Metered Bandwidth Isn't About Stopping The Bandwidth Hogs; It's About Preserving Old Media Business Models

from the stifling-innovation dept

Tue, Feb 1st 2011 9:05am — Mike Masnick

For years, we've spoken about why metered broadband stifles innovation, by adding serious additional mental transaction costs and limits to anything you do online. If you look at the history of various online services, you know that AOL didn't really catch on until it went to a flat-rate plan from an older metered (by time) plan. It makes a huge difference in how people use the internet, and putting gates and fences around them doesn't just keep the bandwidth down, but it limits all sorts of innovative services that rely on the fact that end users have no limits on their bandwidth. In the end, metered broadband always appears to be a way for ISPs to squeeze more and more money out of people.

However, as Canadian regulators seem prepared to let Bell Canada force all DSL providers into offering metered broadband, some are pointing out another reason for metered broadband. Not only does it stifle basic innovation, but it also protects the legacy media/entertainment industry and their business models. If downloading becomes more "expensive," then, in theory, fewer people will use services that require higher bandwidth. And this isn't just file sharing services either, but things like Netflix, which many studios still wish to limit and control when it comes to its online streaming plans. None of this is about "bandwidth hogs," at all. It's all about putting up barriers to anything that might be disruptive to legacy industries.

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Filed Under: broadband, business models, canada, media

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Richard Ahlquist, 1 Feb 2011 @ 9:17am

And about investing
..or lack thereof they want the money in their pocket not spent on upgrading an already overtaxed infrastructure.
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John Doe, 1 Feb 2011 @ 9:35am

I hope metered plans don't last
I will cut back on my usage before I pay exorbitant rates for broadband. All of the providers are making good money now with flat rates, there is no call for metered rates except for price fixing within the industry.

Just look at cell phones, they use to hand out big, thick notebooks with rates for when you call and where you call. I avoided cell phones as long as possible until I could tell what it was going to cost when I made a call without consulting a book.
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Anonymous Coward, 1 Feb 2011 @ 9:39am

Something that is related and just as infuriating.

Commercial stations complaining about anything that enables people to watch their show on a computer with no extra charge.

In Belgium commercial stations complained that offering DVR services with no extra charge would destroy their business and HMG in the Netherlands has said that the public channels offering free streaming services hurt their plans of doing the same and have even sent a complaint to the EU about it.

Both only wanted to offer the streaming/recording for their shows for a fee. No one seems to be keen on changing the status quo and wonder why illegal streams and downloads still have so much appeal.
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charliebrown (profile), 1 Feb 2011 @ 9:42am

Here In Australia.....
Here in Australia almost every ISP has had metered broadband internet since "day one" - quite a few ISP's were also metering it back in the days of dial-up. A few years ago most ISP's only counted downloads. Now almost all ISP's count uploads as well as downloads. This co-incided with the "Web 2.0 Explosion" - more user generated content equals more uploads which equals more money for ISP's. There have also been many articles as to why there will never be unmetered internet.

OK, in Australia we aparrently only have two "internet pipes" connecting us to the rest of the world. Does this mean it would only take two phone calls to disconnect us from the internet? Oh, wait, that's another topic.... Ah, yes, I remember what I was gonna say now: They say it costs money to shift data around, hence why they say we will always have metered internet in Australia. They also say it's why sooner or later the whole world will be on metered internet.

You know, when I heard that NBC was looking to megre with Comcast, the first thing I thought was "Oh, so THAT'S how they're going to try and stop illegal downloads". It seems a bit drastic, but, hey, if it works, they'll be happy.
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Brendan (profile), 1 Feb 2011 @ 9:44am

Bad practice forced on competitors
While I think Bell is making a terribly stupid decision in adding these ridiculously low caps (25GB) to their plans, that should be their choice.

The REAL problem is that the CRTC is allowing Bell to force these same rates/caps upon other wholesale ISPs who rent out access via Bell's copper. This effectively eliminates market pressure by forcing Bell's competitors to adopt the same stupid limits.

The CRTC has failed us more than we thought possible.
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Mike C. (profile), 1 Feb 2011 @ 9:49am

Re: Bad practice forced on competitors
Just wait until people start using math to figure out how much they're being gouged. Found this one off a Tweet a few minutes ago:

http://i.imgur.com/M3G7f.png
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jfgilbert (profile), 1 Feb 2011 @ 9:49am

It could turn into a nice fight
The most active area of tech, and the one that sees the fastest growth, is, of course, cloud computing. Cloud service providers, from Google to Amazon and Salesforce.com are extending their offerings to individuals and small businesses. Businesses of all types rely on ubiquitous access to cloud services by their employees on site, on the road, or at home.
Metered broadband is going to throw a nice wrench into these practices and plans. It will be nice to see how the ISPs will behave when they are no longer dictating terms to the captive and powerless audience of private users but have to face powerful industry groups who can throw a lot of money around, lobby the legislators, or even start competing.
Wouldn't it be nice to see the ISPs smacked down hard by bigger bullies?
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Jay (profile), 1 Feb 2011 @ 9:51am

Re: And about investing
Overtaxed...?

Seriously? The infrastructure is overtaxed instead of already paid for and needing to be used?
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fogbugzd (profile), 1 Feb 2011 @ 9:51am

Re: Bad practice forced on competitors
AT&T is starting to feel the impact of the bandwidth caps. There have been several articles lately about how if it comes to sealing a deal or loosing a customer, they seem to find loopholes that qualify you for the old, unlimited plan.
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Trails (profile), 1 Feb 2011 @ 9:52am

Possibly it's simpler than that
While you're correct, I think it's a bit simpler.

To handle higher bandwidth demands, ISPs could invest in more/better infrastructure, or start metering bandwidth, forcing people to use less.

One costs money, one makes money.

