Broadband CEOs Admit Usage Caps Are Nothing More Than A Toll On Uncompetitive Markets

from the pay-more-for-less dept

Time and time again, we've noted how the broadband industry's justifications for usage caps just don't hold water. And while the industry used to falsely claim that caps were necessary due to congestion or to save us all from the bullshit "exaflood," the industry has slowly but surely stopped using any justification at all for what's really just glorified rate hikes on uncompetitive markets. These days, big ISPs like AT&T and Comcast looking to impose usage caps either give no justification whatsoever, or pretend they're doing consumers a favor by providing more "choice and flexibility."

But over the last year, we've seen more and more broadband industry executives making it abundantly clear that usage caps just aren't necessary. For example, Dane Jasper, CEO of independent California ISP Sonic, this week made it clear that there's simply no good justification for caps as the cost to provide broadband services continues to drop. Apparently, you'll be shocked to learn, the "exaflood" was just a bogus bogeyman concocted to help ISPs scare regulators into turning a blind eye to price gouging:

"The cost of increasing [broadband] capacity has declined much faster than the increase in data traffic," says Dane Jasper, CEO of Sonic, an independent ISP based in Santa Rosa, Calif.

Jasper, of course, has reason to challenge his much larger rivals. However, he also backed up his argument with real numbers. A few years ago Sonic (formerly Sonic.net) spent about 20 percent of its revenue on basic infrastructure. Since then, the cost of routers, switching equipment and other related gear declined so much that Jasper says the company's infrastructure costs are now only a bit more than 1.5 percent of its revenue.

For this reason, Sonic has no plans to impose data caps, according to Jasper.

And though Sonic tends to have more consumer friendly policies overall, Jasper's not alone in admitting this. Frontier Communications, growing at an astounding rate after recently acquiring Verizon's unwanted Texas, California, and Florida broadband customers, this week stated it also has no plans to impose caps anytime soon. Why? Well one reason is they bungled the merger so badly they're walking a PR tight rope right now. But company CEO Dan McCarthy also makes it clear the cost to deliver broadband is dropping, making caps unnecessary:

"We want to make sure our products meet the needs of customers for what they want to do and it does not inhibit them or force them to make decisions on how they want to use the product. The nice part of technology and what has happened is that transport costs continue to decline and by putting in the packet optical fabric it takes away a lot of those constraints," McCarthy said. "There may be a time when usage-based pricing is the right solution for the market, but I really don't see that as a path the market is taking at this point in time."

Even companies that do plan to impose usage caps have occasionally admitted that caps are completely untethered from network or financial realities.

St. Louis-based cable operator Suddenlink has caps ranging from 250 GB to 550 GB, depending on speed. Its customers pay the increasingly-standard $10 per each additional 50 GB consumed, and have the "option" of paying an additional fee to avoid usage caps entirely. Yet outgoing Suddenlink CEO Jerry Kent made it abundantly clear on a conference call last fall that the days of investing serious amounts of capital into the network are long gone (especially for cable, where DOCSIS upgrades are relatively inexpensive). These days, the name of the game is milking your captive customers for all they're worth:

"I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” Kent said. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down."

These are three CEO admissions worth remembering as companies like AT&T (which just started heavily capping its customers last month) and Comcast (whose usage cap "trials" expand at a rabid clip) push whatever bullshit, half-baked excuse is in vogue this month for what's effectively just a toll on captive broadband customers.

Filed Under: broadband, broadband caps, competition, dane jasper, data caps, exaflood, price gouging, usage caps
Companies: at&t, comcast, frontier communications, sonic, suddenlink

DailyDirt: Speedy Connections In The Future

from the urls-we-dig-up dept

Who doesn't like a fast broadband connection? The faster, the better! The only problem seems to be that there are some capacity limits with current technology. Details, details. But what if there were some technologies that could vastly increase those capacity limits? There might be some awkward situations where fiber-based internet service wasn't as fast as a wireless connection. Perhaps ingrained data cap pricing tiers would still stick around? Here are just a few developments that could bring much faster broadband (someday, maybe).

• Alcatel-Lucent's Bell Labs set a broadband record of 10 Gbps over traditional copper telephone lines in 2014. There are some practical limitation, such as the distance couldn't be too far and the copper line quality probably needs to be a bit better than the 100yo stuff running into some homes. Still, the work is pushing the limits of copper further, and there are some predictions that 40 Gbps speeds over copper are on the way. [url]
• Researchers at Columbia University have created full-duplex radio integrated circuits that could effectively double frequency spectrum resources. Devices made with this technology could transmit and receive data over the same frequency at the same time, but obviously this capability is going to take some time to get into commercial gadgets. [url]
• The orbital angular momentum (OAM) property of electromagnetic waves could provide nearly limitless data capacity. It might take a really, really long time to see this get out of the lab and into commercial products, but when/if it does, we might never hear about exoflood FUD again. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post via StumbleUpon.

