Myth Debunking: ISPs Are Profiting From 'Piracy'

from the uh,-no dept

Mon, Dec 20th 2010 4:20pm — Mike Masnick

One of the popular claims from entertainment industry supporters, who somehow want ISPs to be liable for file sharing, is that "ISPs profit from file sharing." We hear this over and over again. But there's little evidence that's true. It's not like most internet users wouldn't have internet access if they couldn't file share (that's another myth, where the industry overvalues its own content, without realizing there are other reasons to have an internet connection). However, even more evidence can be found in the fact that various ISPs continue to work so hard to throttle file sharing traffic because it actually costs them a lot in terms of bandwidth. The ISPs already have some incentives to minimize traffic hogging (even if their methods are crude and lame right now).

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Filed Under: bandwidth, broadband, isps, piracy, profits, third parties
Companies: rogers

27 Comments

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monkyyy, 20 Dec 2010 @ 4:52pm

i do wish they did profit, maybe the their would be one lobbyist trying to fight the mass that is the mpaa/riaa
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Matt, 20 Dec 2010 @ 5:04pm

It was recently debunked in the Australian Federal Court in the iiNet decision.

Specifically, that it costs iiNet more if people use the full bandwidth for their plans. iiNet only profits from increased downloading if people purchase a higher bandwidth plan and DON'T use all the bandwidth.

ie internet plans are only profitable when the person isn't using all their alloted bandwidth, so a 5gb plan could be more profitable then a 100gb plan if the person with 5gb used nothing and the person with 100gb used everything.

And that, is what a court found.
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Anonymous, 20 Dec 2010 @ 5:06pm

Nah, they make all that money charging for extra bandwidth from people that send out 100,000 emails a day...
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Anonymous Coward, 20 Dec 2010 @ 5:42pm

If they weren't cheating in the first place...
It's mostly the cable companies that are throttling (we wont talk about wireless for a couple of years).
The reason cable companies are freaking out about bandwidth is that they have "oversold" their capacity.
They took (mostly for profit's sake) the same model that the phone company did for voice connections, Figuring that only x percent of their users would be using their connection at any given time they cheaped out on total available bandwidth to any given area.

Now that things have changed in the way we use the internet, they somehow cannot realize that they need to update their infrastructure to be able to provide what they have sold their customers.
The technology exists, and is proven to do the job. the ONLY reason that they don't want to upgrade is that the hardware costs would cut into their profits.
Why should they give up profit when they can get away with changing the terms of service and treating their customers like criminals instead.
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someone (profile), 20 Dec 2010 @ 5:51pm

Well duh!
ISPs love the super high bandwidth users like the pirates.

You see, your average users do not use up all of the bits they purchased and over time they become stale soggy bits that need to be disposed of.

Have you ever tried to properly dispose of your stale soggy bits? The hazardous waste transportation is insane, combined with the incineration fees and carbon credits one must purchase it is a huge cost to ISPs.

But the pirates use up all of the bits before they are stale and soggy thus eliminating the cost of their disposal.

See, it all makes perfect sense once you have all of the facts!
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Putz, 20 Dec 2010 @ 6:13pm

ISP traffic throtteling is lame
I happen to work for a SMALL wireless ISP. juts the other week they decided to "limit", using Q's on the routers, Netflix traffic. so that the overall quality of the netfilx video stream is limited to "Low". They are doing this to save a few pennys...... I"m fing pissed. but i like my job so cant do anything about it. :(
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Anonymous Coward, 20 Dec 2010 @ 6:16pm

Re: If they weren't cheating in the first place...
That's the reason why I switched to Uverse, their 12megamit connex was faster than cable and @ $45/mo a much better deal, BTW DL is approx 1 MB/sec from private trackers. I liked it so much I doubled to the 24megabit with DL approx 2.5MB/sec with good trackers. I get movies in 20 min, i doubt they make extra money cause I can DL faster than you can go to Redbox.
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Anonymous Coward, 20 Dec 2010 @ 8:48pm

ISPs can profit from piracy. They can make the internet more desirable, the can make people want to pay for a faster connection, more bandwidth, etc. ISPs actually limiting bandwidth is a step towards profiting from the piracy, because a user that goes over is going to pay.

The ISPs profit from all the content on the internet. Just some of it is more attractive than others. Pay a little more for a faster connection, and you can pirate more stuff! Save hundreds of dollars on your first pirated application!

It's actually true, they just won't market it that way.