The benefit to the legacy media businesses is incidental, imo.
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BigKeithO (profile), 1 Feb 2011 @ 9:52am

Thought This Was a No Brainer?
Of course metered bandwidth is about protecting their old models, I didn't even realize that this wasn't obvious. All that you have to do is look what which ISP's own what media company in Canada to see that.

Bell owns CTV, Shaw just bought Canwest and Rogers owns, well... Rogers. 3 major IPS's that own 3 major media companies. Their choices are to sit by while consumers wake up to the fact that they are being overcharged for media via the traditional channels (satellite/cable) and take advantage of the new, legal, services popping up on the internet. Or they can cap data and make it too expensive to make these new services attractive.

What works better for one of these large companies? Having someone pay $7.99 to Netflix every month and stream using their $50/mo internet connection or to cap their data and convince them that their $7.99 is better spend on one VOD rental?

Of course this is all about protecting the old model!
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Anonymous Coward, 1 Feb 2011 @ 9:54am

Re: Bad practice forced on competitors
This pisses me off. I went with Teksavvy because they had no contracts and it was $32/month for 200GB of bandwidth. Two days ago i got an email saying that because of this CRTC decission, the 200GB plan and the unlimited plan are being scaled down to 25GB/month but you can buy 120GB "insurance" blocks for an extra $15/month.

Their tone seemed like they didn't want to do this to us but they have no choice, and they also provided some online petitions and automated emails to be sent out to the higher ups to voice our disdain with them forcing this on the others because clearly they can't keep up and compete with the smaller providers
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Joe Bandwidth, 1 Feb 2011 @ 9:55am

Instead of metering
If data volume from users is where the problem is at, and properly representing the costs is a genuine goal, is metering and charging for your bandwidth the only solution? How about raising the costs on an unlimited plan? How about throttling the speed of users who hit their caps, instead of outright charging for every bit?

To be honest I'm leaning toward John Doe. Since the communications market is steadily consolidating again,it's easy to engage in some old-fashioned, cartel-style price-fixing.
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Brett Glass, 1 Feb 2011 @ 9:57am

Nonsense
I'm an independent ISP and am not a cable TV or telephone company. And I can tell you for a fact that the above is nonsense. Many ISPs pay $100 or more per Mbps of bandwidth per month, and we need to recoup that cost. If users don't want to pay what it costs to provide them with the service, then it is they who are being greedy, not us.

It seems to me that "Techdirt" is aptly named. If it were a reputable news outlet, it wouldn't spout bogus conspiracy theories.
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BigKeithO (profile), 1 Feb 2011 @ 10:02am

Re: Instead of metering
If they insist on UBB how about they treat it just like a utility? Have a one time connection fee to set the service up, charge $5-$10/mo maintenance on the connection and then charge, oh say, $0.05/GB?

That is more in line with the actual costs for the ISP. If they are really so worried about "data hogs" then they will pay more than other users and Grandma will get a nice small bill for checking her email.

You won't see any ISP's jumping on that idea. This is a blatant money grab, made even worse for the fact that Canadian tax payers already subsidize these companies for network build outs.
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Coach George (profile), 1 Feb 2011 @ 10:02am

Re: I hope metered plans don't last
You miss the point. Income is flat. This is not acceptable in business. It would not be acceptable to you or I either. Consider if we never received raise's, cost of living or otherwise.
There are two solutions:
1-Innovation
2-Regulation

Regulation is easier and guaranteed until a competitor bucks the system.
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Anonymous Coward, 1 Feb 2011 @ 10:03am

Re: Nonsense
"I'm an independent ISP" doesn't exactly boost your credibility either.
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BigKeithO (profile), 1 Feb 2011 @ 10:07am

Re: Nonsense
The costs of bandwidth are magically going up are they?
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Anonymous Coward, 1 Feb 2011 @ 10:08am

Re: Re: I hope metered plans don't last
Or they can raise the rates without giving better service, as they have done repeatedly to me.
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Anonymous Coward, 1 Feb 2011 @ 10:09am

Re: Re: Nonsense
http://www.brettglass.com/

Neither does that, assuming that is him.
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Anonymous Coward, 1 Feb 2011 @ 10:12am

Re: Re: Bad practice forced on competitors
$62/month for 265GB isn't that bad a deal. if they would just knock you up into the next $15/120GB block when you go over then I would be happy, but the per GB overage price reveals that they are evil.
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Hephaestus (profile), 1 Feb 2011 @ 10:16am

Re: Here In Australia.....
"You know, when I heard that NBC was looking to megre with Comcast, the first thing I thought was "Oh, so THAT'S how they're going to try and stop illegal downloads". It seems a bit drastic, but, hey, if it works, they'll be happy."

I had a discussions with a member of GE's management on this. He said "I can neither confirm nor deny that the sale of NBCU is due to forecasts on where the content industry is going". He then added "If the content industry were going in the direction you suggested. It could be one of the reasons for us (GE) to remove NBCU as an asset." Total indirect non-answer to my questions. It doesn't bode well for Comcast or NBCU.
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Anonymous Coward, 1 Feb 2011 @ 10:17am

This law *only* applies to residential users, not companies. I work for a datacenter and we're not stopping our unmetered plans, nor have we any intention on doing so.

I agree with Mike on this one that it's just to protect the good old dying business model. Why adapt when we can spend millions in tax-payer money to make sure they can't download?
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Jake, 1 Feb 2011 @ 10:18am

If you're going to do metered broadband, why not take a cue from pre-pay cellphone plans? You pay a sum of money, you get a fixed amount of data, and once that data runs out you buy another lot.
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Anonymous Coward, 1 Feb 2011 @ 10:21am

Re: Re: Instead of metering
We make our own BGP mix here (7 different providers) and at cost, we can sell bandwidth at 0.08$/GB. Most residential providers, that have NO BGP mix (or very little ones), will charge a few $'s per extra GB.