Filed Under: bell labs, broadband, copper, data cap, exaflood, fiber, oam, orbital angular momentum, wireless

Whatever Happened To The Exaflood?

from the gone-baby-gone dept

If you remember, about five years ago, a bunch of astroturfing and front groups for the broadband companies started spreading this myth that the internet was facing a catastrophe known as the the exaflood, in which internet traffic would swamp capacity and the internet would sputter to a crawl. They talked about things like "brown outs" where so much traffic would make the internet difficult to navigate. Of course, it was all FUD and scare tactics to hide the real intent: to allow the telcos to put more tollbooths on the internet, to double charge some popular internet companies, and to generally try to avoid investing in basic infrastructure. Of course, it was easy to debunk those claims, but five years later, Broadband Reports takes a look at some of the latest data to note that the feared exaflood never showed up, and the predictions of clogged pipes never appeared -- and the data on internet growth shows little likelihood of that ever happening.

Cisco's latest numbers are an ever further cry from what telecom sector lobbyists and think tankers were predicting in 2010 and before, when they were using a looming "exaflood" to scare regulators and the press and public into buying into bad telecom policy. Companies like Nemertes Research and The Discovery Institute (the latter a PR firm paid directly by carriers, the former long accused of having a rather cozy relationship with AT&T) insisted we'd be seeing Internet "brown outs" by this point courtesy of unsustainable growth rates of up to 100% or more.

The scary predictions were effective. Said lobbyists, think tankers, astroturfers and "fauxcademics" convinced many people that if the telecom industry wasn't given "X" (X being anything from fewer consumer protections and more subsidies to the right to bill by the byte or avoid network neutrality rules), that the Internet would collapse. That obviously never happened and intelligent engineers and networks adjusted, but few of the people who massaged data for their own financial ends over the last five to eight years were ever really held accountable.

Of course, there's always more fear and FUD to go around, so expect plenty more stories about looming problems if we don't give the big broadband guys whatever anti-competitive thing that they want going forward...

Filed Under: broadband, exaflood, fud, hype, telcos

Should We Add Bandwidth Hogs To The Myth List With That Impending Exaflood?

from the life-ain't-so-bad,-you-know dept

While telco lobbyists (or paid "think tank" commenters) have a long history of pushing the totally bogus concept of an "exaflood" of traffic that will take down the internet, more recently they've been pushing this idea of "bandwidth hogs." That is, they say that even if there isn't really a big threat to backbone bandwidth (which they had claimed originally) there is still a problem with "bandwidth hogs" at the last mile, using up way too much bandwidth. And, for that reason, they insist that ISPs should be able to cap and meter broadband, to make sure that the "low level users" aren't subsidizing the "bandwidth hogs." There are two big problems with this claim. First... in none of the experiments with metered billing have the "low level users" received a discount. Instead, they've kept paying the same amount, and it's just that the ISPs have tried to jack up the rates on higher bandwidth users.

But, an even bigger problem may be that the very idea of "bandwidth hogs" may be a myth (found via Slashdot). Benoit Felten is smashing that myth, in noting that there are certainly some folks who use more bandwidth than others, but contrary to claims from ISPs, he hasn't seen any evidence that they're causing any harm or congestion on the network. So he's presented a challenge to telcos to send over data that he can analyze to prove him wrong.

Filed Under: bandwidth, bandwidth hogs, benoit felten, exaflood

No, The Internet Isn't Running Out Of Bandwidth

from the stop-worrying-about-it dept

Nemertes Research has a history of putting out fear mongering reports about the coming bandwidth flood that will kill the internet. So I pretty much ignored the news that it had come out with another one, which the press is happy to report without any hint of skepticism (or noting that Nemertes is funded by telcos who stand to benefit from fears of a bandwidth glut). However, people keep submitting it, so let's just point out, once again, that stories of a coming "exaflood" of traffic are completely bogus. Actually research from those who have seen the data has shown that there is no problem and the growth rate is actually slowing. This has been widely reported. And yet, Nemertes still insists that we're running out of bandwidth? Don't believe it. Update: Someone from Nemertes stops by in the comments to say that this isn't new research, and that the particular news report "took great liberty with his story." He also says that they agree the internet is not running out of bandwidth, but they are worried about last mile bandwidth.

