As Expected, Bill Introduced To Outlaw Tiered Bandwidth Pricing
from the this-won't-go-far dept
As was widely expected, Rep. Eric Massa has introduced a bill that would outlaw metered billing and create a bunch of other regulatory hoops ISPs need to jump through on pricing plans. We're no fans of metered broadband by any stretch of the imagination. It stifles innovation and limits the usefulness of the internet. Contrary to what some broadband providers will claim, it's not at all necessary and has nothing to do with preventing the network from being overrun or to stop part-time users from "subsidizing" everyone else. The Broadband Reports link above walks through how silly each of those arguments are. It also explains why this is a pure money grab. Flat-rate pricing has been quite profitable for the providers, but they want more. Note that nowhere in these usage plans do they talk about cheaper tiers. Beyond just being about a straight money grab, part of the desire is to use this to reduce competition for online video by making it more expensive for anyone other than the ISP to deliver video services.That said... this bill seems laughable and is unlikely to go anywhere. The real issue here (as it has been all along) is the lack of meaningful competition in the broadband space. Get meaningful competition into the market, and this whole issue goes away. But that's not what Massa's bill does. It just adds regulatory burdens to ISPs without doing much to get at the root of the issue.
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Filed Under: broadband, broadband caps, eric massa, metered broadband
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Look, I submitted the "Save yoUr Money More Interest Termination act" (SUMMIT act). I am good, I have your interests at heart.
There is more chance that Carlo actually reads and answers one of this posts than this thing passing - and Carlo has never done that before.
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Walled Garden worked well for AOL
~ or ~
Present day ISPs think they have a better recipe
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That kind of competition is a pipe dream. I challenge Mike to come up with one viable competition scenario that didn't require companies sharing the cable/telco infrastructure. Even Mike would have to admit, that would require government intervention. They won't give up their pipes to anybody [in any competitive way] without being forced to. So, you're trading this legislation for some other. It's six of one, half dozen of another.
With the ISP's current position, they will try and milk as much money as they can unless the government intervenes.
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One of the things that makes the internet so resilient is that there are many providers, many ways to get a connection, many ways to get a route, and many ways to route around trouble. Let the government run it, and there would be a single backbone from one side of the US to the other and that would be it (remember MAE East and MAE West?). The current situation is better than it was 10 years ago.
For end user ISPs, the problem is cost of bandwidth versus usage. The connectivity providers sell it by the size of pipe, so pricing to the end user is in part dictated by this. Excessive usage means they need to buy more pipe, and more pipe costs money.
You can't have super low prices and super high bandwidth at the same time, at least not naturally.
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Reading comps not your strong suit, I guess?
I did not say that the infrastructure should be nationalized. I just explained what a natural monopoly was and why, because of that, it made sense not to nationalize the infrastructure, but to look at ways to allow competition on the infrastructure layer. As I suggest in my other comment above, there are plenty of ways to do that that aren't "nationalizing." But why bother with details.
One of the things that makes the internet so resilient is that there are many providers, many ways to get a connection, many ways to get a route, and many ways to route around trouble. Let the government run it, and there would be a single backbone from one side of the US to the other and that would be it (remember MAE East and MAE West?). The current situation is better than it was 10 years ago.
Strawman alert! No one said create a single system and let the gov't run it. Why make that up?
For end user ISPs, the problem is cost of bandwidth versus usage. The connectivity providers sell it by the size of pipe, so pricing to the end user is in part dictated by this. Excessive usage means they need to buy more pipe, and more pipe costs money.
This is simply not supported by the actual numbers. ISPs are raking in the cash with the current system, and bandwidth usage growth is slowing dramatically.
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Yeah, because one (maybe two) providers should be enough for anyone. And if that isn't enough for you, then you whiners are all welcome to move to another country. [/sarcasm]
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Oops, I think you meant "You can't have super low bandwidth and super high prices at the same time, at least not naturally."
No, not naturally. That usually requires a market distorted by things like unregulated gov't granted monopolies. See the US for a good example of that in action.
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I never said without gov't intervention. I said the exact opposite. I said that *if* the gov't is going to get involved, it should only be to increase competition in an inefficient market.
This is an inefficient market *due* to the gov't subsidies and rights of way. So, yes, since this is a natural monopoly, it makes sense for the gov't to get involved and require line sharing in some way or another (there are good questions about exactly how that works, but there are some good examples to learn from -- including the "homes with tails" option and the idea of a local community owning its own infrastructure (not the gov't).
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Obama Will
Dan, I am confused here.
While I agree that "getting meaningful competition into the market and this whole issue goes away", it's not a good argument against this.
Oh and the saying is "six to one, half a dozen to the other."
Once the words Internet and Crisis come out of Obama's mouth, all of us well need to look out.
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Any facts ?
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I took Mike's argument to mean that real competition is possible without government getting involved. I disagree. I think we are past that point, regardless of how bad some well-intentioned legislation can be.
I do agree with CleverName that the government should have some say after giving all those concessions to companies that haven't delivered what they promised and pocketed the money instead.
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Yeah, because the Bush administration was all about keeping gov't snoops out of "the communications network". For example, AT&T and the Bush admin would have never gotten together to conduct massive warrantless electronic eavesdropping on "the communications network". Oh, wait...