That's greed, pure and simple. There's no way that it's not to make 1000% profit on something they barely pay for.

So.. use a professional line with more redundance, better overall speeds, much higher quota caps... just not at home.
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charliebrown (profile), 1 Feb 2011 @ 10:27am

Here In Australia..... (Part 2)
I just had a look at Bell's plans and it seems the most they offer is a 75GB per month plan for CA$53 with uploads and downloads counted. Here in Australia the ISP's who count uploads are often (though not always) offering plans with hundreds of GB's of data.

Internode* http://www.internode.on.net/residential/broadband/adsl/easy_broadband/

TPG http://www.tpg.com.au/products_services/adsl2plus_pricing.php?/pricing/adsl2plus

iiNet http://www.iinet.net.au/broadband/plans.html

These are three of Australia's biggest ISP's and even smaller ones also offer large plans like thse. The phone lines are controlled by Telstra or Optus and both of those companies count uploads (and have done from the get go) and even limit the upload speed to 1MB as a maximum (works out to 120k maximum on average)

*Internode has many plans that do not count uploads as well
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cj (profile), 1 Feb 2011 @ 10:29am

not enough electricity
the USA cannot produce enough electricity to supply every citizen with unlimited broadband. FACT (or not)
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taoareyou, 1 Feb 2011 @ 10:30am

Metered Billing = Death of Online Ads
When people have to pay for bandwidth, they are going to do everything within their power to use only what they want. That means ad blockers will become the norm, with people not wanting precious kb being wasted on advertisements.

When everyone starts blocking ads, companies stop buying ads. Lots of new business models are stifled if not completely made obsolete.
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Jeremy7600 (profile), 1 Feb 2011 @ 10:34am

Re: Nonsense
Wait, your users don't pay any access fees? Where can I sign up?

If you couldn't tell, the inference is that they already paid, thats their monthly bill. You didn't account for them to use so much bandwidth? STOP SELLING WHAT YOU CAN'T PROVIDE. And if you sell them so much a month, mean it, instead of whining that they need to pay what it costs you.

I'm sick and tired of these regional ISPs that oversell bandwidth and then complain that the users hog it all. They are only using what you sold them, that they are paying for. Seems only logical, to me.
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Joe Bandwidth, 1 Feb 2011 @ 10:35am

Exactly. The fact is,
If this is a genuine concern, there are alternatives, and IMO, they beat the current idea of "pay us $60 a month for a bandwidth that is difficult for the average consumer to calculate, then when you go over the cap, eat $1 per MB" scheme.
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Anonymous Coward, 1 Feb 2011 @ 10:36am

Internet Service Providers (ISPs) are about to impose usage-based billing
This means we're looking at a future where ISPs will charge per byte, the way they do with smart phones. If we allow this to happen Canadians will have no choice but to pay MUCH more for less Internet. Big Telecom companies are obviously trying to gouge consumers, control the Internet market, and ensure that consumers continue to subscribe to their television services. These Big Telecom companies are forcing small competing ISPs to adopt the same pricing scheme, so that we have no choice but to pay these punitive fees. This will crush innovative services, Canada's digital competitiveness Sign the petition NOW! http://openmedia.ca/meter
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Mr. LemurBoy (profile), 1 Feb 2011 @ 10:44am

Re: Internet Service Providers (ISPs) are about to impose usage-based billing
Yeah, you can bet I've already signed this. And shared it on Facebook, and told my friends, etc. Yeah, I'm pissed about this.
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Anonymous, 1 Feb 2011 @ 10:58am

Whoops, it seems Masnick misspelled 'legal' as 'legacy'...
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BigKeithO (profile), 1 Feb 2011 @ 11:05am

Re: Internet Service Providers (ISPs) are about to impose usage-based billing
Also http://stopthemeter.ca has over 200,000 signatures and climbing rapidly.
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Anonymous Coward, 1 Feb 2011 @ 11:16am

New business model!
This post just gave me the idea for a new business model (which I will not patent, so anyone who wants can implement it).

Sell people access to a server from which they can upload and download without metering. Also give them a service where you will send a portable HD with a copy of files from this server, or will receive a portable HD with files to be put on this server.

So, for instance, if you want to download a large set of Linux ISOs but do not want to use up your metered bandwidth, you download them into this service and it will send them to you in a portable HD. On the other direction, if you want to upload some large homemade movies to YouTube, you can send them on a portable HD to this service and upload to YouTube from it.

Amazon already has a similar service, BTW.
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Anonymous Coward, 1 Feb 2011 @ 11:29am

I don't think is about preserving anything, since big studios and labels will have to pay for it too.

The ISP's are just asking to stall all innovation on the internet.

This is a blatant money grab plain and simple.
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tasmot (profile), 1 Feb 2011 @ 11:39am

Somebody is NOT Thinking It Through
The ISPs are making a money grab on the already built out infrastructure and they are not thinking it through. In general there are three types of websites, informational, ad supported, and services for pay. The whole equation of accessing these sites will change with metered service. Advertising supported sites are going to suffer the most. There will be a HUGE backlash about paying per byte for ALL types of advertising. Probably the first to go will be Flash based animated advertising. Why would I want to keep wasting "MY" money to pay for the download of all of that flashy graphic advertising. Then the banner ads and so on. It already tries my patience waiting for that crap to download (and it holds up what I really want to see).

Then the services that are out there are going to suffer. Will I really want to browse through Amazon anymore? It is going to cost me a lot of money to download all of the flashy displays they have and to look through page after page of products. I won't want to buy anything without seeing a picture and by the time I look at 15 to 20 picture of say a stereo system, I will have paid $10 just to see the pictures. I will probably have to go back to the brick-and-mortar stores and stop shopping online unless I know exactly what I want and where I want to get it.

