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Former FCC Boss: Data Caps Not About Network Congestion 238

Posted by Soulskill
from the imagine-that dept.
An anonymous reader writes "Broadcasting Cable reports on comments from Former FCC chairman Michael Powell (now president of the U.S. cable industry's trade association) confirming what many have long suspected: data caps on internet service aren't just about network congestion, but rather about 'pricing fairness.' 'Asked by MMTC president David Honig to weigh in on data caps, Powell said that while a lot of people had tried to label the cable industry's interest in the issue as about congestion management. "That's wrong," he said. "Our principal purpose is how to fairly monetize a high fixed cost." He said bandwidth management was part of it, though a more serious issue with wireless.' Powell went on to say that ISPs had huge up-front costs which had to be allocated out to consumers, and those consumers were familiar with usage-based fees from paying their power bill or buying food. He was part of a panel with three other former FCC chairs. Dick Wiley agreed with his cost argument, adding that the marketplace was responding better than new legislation could. Michael Copps thought the FCC could question data caps a bit more, but wasn't opposed in principle. Reed Hundt said he wants the FCC to focus on getting better, faster, cheaper internet to 100% of the population."
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Former FCC Boss: Data Caps Not About Network Congestion

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  • by Anonymous Coward on Saturday January 19, 2013 @10:32AM (#42633465)

    Yeah, sure. All the ISP wants to do is be "fair" to its customers.

    When a large company says it's trying to be "fair", you should hold on to your wallet tightly!!

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Fair means they'll leave the customer with some money for other corporations to fleece.

      • by Moraelin (679338) on Saturday January 19, 2013 @11:09AM (#42633601) Journal

        Fair means they'll leave the customer with some money for other corporations to fleece.

        I don't think it means even that. In fact, I don't think "fair" was ever meant to mean "for you".

        From my subjective experience just means "we want more money". The idea is that what they're already getting is so incredibly unfair, when they could be getting more with just a little PR, disinformation and maybe a little collusion. Why, the CEO is probably still driving a Mercedes, while his neighbour is driving a Bugatti Veyron. Can you imagine how unfair that is?

        Sarcasm aside... Not that it's necessarily a bad thing or evil. They're expected, and indeed the system is such that they have a legal obligation, to make as much money as possible for the investors. Not fleecing you as hard as physically possible, would be a breach of that obligation. Whether you have some money left after that, is more of a side-effect, than intended. Indeed, it would be a breach of trust if they actually intended to take less money for fairness sake.

        I suppose the system just works. Might as well enjoy it. But the corollary is that whenever some large company is talking about something being for your own good in any way, better bring your own lube, they want to shaft you. They're supposed to, after all. Some just are more subtle than others.

        • by tqk (413719) <s.keeling@mail.com> on Saturday January 19, 2013 @12:43PM (#42633927)

          I suppose the system just works.

          I'd allow that it functions, yes.

          I remember the days when corps constantly worked at lowering their prices and increasing efficiency, all in order to compete for customers. Now, NorthAm telecoms is Balkanized into a few monolithic corps who don't need to care about competing; in many markets they have no competition to speak of. In Canada we have Bell, Telus, Shaw, Rogers, and they only tokenly try to appear to compete in each other's market area (territory). USA has AT&T, Verizon, Sprint, T-Mobile, and I've read lots of stories from people saying that in their area they have only one of them to pick from. Whole cities have tried to roll out their own municipal networks to fill the gap, and they end up in lawsuits attempting to prevent them from doing it. The Google GBit rollout has proved how possible it is. That's not the game the telecom monoliths want to play. They want to milk us for every penny they can get, not maximize fair service for a fair price in competition.

          Compare Euro telecoms access and rates to NorthAm's, and it's pretty easy to say it's a rigged game. Our regulators have been helping them do it, not forcing them to compete on level playing fields.

          • Bait and Switch (Score:5, Interesting)

            by Tenebrousedge (1226584) <tenebrousedge AT gmail DOT com> on Saturday January 19, 2013 @02:54PM (#42634579)

            Why are you surprised?