Oh, they profit off of porn and facebook too.
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Blatant Coward (profile), 20 Dec 2010 @ 10:06pm

Re: ISP traffic throtteling is lame
They got this thing called Wikileaks, they would find this interesting and would love to subscribe to the memo's and emails you have.
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Karl (profile), 20 Dec 2010 @ 11:21pm

Re: If they weren't cheating in the first place...
You're essentially agreeing with the premise of this post. That is: more bandwidth = more $ spent for ISP's. Therefore, more .torrent traffic = less profit.

Or maybe that's your point. If so... never mind.
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Karl (profile), 20 Dec 2010 @ 11:29pm

Re:
Oh, they profit off of porn and facebook too.

And NetFlix, and YouTube, and VoIP, and gaming...

"Piracy" is really a terrible reason to get broadband. Honestly, ask yourself this: if nobody was allowed to pirate any content, ever again, do you think people in general would stop getting broadband access?

Of course not. And that's one reason (of many) that you can't blame broadband companies for profiting off of piracy. The empirical fact is that they do not. They get the most profit off of people who pay for broadband (to access email, YouTube, Netflix, Hulu, etc), but do not upload content (whether they use .torrent files or not). They lose money on "piracy."
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Anonymous Coward, 20 Dec 2010 @ 11:51pm

the results are in YOU WONT PROFIT form throttling
A) before BCE started throttling i paid them monthly with a phone of about 75$
( in this add my father who paid for dial up at 20$ plus a phone at 30$ = 50$)
total for us both ( not living at same residence either)
125.00/month

B) I switched to teksavvy and my dad dropped bell all together and no longer bothers wiht the internet its too expensive for what you can do he says. a 65 year old that surfs dating sites and auction sale sites...
teksavvy gives BCE 20$ right now for what i use as a wholeseller.
LOSS to BCE 105.00/month
C) Enter BCE forcing a 60 GB cap that now will become a 25GB cap and for the 60$ i pay FORGET IT for any uses....
Leaving teksavvy for another isp that does none of these things. NEW unthorttled and uncapped ISP gains dry loop 9$, static IP 5$ , 45$ internet. = 1$ cheaper then before and no hassels.

GOOD MOVE BCE Canada you proved you now have to make up the 125.00 that you lost BY screwing over the people that have no alternatives.

People are leaving BCE in droves. Bastards almost cost me my life because of a breached contract of there doing and then the illegal act of not having 9/11 in the wall on. YES thats a federal offense and no i do not have all kinds a doh to sue a HUGE corporation that would tie me up in court for years. THIS story is not unique in how they treat people.

my vote for the worst company of all time behind the tank makers and airplane makers of nazi germany
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Anonymous Coward, 20 Dec 2010 @ 11:58pm

@11
so do road makers profit off piracy?
after all at some time your gonna need to cross one, or might get in a car ( lets blame car makers ALSO ) and drive over one? HEY we can even blame home builders these people live in and hte hamer makers LETS GO FOR IT more we blame more chances one such retard action might work.

SEE how stupid that WHOLE idea period is.
ITS like a gun while i agree if there were none no one could get sot thats not the case. IF YOUR crazy and insane and you shoot someone you never see the gun company getting sued do you? Should we blame god next for allowing pirates to exist? HOW about space aliens for leaving video tech at roswell....

seriously the disabled lose hte most in all this and in a way im pissed about it all and im calling my countries MP's all TRAITORS, and commissioners of crimes against humanity.
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abc gum, 21 Dec 2010 @ 4:44am

If everyone stopped infringing upon copyright today, the whining about lost sales would continue and ISP profits would not vanish.

One could also claim the automobile manufacturers make profits off of bank robbery, but that would just be silly - right?
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Ben (profile), 21 Dec 2010 @ 5:21am

Re: the results are in YOU WONT PROFIT form throttling
You can add me to this as well. Dumped Rogers instead of Bell (I dumped Bell for Rogers a while back) but now I am a happy TekSavvy member. I will never pay Bell another red cent.
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node (profile), 21 Dec 2010 @ 5:26am

ISP caching
Long time lurker, first time poster.

I know that in times of eMule and Kazaa Dutch ISPs used to actually (and legaly) cache data localy.

At the time it was a win-win situation for both users and ISPs. Users would suddenly notice their download speed increase drastically, and all cached data wouldn't cost the ISPs bandwidth/traffic for data coming from beyond their own networks.

With BREIN being as agressive as it has proved lately, I am not sure what the current situation is regarding the legality of local caching by ISPs.
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BILL, 21 Dec 2010 @ 6:26am

Usage-based billing
Here in Canada, they have managed to introduce usage-based billing. When that comes into effect, I am sure the ISPs will be happy to stop throttling and begin to really "profit" from piracy. I thought about writing a letter to the IP lobbies about UBB just to encourage them to battle it over. The outcome won't be pretty but watching some of the most hated entities in the country battle it out would at least be amusing.
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Anonymous Coward, 21 Dec 2010 @ 6:35am

Re: Re:
No, people would not stop getting broadband, but they might have less desire for it. If all content was paid, people might choose between increasing their bandwidth speed and being able to buy some more music for their Ipod or subscribing to nexflix.

