Broadband Providers Pretending Metered Billing Is About Helping The Poor

from the yeah,-right dept

Fri, Dec 3rd 2010 5:59am — Mike Masnick

Broadband Reports has a trio of posts pointing out the latest in ridiculousness coming out of the cable broadband industry. It kicks off by pointing out that, despite the claims of the industry, moving to metered and capped broadband is certainly not inevitable. Flat rate broadband has been amazingly profitable for these companies, but they're looking to squeeze even more money out of people. Yet, those on Wall Street who take an incredibly short-term view on how broadband companies make their money are pushing hard to get them to start offering metered billing and broadband caps. And, to top it all off, the cable industry's top lobbyist is trotting out the old ridiculous line that metered billing is really about helping out the poor by offering them more reasonable broadband deals.

Except almost none of that is true. While various attempts at putting in place metered broadband usually will include some "low end" offering so that the companies can make these kinds of claims, if you look more closely at those offerings, they are almost universally terrible. They're not designed to "spur adoption by price-sensitive consumers at the lower end of the socioeconomic ladder," as the industry claims, but to aggressively upsell people to higher rate plans by making the low end plans as crappy and unusable as possible.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: billing, broadband, business models, metered

40 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

This comment has been flagged by the community. Click here to show it

Anonymous Coward, 3 Dec 2010 @ 6:02am

Uncle Sam, Wikileaks wage cyber guerilla war
Uncle Sam, Wikileaks wage cyber guerilla war
Chidanand Rajghatta, TNN, Dec 3, 2010, 06.51pm IST

Read more: Uncle Sam, Wikileaks wage cyber guerilla war - The Times of India http://timesofindia.indiatimes.com/world/us/Uncle-Sam-Wikileaks-wage-cyber-guerilla-war/articleshow/ 7036499.cms#ixzz173rTWPSs

http://timesofindia.indiatimes.com/world/us/Uncle-Sam-Wikileaks-wage-cy ber-guerilla-war/articleshow/7036499.cms
[ link to this | view in thread ]
Chronno S. Trigger (profile), 3 Dec 2010 @ 6:08am

Re: Uncle Sam, Wikileaks wage cyber guerilla war
Might I recommend the "Submit Story" link at the top of the page?
[ link to this | view in thread ]
Anonymous Coward, 3 Dec 2010 @ 6:57am

While uncapped broadband is good for the people, unlimited access to information is not good for government, newspapers and big businesses who are trying to control the information.
Limit how much data sheeple have access to and they will chose to download music and movies rather than keep informed.
[ link to this | view in thread ]
JEDIDIAH, 3 Dec 2010 @ 6:59am

The ugly truth
You know, some of us are old enough to remember "metered Internet". Although it wasn't the Internet back in those days. It was certainly not something that was terribly acessable to the poor. Been there. Done seen that. Don't want to repeat it.

This is something that will be used to FLEECE the poor, not "empower" them.

Companies will play on their ignorance and inability to flee to better options and will end up charging them more for less.

Add it to a long list of soak-the-poor options along with pay day loans and rent to own.
[ link to this | view in thread ]
Eileen (profile), 3 Dec 2010 @ 7:00am

Any of you "free market" people going to argue that we'll be able to choose an uncapped provider and thus voice our displeaure? Somehow I doubt that will be an option, ugh.
[ link to this | view in thread ]
Anonymous Coward, 3 Dec 2010 @ 7:08am

Re:
Any of you anti-capitalist going to argue that internet providers operate in a free market? Loons
[ link to this | view in thread ]
Berenerd (profile), 3 Dec 2010 @ 7:09am

if this happens...
I will be forced to steal internet from the open WIFI at the verizon building next door. (I did this once before when my verizon DSL went out for 2 days because some idiot hit a telephone pole outside my house and verizon couldn't be bothered to come out and fix things any sooner.)
[ link to this | view in thread ]
Greevar (profile), 3 Dec 2010 @ 7:14am

Typical tactics...
Of those that wish to make more money without earning it. The corporate mind is a twisted and sick place of psychosis where profit trumps all other priorities. Companies have a bad habit of dividing up a service or product into as many pieces as they can and selling to the public for as much as possible. Cable does this with their TV offerings. They sell us "packages" where you get access to certain networks for a fee and to access all of the channels, you need to buy all of the packages. Now, it would cost less if all the channels were in one package, but if they divide them up into smaller packages, they can charge more per channel and therefore make more money on those that buy more packages than other consumers.