Filed Under: bandwidth, exaflood
Companies: nemertes

Oh No, Now The Rapid Internet Growth Is Going To Use Up All Our Electricity

from the extrapolations-are-fun dept

We recently pointed out yet another telco-funded study warning about how the internet was going to be overwhelmed by massive traffic growth if the government didn't step in and give telcos everything they wished. However, the University of Minnesota's Minnesota Internet Traffic Studies (MINTS) has responded to the report noting, yet again, that the data put forth by the telcos is totally overblown. The actual evidence suggests internet growth is not nearly as rapid as the original report stated and, in fact, there's substantial evidence that the rate of internet usage is slowing. Just as we've seen from various earlier studies, it appears that regular upgrades to equipment, rather than wholesale gov't handouts to telcos, should be more than enough to keep the internet humming.

But don't be surprised to start seeing other fear tactics come into play. For example, an anonymous reader sent in news of a report coming out of Australia, warning that we shouldn't just be worried about bandwidth running out, but that all the energy it takes to run the internet will now be putting a strain on the electric grid. Of course, that seems to assume the same rapid pace of growth that the original (incorrect) report claimed, so I don't think we need to worry about our electricity running out due to people downloading too many videos any time soon. But, still, you should probably expect to see such arguments show up coming out of politicians in the very near future.

Filed Under: bandwidth crunch, electricity, exaflood, internet

Telcos: The Internet Will Collapse If The Gov't Doesn't Gives Us Lots Of Money

from the proof,-please? dept

For a while now, we've been noting that whenever you hear people warning about the impending broadband crunch, it's politicians, consultants or lobbyists. When you actually talk to technologists, they point out that there's no problem and that normal upgrades will keep everything just fine -- even without having to do any kind of traffic shaping or violation of net neutrality.

Yet, that won't stop the lobbyists, consultants and top marketing execs from claiming otherwise. A trade group heavily funded by AT&T is out yet again, warning that the internet will collapse by 2012 if "something" isn't done -- with that "something" being basically big government subsidies to the telcos. Consider it the telco bailout plan of 2009. Hell, if we're already bailing out Wall St. and Detroit, why not telcos as well?

Filed Under: bandwidth crunch, broadband crunch, exaflood, net neutrality, subsidies, telcos

Once More, With Feeling: The Internet Isn't At Risk Of Running Out Of Bandwidth

from the no-exaflood dept

For years, we've been hearing telco execs, telco lobbyists and politicians screaming over the coming death of the internet due to an "exaflood" of bandwidth, as things like internet video and bittorrent totally overwhelmed the internet infrastructure. There was little proof that this was actually an issue, and plenty of evidence suggesting that ordinary infrastructure upgrades would more than handle all expected growth. And, in the last few months we've been seeing more and more public reports supporting this position. In August alone we saw two separate reports noting that internet growth was actually slowing rather than increasing at an alarming rate.

And now there's a third such report, looking at internet backbone traffic and noting that there's little to worry about:

For the second consecutive year, the rate of underlying international Internet capacity deployment outpaced global Internet traffic growth, leading to lower utilization levels on many Internet backbones. Between 2007 and 2008, average traffic utilization levels decreased from 31 percent to 29 percent while peak utilization fell from 44 percent to 43 percent.

Yet, if you listen to telco lobbyists, execs and politicians, they'd have you believe that over the past couple of years, the growth of BitTorrent and internet video was flooding the networks. Hopefully, with so many reports pointing out the opposite, politicians will finally start pushing back the next time a lobbyist or exec starts claiming that the internet is at risk of running out of bandwidth.

Filed Under: bandwidth, bandwidth crunch, exaflood, studies

ISP Admits Internet Traffic Is Actually Declining

from the but-what-about-the-exaflood? dept

For quite some time, we've been pointing out that all the fear mongering from lobbyists and politicians about a coming "exaflood" of bandwidth that will wipe out the internet unless ISPs are allowed to double charge for the same bandwidth, is something of a myth. Instead, it turns out that traffic appears to be slowing its growth trajectory somewhat. The latest to agree with this is Cogent, who supplies plenty of bandwidth, but actually found overall traffic decline last quarter. Apparently, the unstoppable march of bandwidth consumption isn't as threatening as some would have you believe.

Filed Under: broadband crunch, exaflood, internet traffic
Companies: cogent