Google is going to become useless. It will cost $1.00 a page to look at the results of a Google search. That will stop fairly quickly. Facebook, Twitter, LinkedIn will all come to a grinding halt. Who will want to pay to download "I ate stinky fish for lunch" ever again. Or, just how much will it cost to watch a dancing baby on YouTube? All those pictures and wall updates on Facebook will be a lot less interesting at $1.00 a page to look at the updates. On the other hand, newspapers will be happy. Who could afford to search on Craigslist or Monster at $1.00 per page view? The big sports systems will also lose out. Who is going to keep NFL.com up and updating on all the games at $1.00 per refresh? One Sunday of watching Football on NFL.com is going to cost $40 to $50.

The cable companies (at least Comcast) are trying to switch everyone to digital and drop the analog signal from their wires because digital uses a lot less bandwidth. Yet, they charge extra to switch to the less bandwidth version. Why would I want to pay more when it costs them less to send it? Especially with the way that I keep losing the signal altogether.

I sure hope that Google, Amazon, eBay, Yahoo, and those other big 2.0 companies are ready to shutdown, because those services are going to be a lot less useful under a metered plan.

Oh, Yeah! The internet is also going to become a much more dangerous place to surf. I sure won't want to pay $20 to download all of those Microsoft updates, Java updates, iTunes updates and so on and so on and so on. All of the automatic updaters are going to be turned off and deleted from my system so that they don't keep eating up my bandwidth. What about the virus definitions. My current anti-virus package (It's Avast and I love it) checks for updates several times a day. I'll have to turn that off and rely on my memory to check for updates every week or so. Of course I won't get many viruses because I won't be surfing the NET either. I guess that is an OK trade-off for the ISP though. I'm guessing that online stock trading is going to go away as well. Who could afford to let a stock trading system be up and using all that bandwidth all day to watch their stock portfolio? It would cost more than could ever be made.

I should start working on my easy to use advertising blocking system right away.
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Punmaster (profile), 1 Feb 2011 @ 11:50am

It's only happening because ...
there IS no effective competition in Canada. There are five big ISPs in Canada. Between them, they have 96% market share. Who's going to push them to innovate/provide new services at good prices if the government doesn't?

This situation isn't going to get better till there are more ISPs in Canada.
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Bob Frankston (profile), 1 Feb 2011 @ 12:08pm

It is indeed about a 19th century business model
The problem is very simple -- when we do services our self the defining premise of telecom -- service funding fails. And you can't make it up by selling bits because bits have no intrinsic value. The number of bits consumed has no relationship to the value and no relationships to consumption -- you aren't using up the fiber.

We need access to the basic physical facilities -- copper, fiber and radios -- to exchange bits among ourselves. As with our home networks we can expect to see capacity increase rapidly to meet the demand once we own our facilities.

More at http://rmf.vc/demystify.td and http://rmf.vc/nncc.td.
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Anonymous Coward, 1 Feb 2011 @ 12:18pm

Re: Re: Bad practice forced on competitors
I do want to remind you that you're also paying for lower latency than the shipped flash drive.
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PRMan, 1 Feb 2011 @ 12:30pm

Re: Somebody is NOT Thinking It Through
First, AdBlock Plus already exists. I don't bother with it (NoScript is enough for me) but if everything went metered I sure would.

Second, you are 100% right when you say that Google would not stand for it. And they won't. As soon as ISPs start down this road in the US, Google will use the former TV bandwidth they bought for a fortune and release high-speed, unlimited internet nationwide for peanuts, undercutting everyone. They're just waiting for this to happen to ensure that people would switch if they do it.
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steveo (profile), 1 Feb 2011 @ 12:33pm

Metered Bandwidth
I don't see the problem with charging more or less based on usage. The comments sound like people who use a lot of bandwidth who want to get it for free or for a very low price. The other side of the coin is that there are people who use very little bandwidth who want to pay less because they use less. Your cell phone bill is based on pricing tiers where you pay more to get more, and you can pay less to get less. I have Comcast cable for internet and I pay a surcharge to get 22 MBps. It's an extra $5 or $10 per month, but it is worth it. People who can't afford the extra price, or who don't care about it, can get less bandwidth for less money per month.
Does anyone really think that innovation is being stifled if someone has to pay a little extra for more bandwidth?
Should someone at a restaurant pay the same for a cup of coffee and a piece of pie as someone who goes back three times to an all you can eat buffet?
I am in favor of systems where you pay based on how much you use. That's capitalism and the American way, isn't it? As long as there is competition and choices, it will create the most options for everyone, and everyone can choose what pricing level and usage level is best for them.
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chutz, 1 Feb 2011 @ 12:47pm

Re: Metered Bandwidth
As long as there is competition and choices, it will create the most options for everyone, and everyone can choose what pricing level and usage level is best for them.

The whole crux of this is that the CRTC decision is eliminating competition. No one objects to Bell charging their customers whatever they like for bandwidth and usage (though I would argue that they should only sell speed levels at a rate where they can afford to pay the usage for). The problem is that the CRTC has decided to let Bell block the competition from differentiating themselves to attract customers unsatisfied with Bell's offerings.
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Bengie, 1 Feb 2011 @ 1:14pm

Simple fix
If they can charge for going over, then we should get prorated for being under.

$1/GB

200GB cap, Only use 100GB, then they should pay me $100.

If I sign up for their service and I use 0GB, then they should pay me $200.

I can see making a business model out of this.
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Sygel, 1 Feb 2011 @ 1:36pm

Re: Metered Bandwidth
This is exactly the problem. They eliminate choice and competition by forcing everyone to use the same model.

What if the FCC ruled that every single ISP in USA had to use the same model as AOL? Would that be capitalism the American way?
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Big Al, 1 Feb 2011 @ 2:13pm

Re: Instead of metering
"How about throttling the speed of users who hit their caps, instead of outright charging for every bit?"