This is exactly what they are doing with the internet. They want to divide the service into as many chunks as they can (in this case, by the MB) and sell that at a basic rate. The cheapest offering will obviously be terrible as Mike predicted and you will be forced to chose the more expensive offering to get acceptable service. All the while, they are getting more money by offering less service. They can do this because they are often one of only two options at best. This needs to change. Prosperity of humanity as a whole is retarded by companies like these because their insatiable pursuit of profit overrules the public good, which used to be the governing core of all corporate charters.
[ link to this | view in thread ]
ThatDutchGuy, 3 Dec 2010 @ 7:16am

How unexpected
Gee, I was wondering when this was going to happen. Just when streaming video is becoming a big thing, and people dropping cable TV like a brick, hey, let's introduce metered connections again!

What better way to insure a steady stream of revenue than to have people watch a movie or two over Netflix or Hulu, right?
[ link to this | view in thread ]
Greevar (profile), 3 Dec 2010 @ 7:17am

Re: Re:
Free? No. Barely regulated? You bet your ass. It's a parasite's dream out there if you have the stones to screw people over within the confines of the law.
[ link to this | view in thread ]
Greevar (profile), 3 Dec 2010 @ 7:21am

Re: How unexpected
Bingo! You win the internet for today! That's exactly why they're doing this. They realize their expensive legacy services are going by the wayside, so they are making the alternative more expensive and inconvenient to use so you have no choice but to stay with cable TV.
[ link to this | view in thread ]
Nate, 3 Dec 2010 @ 7:39am

"Ridiculous"
I beseech you, as appropriate as that word is, to try to avoid using that word in a post for just a day.
[ link to this | view in thread ]
FreezingInMinnesota, 3 Dec 2010 @ 7:44am

What this country needs...
What this country needs is broadband competition. I think there is a HUGE market for an enterprising company to swoop in and offer broadband only, no cable, no phone, JUST broadband. That way there wouldn't be the conflict of interest we see in the cable companies with broadband competing against their legacy cable TV. If it was affordable I'd jump on it immediately, dump cable and phone service yesterday!
[ link to this | view in thread ]
Chronno S. Trigger (profile), 3 Dec 2010 @ 7:59am

Re: Re:
That's actually what we've been arguing for a while now. Internet providers, telephone providers, cable providers don't operate in a free market. They operate in a government controlled market that makes it almost impossible for new competitors to start. Kinda hard to be a free market when no one is allowed to step up and say "we can do this better".

Anyone hear about Google's decision on their FiOs?
[ link to this | view in thread ]
Anonymous Coward, 3 Dec 2010 @ 8:04am

Re: Re: Uncle Sam, Wikileaks wage cyber guerilla war
You may recommend it but that was not the objective.

You see if one recommends a story the link does not become available to the audience only to the editors of the blog which would then deprive the audience of understanding what the US government is up to.
[ link to this | view in thread ]
David, 3 Dec 2010 @ 8:08am

Wireless Broadband
I think the industry is trending towards wireless data at true broadband speeds. It will be in the next decade or so that all of the copper in the ground becomes meaningless. That is why Comcast is an investor in Clearwire. Hopefully, this will mean choice of providers.

We can only hope that competition between wireless service providers is better than the monopolies granted to cable providers. I (naively) think it will be.
[ link to this | view in thread ]
interval (profile), 3 Dec 2010 @ 8:38am

Re: if this happens...
If its open its not stealing. Its an invitation.
[ link to this | view in thread ]
Chronno S. Trigger (profile), 3 Dec 2010 @ 8:46am

Re: Re: Re: Uncle Sam, Wikileaks wage cyber guerilla war
and if the link provided is relevant to TechDirt, it will be published. Hell, it may be in the works already.

Posting it in the comments of an unrelated article takes focus away from the article and takes credibility away from the new story. I haven't even clicked on the link due to it just being posted in a random article by some rude guy.
[ link to this | view in thread ]
A Dan (profile), 3 Dec 2010 @ 9:01am

Re: Re: if this happens...
It will be like stealing gas from an unlocked gas tank if it's switched to metered, since you'll actually be depriving someone of their paid-for allotment. Hopefully it doesn't come to that.
[ link to this | view in thread ]
Hephaestus (profile), 3 Dec 2010 @ 9:08am

Re: What this country needs...
Recently the FCC openned up spectrum that will more than likely be used for that. Its open access and anyone can use it.

FCC opens up White spaces

What we actually need is a new player or technology to come along.
[ link to this | view in thread ]
DanVan (profile), 3 Dec 2010 @ 9:15am

Broadband is right on and it is sickening.

