The Coming Internet Video Crash 419
snydeq writes "First, it was data caps on cellular, and now caps on wired broadband — welcome to the end of the rich Internet, writes Galen Gruman. 'People are still getting used to the notion that unlimited data plans are dead and gone for their smartphones. The option wasn't even offered for tablets. Now, we're beginning to see the eradication of the unlimited data plan in our broadband lines, such as cable and DSL connections. It's a dangerous trend that will threaten the budding Internet-based video business — whether from Netflix, Hulu, iTunes, Windows Store, or Google Play — then jeopardize Internet services of all sorts. It's a complex issue, and though the villains are obvious — the telecom carriers and cable providers — the solutions are not. The result will be a metered Internet that discourages use of the services so valuable for work and play.'"
Re:Utility (Score:5, Interesting)
It needs to be regulated like a public utility.
Or at least decoupled from the monopolized infrastructure so that other providers (that do not own an exclusive and non-negotiable cable hookup to your house) can compete.
Wrong (Score:4, Interesting)
Commentators (including myself) have been predicting the end of the internet (as we know it) for almost two decades now -- but I (and all the others) have been proven wrong.
Yes, the demand for bandwidth is growing at a huge rate -- but so is the provisioning of that bandwidth.
If you live in a country like New Zealand (where I live) you get used to living with capped data plans -- they're just a part of life and, to be totally honest, it's never really been an issue for me -- despite the fact that I do a *lot* of online video, as you can tell by my Youtube Channel [youtube.com].
Sure, the arrival of IPTV will change the picture a little, as TV programming starts to make up an increasingly high percentage of the total traffic -- but hey, nothing's free and many people pay for cable so why not pay for IPTV in a way that includes the bandwidth you use as well? (as will soon be the case).
Uncapped internet? Never had it, never really needed it. I have 120GB a month and that's all I need -- perhaps because I don't like the kind of dross I find on TV anyway. Quality of content is *far* more important than the quality of the image.
This has been a long time coming (Score:3, Interesting)
With so many people ditching Cable and Sat TV plans in favor of an Internet-Only household, and with the Cable Companies being the majority providers of Internet Access, of course we had to see this coming.
Vz and Comcast aren't going to sit idly by while their subscribers ditch the media services and keep only the delivery service, and spend their money at Netflix and other media services.
The question is, will it be considered anti-competitive for them to allow unlimited delivery of their own media over the pipe, while charging extra for media from their competitors? I certainly think that's anti-competitive, and where net neutrality needs to come into play. But, I doubt we'll see it happen, at least in the US.
Re:Free market! (Score:5, Interesting)
People are happy to pay money for a service that performs as advertised.
My tiers bill out at $36/Mbit. It sounds steep compared to a 10Mbit for $80/mo from the local incumbent. Except that the incumbent can't actually provide that speed, nor will they let you use your connection to the fullest.
Re:Free market! (Score:5, Interesting)
Once everybody was captured (and by a couple of years ago pretty much everybody was), all they had to do was start turning the screws.
People, I've been telling you for years, here on Slashdot, to write the FCC and your congresscritters, and fight the mergers and acquisitions and takeovers as anticompetitive. ESPECIALLY when carriers and content providers were proposing deals together. But few of you did.
Now you get to live with the results.
I hate to say "I told you so", but I did. The reason I hate it is because I have to live with it too.
Maybe in the USA, not elsewhere. (Score:2, Interesting)
I'm in Australia. Internet access was once metered by the hour ($10 per hour dial-up) then prices fell to under a dollar an hour. Then I got ADSL in the very early 2000s with a whole gigabyte over a month, always-on. Then it increased to three per month. Then ten, fifteen, forty, then a jump to 200, and in 2012 I'm 'limited' to over a terabyte a month.
A fucking terabyte.
I can't stream that much video (even in good quality) and actually watch it in a month without quitting my job and family time and attaching myself to the couch with cheese & bacon balls and becoming an obese live-in hermit.
Oh, and the cost for those plans is a third it was when I was on 1GB quotas.
Yes, it came from an awful over-priced start, but the goods for cost is growing and keeps growing here.
Re:Utility (Score:5, Interesting)
It needs to be regulated like a public utility.
You mean like water, where you pay for what you use? Or electricity, where you pay for what you use? Or gas, where you pay for what you use?
Yes. Exactly like that.
I don't watch movies over the internet very often, and I don't keep my bandwidth at capacity 24/7 downloading stuff, and I certainly don't want to be subsidising those that do.
Screw the business models of those "budding internet video businesses". I'm not (indirectly) paying for a service I don't use just to protect a poorly thought out business plan. This isn't health or something important, it's entertainment, and you can pay for it yourself.
Re:Yes (Score:2, Interesting)
You can't have a monopoly or a monopolistic cartel without government intervention. "Free market monopolies" are a misnomer, as the company that has provided such a high quality, low cost product that no-one can compete with them must continue to provide such quality, or risk new competition arising.
However, the OP is right that it should be like a utility, but utilities need not be regulated, nor be given exclusive rights to some geographical area (which is what you would get with the imposition of a utility model). No, the PROVIDERS need to realize that they are utilities, and price data according to market prices, close to the marginal cost, which is very VERY low. It should be like electricity--no-one really cares about using electricity, nor is there any demand for "unlimited monthly" electricity, but by paying for it by the amount of usage, you limit its consumption while giving proper incentive for construction of additional capacity.
Re:Yes (Score:5, Interesting)
Collusion, oligopolies, and high barriers to entry for certain enterprises (once established by first-to-market types, or when invested in by rich types) mean a free market does indeed lead to monopolistic abuses.