As mentioned earlier by another poster, here in Australia every ISP uses metering. However, almost every ISP does as you suggest which is throttle the connection when the cap is reached, normally to 64Kb/s, with no extra charges.
It stops you doing practically everything except email and casual surfing, but at least you don't get bills of $500+ at the and of the month (I'm looking at YOU, Telstra).
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Joe (profile), 1 Feb 2011 @ 2:13pm

Re: Re: Re: I hope metered plans don't last
Or raise the rates while giving worse service, as they have done to me. ;)
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JEDIDIAH, 1 Feb 2011 @ 2:54pm

The inconvenient truth.
> As long as there is competition and choices

...of which there aren't really any.
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Brett Glass, 1 Feb 2011 @ 2:55pm

Re: It is indeed about a 19th century business model
Don't listen to Mr. Frankston. When I me with him personally several years ago, he admitted to me that he was embarking on a personal vendetta to destroy all ISPs and telecommunications companies. His false claims about the hard working people of our industry - many of whom, like me, are making great sacrifices to roll out to the Net to people who need it - are simply lies intended to advance that goal. Frankly, he's a pathological loon who ought to be locked up.
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Anonymous Coward, 1 Feb 2011 @ 3:18pm

Re: Re: Re: Bad practice forced on competitors
$62/month for 265GB isn't that bad a deal.

That may seem okay to you, but in Europe and Asia it's ludicrously expensive. I'm in the UK and I pay �18 (~$29) for 24mbit. It's unlimited, subject to a FUP and isn't traffic shaped or throttled in any way. I don't know what the FUP is because I've never reached it. At most I've downloaded several terabytes in a month.

I have friends in other European countries who think my connection is abysmal and insanely expensive. They probably wouldn't believe you guys pay as much as you do for so little.

But then, I guess price goes down when you can choose from hundreds of providers...
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Canuckian, 1 Feb 2011 @ 3:58pm

Re: Nonsense
ZZZZZ

Spouting out pap means nothing; back it up with fact tweedle-dee. What ISP. What is your proof. Show me the numbers.

This is about going back to 1990s standards when technology has essentially removed bandwith issues.

To refute your claims, I state: fibre in Canada is 90% dark all the time, there is no bandwidth issue at all. This is smoke and mirrors.
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tasmot (profile), 1 Feb 2011 @ 4:16pm

Re: Re: Somebody is NOT Thinking It Through
Actually, I use OpenDNS to block ads for me. Cheap! Easy! And I only have to configure it once for every computer in my house.
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pepp, 1 Feb 2011 @ 5:04pm

you sir, are wrong
So you're saying its like Formula 1 cars.. lets make artificial barriers so we can advance technology, right?

Wrong. What happens in the end of the day is that for the next 10 years internet usage will be worse than it coulda been, and even if the rest of the world starts shaping their internet business model to shape Canada (yeah, right..), you still forced your users to 10 years of crap service.
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Brett Glass, 1 Feb 2011 @ 5:09pm

Re: Re: Nonsense
I would say that the credibility of someone with 20 years of experience and a great deal of expertise (I've been working on Internet engineering since it was called the ARPAnet) is much greater than that of someone who won't even sign his name.
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Anonymous Coward, 1 Feb 2011 @ 5:16pm

Re: not enough electricity
LoL no.
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pepp, 1 Feb 2011 @ 5:25pm

Re: It could turn into a nice fight
well said
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pepp, 1 Feb 2011 @ 5:31pm

Re: Re: It is indeed about a 19th century business model
Hard to believe that someone could point out the arguments of profit and service model, when in Portugal (pop - 10 mill), I can have unmetered fiber optics for 29 euro/month... and yes, our ISPs do make money.

and btw.. like someone said : cloud computing. Big companies will have it anyway (volume bandwidth discount) how about small companies?
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rosterman1, 1 Feb 2011 @ 5:39pm

Re: Re: Bad practice forced on competitors
Thank goodness for that. Hopefully they'll all come to their senses before it's too late.

By the way, the word you use for failing to keep something is spelled "lose". If you "loose(n)" something you make it "less tight" or "less confined". HTH.
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monkyyy, 1 Feb 2011 @ 6:15pm

Re: not enough electricity
compared to the energy savings of a 52 inch screen going down to a 20 inch screen for internet use, downloading in nothing
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Anonymous Coward, 1 Feb 2011 @ 6:24pm

Re: Re: Re: Nonsense
I wont sign my name because I work for a MAJOR national provider here is the US and I can assure you that the ISP's we provide connections to, do NOT pay 'per Mbps of bandwidth' at all. I deal with fiber customers every day who have 100M to 10Gig connections and I can assure you they pay one price each month no matter if they use it for an hour or run it full steam 24/7.
You must be getting gouged by your provider or you just like the thought of being able to gouge your customers.
Go blow smoke up someone else pipe.
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Jimmersd, 1 Feb 2011 @ 6:25pm

Network bandwidth suffering isn't the point at all..
It's because people are forgoing the overpriced digital cable offerings in favor of cheaper alternatives. The ISP/Cable providers are suffering from the same disease that they have infected the telephone service and content providers. That is to say, the ability of the average user to end run expensive packages. What comes around really does go around. Let's hope that the public at large is smart enough to not let them get away with this crap.
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Anonymous Coward, 1 Feb 2011 @ 6:30pm

Re:
No, I'm quite sure Metered Bandwidth doesn't protect Netflix.

