're using more bandwidth when the very reason why they purchased the plan was to watch YouTube.

Reason 1 fails.

"Reason 2: Ignorance is no excuse."
Wow, you apparently don't understand the majority of internet users, do you? Telling these people ignorance is no excuse when their service is cut off without warning will only show how flawed the business decision is.

People are ignorant when it comes to the internet. They simply just want to download email or visit a website. They have no idea how much data is being transferred, and quite frankly, they shouldn't have to worry about it.

Capping broadband only proves that providers are out for more income, not service enhancements for customers. These ISPs telling people "you're using too much (compared to everyone else)" is wrong.

I don't download much. Much of my "broadband" is wasted because I'm not on the internet much. Explain to all these ignorant people why THEIR accounts (because they watch YouTube) is being compared to mine to warrant the cap.

In fact, explain it to all of us. This, I'd love to read.

Reason 2 has also failed.

"Reason 3: ...It doesn't discriminate between a Prius and a Hummer, but you're going to need to pay more to fill the Hummer."
Your gas analogy is so far off, it's pathetic. People who choose a Hummer over the Civic choose to do so because the price of gas is the same. While it may cost more to fill up the Hummer, it doesn't affect the price of gas. Demand affects the price of oil, which is used in more products than gasoline.

Your analogy would be best served if, one day you're filling your Hummer, the gas station tells you the cost of YOUR gas is now limited, and you're going to pay more for it because Civic owners don't use as much.

The broadband world is quite fine. What's ignorant is ISPs telling people there's a "limit" and adjustments have to be made. Ignorance can also be defined by those who actually believe statements like this.

Broadband has given web developers a tool to make creative sites, which do take up resources. However, these resources are NEGLIGIBLE when compared to the amount of spam sent to email inboxes every hour. If ISPs are so concerned with broadband usage, maybe they should all start to invest in ways in combating spam, not taking it out on their ignorant customers who just got cut off because this spam just pushed them past their limit.

You, sir, need to educate yourself on the workings of the internet. You need to educate how the broadband world works, the costs involved, and how it relates to the economic growth of every country of the world.

During this education, you'll quickly see just how consumers are being fleeced today, not only with charges, but now with these caps ISPs are enforcing.

Until you do this, further remarks from you will be taken as someone who is completely ignorant.

Thus, Reason 3 has just crashed and burned with the other two reasons.

Thanks for reading and have a great day.
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Anonymous Coward, 6 Feb 2009 @ 6:58am

Re: Re: Re: Re: Re: Re: Re: It's not even that bad...
Have a cookie
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Gene Cavanaugh, 6 Feb 2009 @ 10:19am

Bandwidth caps
I basically agree, but once again, "pegging" on an extreme position is not helpful.
I have Google WiFi - free, where I live. At this time they have a limited amount of bandwidth, and they have a very few users who tend to use all the bandwidth they can - in some cases, it sounds like people (Teens? Who knows?) who want "bragging rights" on bringing the network to its knees. Google has imposed some (very reasonable) "network sharing" rules to prevent most users from losing their connection altogether, and is also working to increase bandwidth. Good!
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Dan, 6 Feb 2009 @ 2:16pm

The tiered bandwidth paradox
This is a bit odd. Did anyone else notice that with Charter's new cap scheme, the only way to do away with getting a cap altogether is to buy their premium level of service? So, instead of a guy pegging a 3MB connection for $45 a month, he's now forced(if he want's to keep things running at full capacity) to buy a 60MB connection at $140 a month. Yeah, Charter gets $95 more a month, but now instead of pegging a 3MB pipe up to a max of 100GB a month, he's now pegging a 60MB connection with NO limit. If their reasoning for the caps in the first place is really to "assure customer satisfaction" for the other poor schleps on the street, who they claim are going to get get impacted by him lighting up his old 3MB connection, how does that logically lead to them forcing him onto a limitless 60MB connection?! And when he's got all of that extra bandwidth, rest assured he will find ways to peg it at the new level.

Don't get me wrong, I'm glad that they are giving an out on the caps (even if it's really expensive), but it's hard to follow their reasoning here, if it is what they say it is.
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Derek Kerton (profile), 6 Feb 2009 @ 5:26pm

Answer To #38
RE: comment 38

Well, you're right that the premium level subscriber can now have a much bigger impact on their network, but the economics are working. You see, that sub, as you noted, is now paying in an additional $95 a month, which can be allocated to expanding capacity to serve customers with high demand.

This is how the market should work. Grandmas with low demand should pay less than Bittorrent junkies. The Bittorrent junkies can choose to curtail their consumption slightly, or to pay more. If they choose to pay more, they can swap files all day long, and will be funding some fiber upgrades as they go. All's fair.

I'm not saying Cox's numbers are right, and their caps seem too low to me. But the basic concept of charging more for more use is fair, and the ISPs know when to expand capacity because the market has indicated they are willing to pay to do so.
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Derek Kerton (profile), 6 Feb 2009 @ 5:51pm

Answers For Twinrova, Comment #35
Dear kind sir,

RE your comment #35 on my comment #26

I would like to extend my gratitude to you for your charitable treatment of me, as expressed by your writing: "Your argument is flawed on so many levels, I feel I should insult you because of it. But, I'll refrain."