Of course, all you have to do is look at human history and the natural world to see that this is the case. Mafias, gangs, cliques, pecking order, castes, nobility, feudalism, etc, etc... It's the nature of all social organizations that some will become strong and leverage that strength against others and some who ultimately become utterly dominant.
Establishing rules and enforcing them, (i.e., a regulated society that values more opportunity for more members of society and a more level playing field) is the ONLY way to circumvent this tendency.
Re:Free market! (Score:3, Interesting)
The routers and fibers carrying the internet backbone are upgradable and there are plenty of routes.
The problem comes when a incumbent drops 200 households on a single gigabit line. You can do the math. Although everyone is not using their full connection, at some point there is a limit.
I agree I am a middle man. The rates I pay are in the $50/Mbit completely unlimited. When I started a year ago, the rates were closer to $90/Mbit. This shows the costs for bandwidth are dropping (if you can afford to buy enough).
Re:Yes (Score:5, Interesting)
The flaw in this is that 'early' means different things.
The Bells got into telephony early, and dominated. The Breakup tried to remedy the monopoly, and did so, though the aftermath was a new set of problems.
When cell service came to be, the government decided the Bells and Baby Bells would noobe allowed to dominate this market, so they created 'A' service and 'B' service, 'wireline' and 'non-wireline'. Does anyone remember which was which? And they oermitted CDMA and TDMA to slug it out. We now know TDMA as GSM, its successor.
Data service brought an entirely new set of options, and the telecoms were the logical leaders, going from slow speed leased lines to faster, and faster. Proprietary protocols, DDS2, T1/E1, and all the T3 and OC- speeds. SONET, MLPS, etc. The telecoms fought and lost the battle to keep their copper and fiber to themselves. But the CLECs failed to account for other players.
Cable companies jumped in and provided data service on their networks. Power companies toyed with it, but failed to deliver working solutions.
Today, Internet service is pretty much split into three providers in most areas, cable, telecom (DSL) and wireless. In the rural areas, the providers are either limited by range or nonexistent, but where service is avaialble, mostly it has 2-3 players. Please, before you flame me with the exceptions, it's generally true that cable reaches a little further than DSL, and wireless is generally limited to the cell footprint. Satellite is a poor quality solution, and is not germane to my examples. FIOS and other telecom or higher speed non-copper services only add competitors, though not many.
To turm Internet service into a utility in most of the US is to ignore the reality that there is a competitive market, and the utility model doesn;t seem to fit well, at least not to me.
BUT...
This is an issue of The Commons. And net neutrality is a disguised Commons issue.
If the Internet providers are still also providing other services, they have potential incentives to limit one in favor of the other. Case in point, cable services.
Video over the Internet is insanely popular for several reasons, but two come to mind as direct threats to cable providers: On-demand video, and non-real-time video.
On-demand video, like Netflix, competes directly with cable company movie channels, both the HBO model and on-demand/rental channels. this is revenue lost to them, and Netflix is literally eating their lunch.
Non-real-time video I think of as the Hulu model. While cable companies have DVR solutions, again Hulu takes the bread from their mouths. Direct competition.
BitTorrent is just another delivery method, with the added unpleasantness of rampant copyright violation, which then gets the cable companies in hot water with their bread and butter video providers.
Add in another factor - video is a bandwidth hog, at least more than even Flash gaming. Probably even PC gaming. This increases their network costs, and logically so, at every part of their network.
You could make the case that Internet service is a significant threat to the cable companies, yet they are stuck with being their own worst enemies, for now. too much money to turn down, at least at the moment.
Notice I haven't even mentioned the VOIP services they got into to scrape mor erevenue from their networks, and the threat of Skype etc, and the challenge of various videoconferencing solutions such as Facetime?
So video, to the cable provider, is a necessary and detested evil. The solutions? Traffic shaping, packet inspection, etc.serve to make the competitive services less useful, and discourage them. Bandwidth caps can nail Netflix and Hulu. Add speed caps, and the cable cos. can deal their competitors a blow. But users then might flee. To where? Well, DSL providers are not much better behaved. Any other provider with a relationship to broadcast media is also of divided loyaltes.
DSL providers are limited in
Re:Yes (Score:4, Interesting)
No, he's telling you that politicians (i.e. the FCC in the US) are the reason even a company like Apple can't just take their cash and launch their own telecom and have any chance of competing alongside the Big Three - because they control the spectrum allocations. Doesn't matter how many iPhone 6s you sell when you only get enough spectrum to support half a million of them.
Same with a cable company. Or a railroad. Or a power company. There are plenty of industries where the government stifles competition.
Re:Yes (Score:3, Interesting)
Somalia has the most advanced wireless infrastructure in sub saharan Africa...
It's also one of the best places in the world to get kidnapped, hijacked, pirated, or just shot (or beheaded) for no particular reason.
I'm sorry---you were saying...?
Re:Yes or reply to someone who ignored Adam Smith (Score:4, Interesting)
Romania.
It does have and will probably always have unlimited data plans. For mobile devices there are speed caps once you go over a certain threshold, but that's it. The difference between subscriptions is basically the threshold size (6 GB, 20 GB, 100 GB, etc).
For regular broadband (CAT5, fiber optics and so on) there's no threshold and probably there won't be any, because ISPs here are in direct competition. There's no location I know of in Bucharest where you can't choose between at least 3 different ISPs. There are offers for new subscriptions, e.g. 6 months for 50% price or 3 free months, etc.
RDS (my ISP) offered me a free as in beer 3G dongle which allows unlimited traffic with no monthly threshold. I have downloaded a few ISOs through 3G when their regular line was down a few weeks ago at about 4 Mb/s sustained throughput.