Swing and a miss.
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Martin Focazio, 1 Feb 2011 @ 6:36pm

Metered Bandwith Means Ad-Blocking is a must
If you are paying by the Byte, they it is critical that you install ad-blocking software to reduce the bandwidth you use. See how well that helps companies depending on ad revenue for growth.
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Anonymous Coward, 1 Feb 2011 @ 6:54pm

Re: Re: Re: Bad practice forced on competitors
That is until you hit your cap...
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Jeremy2020 (profile), 1 Feb 2011 @ 8:31pm

Re: Metered Bandwidth
Except the people who 'use less' won't pay less than they are now.
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Brett Glass, 1 Feb 2011 @ 8:37pm

The above is proof that he's lying.
All wholesale Internet connections are billed by capacity - that is, monthly according to the number of megabits per second they can carry. And the rates are often quite high, even for the big guys. (Cellular providers, for example, may pay as much as us - $100 per Mbps per month - to reach a tower, especially in a rural area.) Folks, don't let these liars deceive you. Being an ISP is tough work, and bandwidth isn't cheap except in major urban centers. We would really like to charge a flat rate, but it's getting to the point where those flat rates would have to be more than most users will pay. So, we may be forced to usage based pricing simply to give consumers a reasonable monthly charge.
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here, 1 Feb 2011 @ 8:57pm

Re: Here In Australia.....
Comcast bought nbc and switched ceo's
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here, 1 Feb 2011 @ 8:59pm

Re: Re: Here In Australia.....
presidents* and thanks for the info
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Laurel L. Russwurm (profile), 1 Feb 2011 @ 9:06pm

It's all about control
The CRTC just allowed Bell -- Internet backbone carrier + ISP + Cell phone + Satelite TV + media owner ... Canada's national Newspaper -- to buy Canad's biggest TV network CTV.

Of COURSE they don't want NetFlicks.... they want to turn the internet into a single content provider TV network with a "pay here" button

The CRTC should be breaking Bell up not giving them the right to gouge the customers of their wholesale customers, and incidentally drive competition out of business.

It's so hard to argue because the very situation is so unbelievable.

Canadians, write letters to your MPs etc.
http://stopusagebasedbilling.wordpress.com/
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Anonymous Coward, 1 Feb 2011 @ 10:21pm

@10 your right in short term, but in canada since 2006 when this began 3 million have dropped using net accounts.
at HUGE high costs already of say 50$ per account you get the hint, it's nto making them money it's losing them a lot and this will kill more then 3 million it will erode it down even further they know this. ITS what they want and if you think poor people will buy your cable offering BCE your stupid to retarded.

you can only restrict a highways use so muchbefor epeople just stop paying the toll and either go around that toll highway or just stop using it. When your flight over it is already too expensive ( cable tv lets pretend) they do not return to the old model.

Consider this too.
I have already downloaded enough that i could live without the internet. Yea same old shows a bit would get boring but i have thousands a books and novels too. Many like me just dont see a 25GB cap as any value and would just leave so you get massive net losses in revenue. BCE whom ever had this idea your fired....even rogers allows teksavvy ten megabit unlimted....
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techflaws.org (profile), 1 Feb 2011 @ 10:23pm

Re: The above is proof that he's lying.
So again an example of how competition does the trick. In Germany all providers

Telekom
Vodafone
1&1
Alice
O2

have been offering flats for years and noone asked them to. Currently you can sign up for a 16000 kbit downstream monthly flat at 25,- Euro and it's getting cheaper.
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Gberg, 1 Feb 2011 @ 10:44pm

I've been saying something similar...
I've had discussions with friends and made some comments on blog posts that posit a similar idea, but with respect to piracy. The content providers, having grossly missed the boat, are essentially forcing consumers to make up for their failure to recognize the potential of the internet, pushing upon consumers the responsibility for protecting their products on the industry's behalf, and desperately trying to stave off irrelevance. The industry is in the decline phase of its life cycle, but is kicking and screaming to push the end point out indefinitely.
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Corey M., 1 Feb 2011 @ 10:50pm

You know im sick to death of all you fucking people that say that the big companies are trying to recoup money from the people that are "high bandwidth users" because it clogs up the network. Were as this may be true, too fucking bad. We pay monthly fee's for these exact fucking upgrades. Yet all the major companies do is charge us more, to give bigger returns to stock holders, and million dollar salaries to CEO's. I don't see how posting a 250+ million dollar profit for the year helps the networks. Instead they cry foul to regulators and the end user gets fucked right in the ass at the end of the day. And to those that run isp's that cry about this and how much they pay, you chose the buisness in a rural area, suck it up. No one cares how much you pay, what we care about is the CRTC pushing regulations that they clearly state they don't regulate. Its a sad state of affairs when the USA's ISP's put Canada's to shame.

Sorry for the foul language, its just that i, like many others, are tired of the whining about money. If shaw and the others can post multi-million dollar profits, then they have NOTHING to complain about.
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Mike Masnick (profile), 1 Feb 2011 @ 10:51pm

Re: Re: It is indeed about a 19th century business model
Frankly, he's a pathological loon who ought to be locked up.

Yup. Brett does his usual bit of making sure that any of his responses destroys all credibility by coming out with hyperbolic insults of anyone who disagrees with him.

This is why no one takes Brett seriously, though it's fun to see him show up in the comments of various sites with conspiracy theories about how Google is trying to take over the world.
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Mike Masnick (profile), 1 Feb 2011 @ 10:54pm

Re: Re: Re: Re: Nonsense
I wont sign my name because I work for a MAJOR national provider here is the US and I can assure you that the ISP's we provide connections to, do NOT pay 'per Mbps of bandwidth' at all. I deal with fiber customers every day who have 100M to 10Gig connections and I can assure you they pay one price each month no matter if they use it for an hour or run it full steam 24/7.
You must be getting gouged by your provider or you just like the thought of being able to gouge your customers.