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In an ideal world
So, since this is not an ideal world, I think this bill at least puts a patch on the problem to protect consumers from their local collusive duopolies. I am definitely for it.
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They're not saying 'since you use more you must pay more' which is discriminatory.
I actually would support metered internet as long as it's truly neutral.
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poop
Yeah I got a 20g connects.
With qwests workhorse dsl lines, rumors of 40g in a couple few, and triple plays on the rise with our providers, its anyones guess where we are headed in the next 5 years.
When asked what they would do with all that large bandwidth, many people said they have NO idea.
More of the same.
How bout a bill that makes it CHEAPER!!!
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ISPs Shouldn't Be Able To Offer Free Transport To Their Content
This may seem anti-consumer, but actually it is not. Mike is correct to point out that ISPs will use caps to make competing video services unattractive compared to their own. Their is a clear conflict of interest in a company that both operates the only transport AND offers a competitive content service. If carriers were required to compete for content on a even playing field, the content market would be competitive, not constricted. This would lead to lower prices, more selection for content.
There is ample precedent. Way back, a friend worked for Western Gas in Toronto. Her company owned the Trans Canada Pipeline, but they were forced to separate the two businesses - one that transported the gas, and one that sold the gas to municipalities and utilities. As a common carrier, the pipeline company was required to charge the same rates to Western Gas (it's subsidiary) as it charged to other wholesale competitors. The result was that people paid for transport based on how much transport they used, and there was only one (natural monopoly) infrastructure layer needed. The wholesale market for gas was competitive with Western Gas just one of many players.
Why is everybody acting like we need to figure this out for the first time?
Bandwidth, though plentiful, is not unlimited. As such, metering of some kind is appropriate. Competition on the retail side is very desireable. Without it, it is safe to assume that tiers of service will be used to screw the customer as much as offer choice. Regulations should separate the transport from the retail with something like the repealed UNE-P, which be briefly had 1996-2003. Remember when upstart CLEC companies like Covad were nipping at the telco's heels?
I repeat what I've posted before. Line sharing is needed. Does it work? Bouygues Telecom, a consulting client of mine and French ISP, offers triple play service for about $60 which includes high-speed Internet, a VoIP fixed phone line, and 30 channels of TV. They are just one of many competitors. Do this, and worries about tiered services go away.
Sixty dollar triple-plays sound like something consumers here would like? Despite how much US businesses makes fun of the French, they could teach us something about telecom competition.
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This is espically true if they require a contract with early termination fee.
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I sort of hate cable where myself, my neighbors, and other share the same connection. When 5:00 p.m. comes around the internet crawls to a stop and othertimes its so slow becuase the neighbor's kid is doing his "excessive" file sharing.
People should realize that bandwidth is like a highway. You can fit only X cars on the road at a certain amount of time. If you pay for a HOV or premium lane you have much better service.
The same should apply for ISP's. People can buy the basic service where the bandwidth is allocated based on need in respect to the business model and where people pay based on a SLA where you are guaranteed X mbytes/sec or X gigabytes/sec.
Furthermorek, wouldn't such a bill require ISP's to invest more in infrastructure? Isn't that good - even if it is mandated by the government? Wouldn't it mean that something is being done right this time around?
Furthermore, there are so many ISP's that one doing metered pricing and not providing a quality service might actually make it competitively disadvantaged. Think AOL and a 200$ bill a month for 56k when doing metered pricing around 96-98. They clearly didn't see the market change from metered pricing to unlimited bandwidth usage pricing and lost a large user base to services such as Earthlink, etc.
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Wow, you mean one subscriber can max-out your whole neighborhood? You've got one seriously oversubscribed ISP there!
By the way, how do you know the source anyway?
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Metered?
First, let me say that I really like Techdirt. Now, I've noticed that you seem to group various volume usage "plans" such as caps and tiers under the same umbrella as true metering and refer to them all as "metering", which I think is inaccurate. This seems to be like referring to Joe as "Joe and all the other pedophiles". Even though Joe isn't a pedophile, the reference and association still demonizes him.
But anyway, my question is this: If you're going to label all volume usage plans (caps, tiers, etc.) as "metered", then what are you going to call actual metered plans? I'm just wondering, so that I know what term to use around here to refer to "metering" if not "metering" (it's your blog, after all).
Thanks!
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But please understand that a capped, tiered, or other "flat-rate" service can also be considered to be "metered" in that there is a meter running, counting your bits. The difference is in the billing (service plan), not in whether the service is metered or not.
So, basically, sorry, you won't get agreement around a set terminology, at least not in the way you propose it. However, the use of "metered" will likely be easily understood contextually.
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three sources of competition:
municipal wifi and fiber rollouts could also be a source of competition, if the cable and phone companies would stop fighting their deployments at every turn.
floundering technologies like BPL and wimax could work if they were invested in and marketed properly.
the truth is that video and voice are going to "over IP" and the only service consumers will want is internet access. when that happens, cable, satellite, and telephone companies will be in direct competition, offering comparative products.
this is why the cable and phone companies are doing everything in their power to slow down their network upgrades and lying about the coming bandwidth crisis.
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Re: three sources of competition:
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