            There are a couple fundamental issues with capitalism that are failing to be addressed here: monopolies, and natural monopolies.

            Capitalism really is less about competition and more about accumulation of capital. The competitive behavior is the goal, but it comes with the built-in problem of monopolies. You can't allow people to 'win' this particular game. Taken to an extreme, you might end up with one company that simply owned everything.

            Capitalism in this sense is kind of a bait-and-switch. We're sold on the idea of an efficient competitive marketplace, but end up with monopolies and rent-seeking.

            The problem of natural monopolies is even worse. Your ability to start a competing business is almost entirely a function of how much initial capital it takes to enter said market. It's far easier to start a restaurant or web company than to start a company that lays undersea fiber optic cable. This is why people talk about 'barriers to entry' as a bad thing: they reduce the efficiency of the market. Further, there are some services where competition would have negative utility -- no one really needs multiple companies laying water, power, or sewage lines to their home.

            The answer to both of these problems is government. The government's purpose is to prevent or eliminate these market failures.

            With natural monopolies, there is no real purpose behind allowing them to make a profit. It's a form of taxation, and can justly be called a theft from the public. These markets are the natural purview of government.

            We have a slightly larger toolbox for dealing with large companies. We can break them up entirely, levy progressive business taxes, or subsidize potential competitors.

            We need to start divorcing the idea of competition from the idea of capitalism: they're not synonymous. Yes, I am anti-capitalist -- but very pro-competition. Which side are you on?

            • Re:Bait and Switch (Score:5, Insightful)

              by tqk (413719) <s.keeling@mail.com> on Saturday January 19, 2013 @10:47PM (#42636757)

              I'll tell you up front, your and my viewpoints are polar opposites from each other. Where you see capitalism inevitably trending to larger and larger monolithic and fewer players, I see government meddling as the cause of that. Where government isn't interfering, smaller and more nimble outfits can run rings around the entrenched dinosaurs. Where government is allowed to interfere, those dinosaurs buy favours and protectionism and regulations from government, stifling those little innovators from interfering in the dinosaurs' turf.

              I can accept that you likely need a government for things like WWII, the Manhattan Project, & etc. As for regulating food production and distribution & safety, it's idiotic. Informed consumers and competition can do that much better at a fraction of the cost.

              It takes fifty miles for a supertanker to turn around. A cigarette boat can transport millions of dollars in illicit cargo far more nimbly and efficiently.

        • indeed the system is such that they have a legal obligation, to make as much money as possible for the investors.

          This is untrue, or every time a corporation made a charitable donations its CEO would get sued and/or jailed.

          But if you'll provide a link to the law that says so I'll admit I was wrong.

    • by Hentes (2461350)

      Corporations are not good or evil, they only want profit. And in this case, a fair pricing [wikipedia.org] is also more profitable.

      • "Corporations are not good or evil, they only want profit."

        Hahaha. That's funny.

        Saying that good and evil don't apply is just so much nonsense. There are both good and evil ways to make a profit. For example, I think most people would agree that charging market price for a commodity is generally good, while selling children as sex slaves is evil.

        And there is a whole spectrum of things in between.

    • Don't like it? Don't deal with that company.

      • by cynyr (703126)

        So I have a choice of comcast or century link here in my apartment. Partly due to the city, and partly due to the apartment building. This means that I chose the lesser of two evils.

    • by Solandri (704621)
      Actually, there is a legitimate argument here for fairness. If they're charging each customer $50/mo, and one customer is using 1 GB/mo while another is slurping 500 GB/mo, yes there's a fairness issue.

      But the problem with the fairness argument as they're making it is that their reaction does not indicate they're actually worried about fairness. If you're charging each customer $50/mo and see an inequality is use, you make it fair by raising your price on the guy slurping 500 GB/mo, and lowering your p
  • by alen (225700) on Saturday January 19, 2013 @10:33AM (#42633467)

    I have Tim Warner cable and have unlimited
    Fios is unlimited too

    And how much data is it to get past the cap? I stream all my TV. Only have Internet. And I use less than 200gb per month. So far I'm at just over 50 for this month

    • by Sponge Bath (413667) on Saturday January 19, 2013 @10:35AM (#42633487)

      I have Tim Warner cable...