While I certainly won't reveal who this person works for, I will confirm that the comment appears to come from a major provider, as stated.
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Jack, 1 Feb 2011 @ 11:36pm

Re: Nonsense
Written by Brett Glass in 2008
"Some parties claim that we should meter all connections by the bit. But this would be bad for consumers for several reasons."
http://www.brettglass.com/FCC/remarks.html
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Formin, 2 Feb 2011 @ 12:39am

Re: And about investing
Bell buying CTV .... that money should have went elsewhere
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Uncle B, 2 Feb 2011 @ 4:59am

The Cash Grab
Capitalists, Corporatists, out for a cash grab! They sit in Ivory Towers, and dream up Shiite like this to justify their very existence, while the arm-pits of the world suffer their indignations. The famous example is the French revolution. Now we see Egyptians in the streets, suffering from the same capitalist, imperialist mentality. As the number of unemployable - an uncounted factor in the U.S. mounts, the danger of the same sort of revolt grows. The proletariat, the peon, the patriot, the plebs, are strapped now, and their pockets are only so deep! As the natural resources dwindle, the Capitalist cannot make the dramatic kind of gains he is accustomed to, so he turns in his great greed, and inflicts austerity on the proletariat!
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DogWorld, 2 Feb 2011 @ 5:44am

Metered Bandwidth
At the end of the day every gigabyte of data delivered has a cost to bring to the edge (consumer, device, router, smartphone etc.). Some folks do it more efficiently than others. Bottomline is there is NO other utility that provides a flat rate. Look at gas and electricity. So the more data consumption maxes the network and shared resources (most cable coaxial is a shared resource within the complex), the only viable alternative is metered broadband or you will wind up with spotty delivery or no delivery. Word to the Wise.
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Anonymous Coward, 2 Feb 2011 @ 7:22am

Re: I hope metered plans don't last
I think this is what they mean by stifling innovation.
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Anonymous Coward, 2 Feb 2011 @ 7:23am

Wow, disregard that. This board doesn't handle replies to comments in a useful way.
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Jon, 2 Feb 2011 @ 7:46am

Re: Nonsense
Math to the rescue. $100+ for 1Mbps. Let's get ambitious, and say it's $200 for a 1 Mbps. That's $20,000 for 100 Mbps.
60 seconds * 60 * 24 * 30 = 2,592,000 seconds per month.

2,592,000 * 100Mbps = 259,200,000 Mbits of data, or 32,400 GB's of bandwidth for 20K.

32,400 GB's * $32/25GB = $414,720 profit, assuming you have enough subscribers (1000 ish). That's not bad, even if we go for your hyper-inflated $200 per Mbit, and take out infrastructure maintenance. It doesn't sound like you are going broke any time soon.
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Dave, 2 Feb 2011 @ 8:27am

Why assume an increase in prices?
Mike - Why do you assume that metered broadband will increase the cost of service? Metered broadband will likely reduce th cost for many users.

Also, where's the evidence about innovation stifling. Remember that the old AOL model was time metered. Bandwidth metering is much different.

My phone, electricity, and natural gas are all metered and my usage decisions are based on cost.

Thanks,
Dave
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Dave, 2 Feb 2011 @ 8:31am

Re: Nonsense
Flat rates assumes all users are average. We know this is not true. Why should I subsidize large bandwidth usere (or vice verso)?
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Dave, 2 Feb 2011 @ 8:34am

Re: Re: Instead of metering
So you would rather supply ration than price ration?
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dav, 2 Feb 2011 @ 8:38am

Re: Metered Bandwidth
agreed....not many economists on the board
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Dave, 2 Feb 2011 @ 8:40am

Re: Re: Metered Bandwidth
what evidence supports your claim?
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Anonymous Coward, 2 Feb 2011 @ 9:29am

Re: Metered Bandwidth
I can use the phone while watching cable 24 hours a day and the bill will remain a flat rate.
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Justin Olbrantz (Quantam) (profile), 2 Feb 2011 @ 10:59am

Re: Why assume an increase in prices?
"Why do you assume that metered broadband will increase the cost of service? Metered broadband will likely reduce th cost for many users."

Simple reason: it's never happened before. Metered broadband has been used in various places in the past and present, and when adopted it always serves to increase the maximum price without affecting the minimum price.

You are making the critical faulty assumption that the purpose of metered billing is to make people who use little pay little, and people who use much to pay much. It isn't, never has been, and never will be. It's to make people who use little keep paying, and people who use much pay more. It's to increase revenue, not redistribute it.
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fgoodwin, 2 Feb 2011 @ 3:51pm

Re: Re: I hope metered plans don't last
So metered rates are not acceptable in business?

So should we all pay the same flat price regardless of how much electricity we use? We should all pay the same flat rate regardless of much gasoline we use? Water? Food? Clothes? etc.

On the contrary, I would say metered pricing is the NORM in business, not one price for all you can eat.
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Justin Olbrantz (Quantam), 2 Feb 2011 @ 4:23pm

Re: Re: Re: I hope metered plans don't last
Metered pricing is the norm when there is a direct and more or less linear relationship between marginal cost and consumption. Every single one of those things you list has a nearly linear marginal cost that predominates the price it sells for.

Data has zero marginal cost. Capacity has a cost (though off the top of my head I'm not sure how linear the relationship is between capacity and cost). At best there's a very loose relationship between data and cost, in contrast to the very tight relationship in every single example you list.

This is why we're in the whole internet piracy situation. For the first time in the history of the world some goods (namely anything consisting of data) can be reproduced and distributed for practically zero marginal cost. This fact has directly led to an explosion of piracy.
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JeffR, 3 Feb 2011 @ 11:15am

Let's not mix our terminology
Let's be careful that we're all using the same terminology.

MBPS is a datarate. ISPs and such do tend to buy lines by capacity per second. That's exactly what 100Mbit or 10Gigabit lines are and why they're described as such.

Those lines cost no more or less to operate if they are 1% utilized or 99% utilized.