The point is there is only so much pie. If the users are not paying for content, they can afford to put more of their "online pie" to paying for the most connection possible. If they are suddenly in the position of having to pay for netflix instead of pirating movies, perhaps they take one less tier of internet and pay nexflix instead.
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Marcus Carab (profile), 21 Dec 2010 @ 6:50am

Re: Re: Re:
Woah woah woah... so if there's no pirated content, then "all content is paid"?

You do realize that there is such thing as legal free content right? And that it makes up a massive chunk, perhaps the majority, of what people do online?
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Marcus Carab (profile), 21 Dec 2010 @ 6:52am

Re: @11
you are my new favourite AC...
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Anonymous Coward, 21 Dec 2010 @ 7:56am

Re: Re: Re: Re:
Not to mention the options of not buying/consuming anything at all.

Piracy isn't a direct loss, this has been pointed out SO many times before. Just because I chose to download something (music, software, tv, movies, porn, etc) doesn't mean I'd actually pay for it.

And saying that people would have no desire to get broadband without piracy is total BS. People were running away from dial-up as fast as they could WELL before the glory days or Napster, let alone torrents and such. For most people, it's nice to just pop on the computer and have instant, quick access to what you want without having to wait for a connection or the content to download.
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Anonymous Coward, 21 Dec 2010 @ 8:06am

Re: ISP caching
I've always wondered why ISPs don't just use QoS to keep most P2P traffic on their own nodes. If I'm leeching a file that some of the people in my city are all seeding (and I'm betting that's common with TV shows and even movies), it essentially costs them nothing for me to do so since all the pipes are theirs.

Maybe they already do this to some extent and my use of private trackers (thanks to a DMCA takedown request) messes all that up, but the principle would work for most people. Instead, when most of my traffic was coming from boxes in Europe and Canada, with very little (and very slow) traffic coming from boxes in the US (but not anywhere near me).

I don't know, it seems like a no brainer to me...
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Anonymous Coward, 21 Dec 2010 @ 8:07am

Nice try Mike
But there's a difference between getting rid of all illegal traffice and throttling because you've overbooked your network 1:50 http://www.mypccenter.com/Blog_11_06.asp

A little less bias please.

ISPs and hosting providers have been able to thrive on the introduction of file sharing. Sure, nowadays there's more happenin' on these networks and everybody deserves a piece of the pie, hence the throttling.

Nonetheless, until ISPs can afford to 'go legit', they will go and throttle here and there an prioritize 'paid' over 'free'.

ISPs are just going with the 'financial' flow.

Throttling file sharing services therefore could mean that they are now starting to make more money by prioritizing other services.

Something that should worry you. As it is a prelude to a 'pay per app' situation which almost every ISP is longing for as they can then go and introduce 'per per service' in relation to the owner of the online service and/or developer of the app...
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Anonymous Coward, 21 Dec 2010 @ 8:33am

t-shirt?
Is there a 'Debunked on techdirt' t-shirt?
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Mike Masnick (profile), 21 Dec 2010 @ 10:42am

Re: Nice try Mike
A little less bias please.

I love how having an informed opinion that someone doesn't want to hear is often derided as "bias."

Makes me laugh every time.
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m3mnoch (profile), 21 Dec 2010 @ 11:12am

Re: Re:
> And NetFlix, and YouTube, and VoIP, and gaming...

srsly.

netflix is 20 percent of the downstream. bittorrent is 8.

"If 2 percent of Netflix customers account for one-fifth of the traffic on North American broadband lines, what will happen when more and more Netflixers begin to watch movies during peak times?"

http://www.slate.com/id/2273314/

the isp's are feeling PAIN right now, not profit.

m3mnoch.
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sam sin, 22 Dec 2010 @ 5:53am

there shouldn't be any throttling, any restricting or any fair use policy at all. when a person pays for an internet connection, they should get the service they are paying for. there are already restrictions of service because the speed of connections, apparently, depends on the distance the home or business is from the phone exchange, eg i am 1.2km from the exchange, by line route (not straight distance) and have copper line. i pay for 20 meg but get 14meg. if ISPs dont want you to use the bandwidth being paid for, dont advertise the service or keep trying to get people to 'upgrade' their speed package. if more was invested to give what is being paid for, there would be no need for throttling or any other restrictions. yet another example of profit before service and customers!
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