The iPad being given TOPS 2gb as the ceiling use per month is an absolute JOKE and shows how AT&T and others want to continue FORCING people to not use much while ENCOURAGING more to use it

Why? So more can hit the caps and hit penalties

2gb cap....what a freakin joke

I hit that cap almost monthly and I don't watch Netflix, etc....I am FAR from a "heavy user"
[ link to this | view in thread ]
mike allen (profile), 3 Dec 2010 @ 10:06am

Re: Re: What this country needs...
i dont know how many ISPs you have in the U.S but here in the U.K we have hundreds of ISPs. So i guess you have thousands to chose from.
[ link to this | view in thread ]
NickMc, 3 Dec 2010 @ 10:18am

It's already in Canada
You guys are way ahead of us. In Toronto we have 60Gig a month broadband caps. Followed by massive overage charges capped at JUST $50 per month.
Then, wireless we have a puny 500meg/month cap for smartphones. Wonder why things like Netflix will never catch on here? Not because of a lack of content but because it costs us more in overage fees than going to the damn store and renting the DVD. And forget streaming content on the iPhone anad Android. Can't do it.

And of course we have the same monopoly/ legacy system here too. If you don't like it there's nowhere else to go. They all charge the same. Absolutely no competition and no Govt' willing to face the issue.
[ link to this | view in thread ]
Anonymous Coward, 3 Dec 2010 @ 11:17am

OHHHHHH canada
ohh canada we pay the highest net rates
ohhhhhhh canada we get UUB and caps
OHHHHHHHH canada im cutting my net next month cause i cant afford it....
[ link to this | view in thread ]
Anonymous Coward, 3 Dec 2010 @ 12:00pm

Re: Re:
Any of you anti-capitalist going to argue that internet providers operate in a free market? Loons

Umm, why would they? Isn't that what the capitalists claim?
[ link to this | view in thread ]
Anonymous Coward, 3 Dec 2010 @ 12:02pm

Re: Re: Re: if this happens...
It will be like stealing gas from an unlocked gas tank if it's switched to metered, since you'll actually be depriving someone of their paid-for allotment.

Not if they choose to offer it too you. How much they pay for it makes no difference in that regard.
[ link to this | view in thread ]
Anonymous Coward, 3 Dec 2010 @ 12:09pm

Flat Rate Electricity
What we need is flat-rate electricity, too. Just get rid of those stinkin' meters. I hate having to think about how much electricity I'm using every time I crank up the air conditioning or take a really long, hot shower. If they would just get rid of those meters and switch to flat-billing, I'm sure everyone's bills would go way down. Meters are just a way to rip people off.
[ link to this | view in thread ]
Greevar (profile), 3 Dec 2010 @ 12:56pm

Re: Re: Re: What this country needs...
In this country we have, at most, two choices for ISP per market. We can sign up with the phone company for DSL or the cable provider for cable internet. There are other providers in the area for DSL, but they rent their lines from the phone company and still requires a phone line. There are a handful of locations that have access to fiber optic service, but they are few and far-between.
[ link to this | view in thread ]
Greevar (profile), 3 Dec 2010 @ 1:01pm

Re: Flat Rate Electricity
You can find ways to reduce your electricity usage and still enjoy the benefits, even produce your own electricity. You can't produce your own internet access can you?
[ link to this | view in thread ]
Anonymous Coward, 3 Dec 2010 @ 2:34pm

Re: What this country needs...
In the USA?

There is no market, anybody trying to build a network will be stopped in its tracks by legislation.

That is why other countries made laws to guarantee line sharing and build their own networks.

It takes a really long time to deploy cables not because of the cost of raw material or the digging but because of the politics of it.
[ link to this | view in thread ]
Anonymous Coward, 3 Dec 2010 @ 2:36pm

Re: Re: What this country needs...
What we need is public IXP's connecting cities that bypass private IXP's.

We probably can do a wireless network on an entire city those tools already exist but it will not do much good if you can't reach others.
[ link to this | view in thread ]
Anonymous Coward, 3 Dec 2010 @ 3:04pm

Re: Re: Flat Rate Electricity
You can find ways to reduce your electricity usage and still enjoy the benefits,

You can find ways to reduce your internet usage and still enjoy the benefits, too.

You can't produce your own internet access can you?