Paying 'per Mbps' is not the same as paying per megabyte of data transferred and we shouldn't confuse the two.
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Anonymous Coward, 3 Feb 2011 @ 12:37pm

Re: Re: Bad practice forced on competitors
They dropped the price to $4 to compensate, right?
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Justin Olbrantz (Quantam), 3 Feb 2011 @ 1:27pm

What is a fair price for Internet service?
Just ran into this article: What is a fair price for Internet service?

"To find out what is a fair price, I contacted several industry insiders. They informed me that approximately four years ago, the cost for a certain large Telco to transmit one gigabyte of data was around 12 cents. That�s after all of its operational and fixed costs were accounted for. Thanks to improved technology and more powerful machines, that number dropped to around 6 cents two years ago and is about 3 cents per gigabyte today."

I'm actually a bit surprised. As I said in this thread, data transfer has no marginal cost in itself, only the cost for the capacity plus other operational costs. But at $0.03/gig when all factors are averaged out, the fixed and operational costs are even lower than I was expecting (I was thinking along the lines of $0.05-0.15/gig).

For the record, I'm not truly against metered billing in itself. I simple have exactly 0 faith in ISPs to use it fairly, as they never have in the past. Were one of two conditions met, metered billing would be tolerable:
1. There is a free market in ISPs with strong competition to keep rates low. In the US 15% of the country has exactly 1 (broadband) ISP to choose from, and another 75-80% has exactly 2, which is not sufficient to guarantee strong competition.
2. Data rates are regulated by a neutral organization lacking regulatory capture. As it is now, rates are entirely unregulated; yet I can't say I'm inclined to trust people like the FCC or CRTC to be unbiased even if they did regulate rates.
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ltlw0lf (profile), 3 Feb 2011 @ 5:17pm

Re: Re: Nonsense
Flat rates assumes all users are average.

If you sell a pipe that is 100mBps, and you get upset because your customer is using 100mBps, you're doing it wrong. However, if you sell a user a pipe that is metered, and charge high bandwidth for the users who use large bandwidth, and say so on the contract, than so be it.

However, if you sell someone a flat 100mBps connection, and then decide six months later that you spent all the money you earned from a user on crack and hookers and not on updating your network, and now you are selling 30 people a flat 100mBps connection and they are using up the 100mBps supply and getting upset with you, switching to a metered plan without telling them is likely to get you sued.

I pay a certain amount of money for a flat rate internet connection which says I get a certain amount of bandwidth. If I am not using that bandwidth, then I am paying a lot for not using it. However, I am certainly *not* subsidizing someone who is using a lot of what they are paying for. The contract says I get what I get. If you don't like that model, then switch to a metered model. But don't go crying to the government if your competitors out-sell you because you were greedy and switched to a metered (and less consumer friendly model,) while they kept their consumer-friendly flat rate model.
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ltlw0lf (profile), 3 Feb 2011 @ 5:25pm

Re: Metered Billing = Death of Online Ads
When people have to pay for bandwidth, they are going to do everything within their power to use only what they want. That means ad blockers will become the norm, with people not wanting precious kb being wasted on advertisements. When everyone starts blocking ads, companies stop buying ads. Lots of new business models are stifled if not completely made obsolete.

And they will be more upset about the junk the ISP does too...is there any reason why an ISP isn't filtering out SMB on their networks, or any reason why they require a user to run connection software on their machines that regularly communicate back to the mothership (for support reasons, they say,) and who require said software to be installed on the customers' machine in order to handle support calls?

The ISP I use at home has reasonable limits, but if the ISP includes all of the traffic sent to your machine regardless to whether you asked for it or not, you're going to find a lot more pissed-off people upset that they are getting charged for bandwidth even when they take a month off.
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ltlw0lf (profile), 3 Feb 2011 @ 5:26pm

Re: Metered Billing = Death of Online Ads
When people have to pay for bandwidth, they are going to do everything within their power to use only what they want. That means ad blockers will become the norm, with people not wanting precious kb being wasted on advertisements. When everyone starts blocking ads, companies stop buying ads. Lots of new business models are stifled if not completely made obsolete.

And they will be more upset about the junk the ISP does too...is there any reason why an ISP isn't filtering out SMB on their networks, or any reason why they require a user to run connection software on their machines that regularly communicate back to the mothership (for support reasons, they say,) and who require said software to be installed on the customers' machine in order to handle support calls?

The ISP I use at home has reasonable limits, but if the ISP includes all of the traffic sent to your machine regardless to whether you asked for it or not, you're going to find a lot more pissed-off people upset that they are getting charged for bandwidth even when they take a month off.
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ltlw0lf (profile), 3 Feb 2011 @ 5:26pm

Re: Metered Billing = Death of Online Ads
When people have to pay for bandwidth, they are going to do everything within their power to use only what they want. That means ad blockers will become the norm, with people not wanting precious kb being wasted on advertisements. When everyone starts blocking ads, companies stop buying ads. Lots of new business models are stifled if not completely made obsolete.

And they will be more upset about the junk the ISP does too...is there any reason why an ISP isn't filtering out SMB on their networks, or any reason why they require a user to run connection software on their machines that regularly communicate back to the mothership (for support reasons, they say,) and who require said software to be installed on the customers' machine in order to handle support calls?

The ISP I use at home has reasonable limits, but if the ISP includes all of the traffic sent to your machine regardless to whether you asked for it or not, you're going to find a lot more pissed-off people upset that they are getting charged for bandwidth even when they take a month off.
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ltlw0lf (profile), 3 Feb 2011 @ 5:27pm

Re: Re: Metered Billing = Death of Online Ads
Sorry for the triple posts, I am not sure what happened here.
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Polo Outlet, 5 Aug 2011 @ 6:36pm

Polo Outlet
It's great to hear from you and see what you've been up to. In your blog I feel your enthusiasm for life. thank you.
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