Your soft treatment is duly noted, especially when, paragraphs later, you added:

- you apparently don't understand the majority of Internet users, do you
- You, sir, need to educate yourself on the workings of the internet
- Your gas analogy is so far off, it's pathetic
- further remarks from you will be taken as someone who is completely ignorant.

I can't imagine how devastated my fragile ego may have been if you had removed the kid gloves!

However, I wanted desperately to pwn you and reply to your comment, but frankly, your arguments and wording are so disjointed, I couldn't really understand what you were getting at most of the time. I see that you disagree with me, just that much was clear.

The above criticism applies to most of your comment, so I'll only address your very first sentence:
"Wrong. Simple economics states that, in time, greater consumption prices will fall as competitors offer more for less. This is evident in every aspect of the economic world."
Oh, so you mean like the price of oil? Aside from using difficult to comprehend wording, you are inventing economic theory that is just plain wrong. You would have been mostly wrong, but you used the word "every" which makes your claim categorically incorrect.

By the way, you and I DO agree on one thing: There is by no means enough competition in the broadband market. I believe in caps and tiers of service, but I'd also like to see a lot more competition.

I've read your comments before, and often they are better constructed. Did I catch you at a bad time? For now, I don't have the time to fix your comment into a more intelligble form, then respond to it. With that, I'll close with thanks for keeping it professional, and not resorting to insults.

regards,
Derek.
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Philip Jackson, 9 Feb 2009 @ 11:44am

Using caps to save cable
The Internet is cable's worst nightmare - imagine if everyone got their content al la carte off the Internet rather than paying for all those unwatched channels. Cable being a part of a telecommunications duopoly in most places (duopoly is monopoly with shared grip - ) having the same lack of competition, same stake in control, and, in this case, the same conflict of interest. If a movie takes 3 gig to download and costs $3.99 to watch on pay-per-view, it doesn't take much to see that a very few movies or TV shows could breach the cap - making it more expensive to use the Internet rather than cable TV. Caps also reduce incentives to support Internet content development.

Congress should act. Somehow.

Thanks-

Phil
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Haggie, 9 Feb 2009 @ 12:15pm

Internet caps are an extension of the monopoly that most ISPs enjoy and should be banned, if not by the FCC, by the local governments that charter the monopolies.
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Nick, 9 Feb 2009 @ 5:12pm

Usage Caps and the DLC Model
http://www.openmarket.org/2009/02/09/usage-caps-and-the-dlc-model/
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Derek Kerton (profile), 6 Dec 2011 @ 9:46am

Re: Re: I Disagree With Mike - Pay To Play
You're a bad debater, and have not refuted any of my points, though you are quite certain that you have. It's two years on, so I'll just refute two of your opening arguments:

"Simple economics states that, in time, greater consumption prices will fall as competitors offer more for less"

You weren't an econ major, like I was, were you? What you have written there is wrong (also grammatically). Sure, there are volume discounts often offered for higher rates of consumption. However, what you wrote above is the opposite of the fundamental law of economics: the law of supply and demand. I had written that using more resources means there should be more cost. That's what econ is: the sensible allocation of scarce resources.

"View the latest "unlimited" data plans for $99/year by wireless providers, then see how even that is being challenged."

Well, it's 2011 now. And "unlimited" has been reduced to just Sprint. I don't see "how even that is being challenged".
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Phillip Anderson, 6 Feb 2012 @ 7:42pm

Caps my Assets! It's the greedy government officials!
I was told today by a higher ranking AT&T official that the US Government is forcing them to create caps of 5 gigs on their wireless broadband accounts. It isn't the phone companies or anyone else, it's greedy politicians with their pockets open fed by things like campaign contributions or as we used to call them "Bribes", what's next? 5 gallons of milk per family? Limit us to 5 pairs of pants per month at one large price? Are they serious? Limiting our freedom of speach now to make a few people rich? My Assets!! Vote me in as president and I will take us out of this semi communist state we are in, and even pay off the deficit completely by cancelling any contract with the national reserve as Andrew Jackson did and pay off our national debt, stop borrowing money we don't need from China and bring back our jobs from other countries where our so called American companies have been hiring below average workers for pennies on the dollar of what we used to make for the same jobs. Seriously, stop taking oil from other countries and pump our own oil and stop making those few politicians and elite rich by using bribes as an incentive and put all those idiots in jail who shammed the American people out of our homes by shorting their own stocks after they purposely caused the markets to go up after they purchased their own stocks, then reaped all the rewards after they caused the housing markets to crash and then the same people who dictate home pricing want to take every last penney by keeping property prices down so they can buy it all up again for next to nothing and get ready to do it all again after they dictate the same prices at five times the price it is now and short their own stocks again to reap the rewards after they crash their own markets again, and then even take bonuses by a President who just gladley haned it all over. Give me a break, we need to go back to having our rights back, stop the nonsense of talk of war to make a few who make parts for the war machine rich again and lets start living like Americans should for a change!!! My God we are not cattle, we are humans who can't continue to work ourselves into an early grave for a few rich who make all the decisions. Seriously we can do it with a simple vote by not voting for the same old president over and over appointed by the rich through the media, considering the direct corrilation between how much media in how much media is afforded each who runs for president and who wins. This is a known fact and is even taught in some colleges. Seriously lets take our government back!!!!
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