You can't power your house with internet access, can you?
[ link to this | view in thread ]
nasch (profile), 3 Dec 2010 @ 4:02pm

Re: Re: Re: if this happens...
It will be like taking gas from a tank that says "help yourself".
[ link to this | view in thread ]
Greevar (profile), 4 Dec 2010 @ 8:48am

Re: Re: Re: Flat Rate Electricity
What you just said is a bunch of nonsense. You could try to find ways to reduce your internet usage, but that's such a sysyphian task. It's easy to use more efficient devices to keep your electricity usage down. You don't have that kind of control over your internet connection. A 1000 MB video is still a 1000 MB video. Anything else is just going without. If you're going without such things, why even bother having the internet at all? As I said before, you can find ways to produce your own electricity (i.e. solar, wind, etc), but you cannot produce your own internet access. That would require you to create your own internet.
[ link to this | view in thread ]
Gene Cavanaugh, 4 Dec 2010 @ 1:18pm

Broadband
Two points for an otherwise excellent article:

1. When a service is shared, and has only a certain amount of capacity, there will always be, for example, teenagers who get bragging rights by endlessly downloading nonsense, in hopes that they will become "notorious" - the thing that makes violent video games so popular. In that case, the service should increase their service AND at least temporarily cap for fairness.
2. I don't like AT&T, and I know they are not working in the consumer's best interest - but I use AT&T DSL, and it is both cheap and pretty good; and they aren't spamming me to improve the service.
[ link to this | view in thread ]
Anonymous Coward, 4 Dec 2010 @ 2:49pm

Re: Re: Re: Flat Rate Electricity
That doesn't read right.

"You can produce your own energy and reduce your dependency on the utility company"

Creating your own connections to the rest of the world will be a bit difficult though possible.
[ link to this | view in thread ]
Anonymous Coward, 4 Dec 2010 @ 10:07pm

Re: Re: Re: Re: Flat Rate Electricity
What you just said is a bunch of nonsense.

Strange, that's just what I was thinking of *your* comment.

You could try to find ways to reduce your internet usage, but that's such a sysyphian task.

Why's that? Your saying so doesn't make it so.

It's easy to use more efficient devices to keep your electricity usage down.

Oh really? If I already have the most efficient devices on the market, how is it so easy to "use more efficient devices"?

You don't have that kind of control over your internet connection. A 1000 MB video is still a 1000 MB video.

I guess you never heard of compression or anything like that. You're sounding more ignorant all the time.

A 1000 MB video is still a 1000 MB video. Anything else is just going without.

Hey, guess what: 1000 Watts is still 1000 Watts, too. Anything else is just going without, huh?

If you're going without such things, why even bother having the internet at all?

If you're going without such things, why even bother having electric power at all?

As I said before, you can find ways to produce your own electricity (i.e. solar, wind, etc),

But, I can't produce my own power grid, now can I?

but you cannot produce your own internet access.

But I can very well produce my own network access.

That would require you to create your own internet.

Easily done.

Really, you seem to have no idea what you're talking about.
[ link to this | view in thread ]
Anonymous Coward, 5 Dec 2010 @ 6:59pm

Re: Re: Re: Re: Re: Flat Rate Electricity
Oh really? If I already have the most efficient devices on the market, how is it so easy to "use more efficient devices"?

Then you need to be a patriot and start producing your own energy and contribute to the distribute grid which is better than the "smart grid" proposal.

http://sustainabledesignupdate.com/2007/08/honda-co-generation-for-homes/

That one uses gas but you can retrofit it to use hydrogen or syngas from organic material gasification.

Instead of paying others to throw out your garden clippings, food leftovers and other things that would have gone to the incineration anyways you use it to produce your own energy, which saves you money to spend on other things, but hey the choice is yours, you can continue to spend thousands of dollars in utility bills just don't come crying when katrina like events strike you or you get browned out, you choose to let your faith on the hands of others remember that when it happens.

But, I can't produce my own power grid, now can I?

Yes you can!
[ link to this | view in thread ]
Anonymous Coward, 5 Dec 2010 @ 7:00pm

Re: Re: Re: Re: Re: Flat Rate Electricity
But, I can't produce my own power grid, now can I?

Yes you can!

http://sustainabledesignupdate.com/2007/08/honda-co-generation-for-homes/
[ link to this | view in thread ]
Anonymous Coward, 6 Dec 2010 @ 8:59am

Re: Re: Re: Re: Re: Re: Flat Rate Electricity
But, I can't produce my own power grid, now can I?

Yes you can!

I can produce my own power on the grid, but you need to explain just how I am supposed to produce my own power grid.
[ link to this | view in thread ]