      Do you watch it on your Magnetbox TV?

    • Bendbroadband, in Bend, Oregon does. 150Gb with $1.50 per 1Gb over.
  • by Anonymous Coward on Saturday January 19, 2013 @10:35AM (#42633483)

    So they can only blame themselves. I remember back when dial-up was the option, and there were packages with time-limits. But then a few ISPs started offering unlimited time, and as we moved to always-on, they continued to not set limits. 15 years later, they decide limits are what they want, and they're shocked people react negatively?

    • by sumdumass (711423) on Saturday January 19, 2013 @11:36AM (#42633719) Journal

      All they have to do is offer a pricing tier and be honest in their advertising.

      People will pay for more when they know what they are getting. Cell phone companies do it.

    • by jythie (914043)
      There is an important change though. In the days of dial up you had effective competition, so companies had to, well, be competitive. Now in many regions the local ISP is an effective monopoly, so their only competition is 'no internet'.
  • by localroger (258128) on Saturday January 19, 2013 @10:35AM (#42633485) Homepage
    I have to use wireless because there is no reliable wired service to my house but I'm practically underneath a cell tower. I pay USD$60/month for 5 gigabytes and, if I go over, USD$60 per gigabyte for every gigabyte I go over that. The only way to tell how close I am to the usurious cap is to log into a website that's only updated once a day and which itself serves several megabytes of ads before I can get to the summary of my data usage. Oh, I also get 50%, 75%, and 90% emails and similar SMS messages which I can't receive because my access point is a MIFI which isn't really a phone. I have complained, and of course not only is nothing done the only competitor has EXACTLY the same pricing model. The one time I went over by accident it nearly doubled my bill and when I complained they "generously" gave me a one-time waiver, but when I told them I'd rather have the service slow down or stop working I got nothing but shrugs. Because, of course, it's a profitable trap and nothing else.
    • by alen (225700)

      everyone prices stuff like this in the 21st century

      90% of your customers pay a fee and you find a way to gouge a small minority willing to pay a premium for that product or service

      not much different than getting large fries and drink at a fast food place. they give you a few pennies worth of potatoes and water, the cheapest food products in the USA for $1 or some other huge profit margin price

      • by C0R1D4N (970153)
        I have the t-mobile throttling plan on my Tab 10.1 it is horrible. 5GB cap which I usually hit around a week before my turnover. The final week it is throttled to 120k. If the throttling was to half speed or even 1/3 speed it'd be fine. 120k is absurd though.
        • by tepples (727027)

          I have the t-mobile throttling plan on my Tab 10.1 it is horrible. 5GB cap which I usually hit around a week before my turnover.

          Do you use Wi-Fi everywhere you can? What bandwidth-intensive actions do you usually do away from Wi-Fi, and in what specific locations away from Wi-Fi do you do them?

          If the throttling was to half speed or even 1/3 speed it'd be fine. 120k is absurd though.

          What that means is you're falling back to EDGE.

          • by C0R1D4N (970153)
            I use wifi at home. At work, which is driving around all the day wifi is unavaioable. Pandora and forum/slashdot browsing are what I generally use it for, along with google voice texting, calling and instant messenging.
            • At work, which is driving around all the day

              Then your employer might be able to afford the 10 GB plan, or if you're self-employed, you could try buying music to store locally rather than relying on Pandora streaming. What bitrate do you use on Pandora, and how long do you keep it open each day?

    • by gl4ss (559668)

      because that way they can get money out of the customers.

      what did you think fair meant? it just means billing as much as they can. which kind of sucks since they aren't doing the right thing and getting as many customers on as many devices as they can..

  • Fraud (Score:2, Interesting)

    by Anonymous Coward

    They underprice their services to get users (recurring!), then force users to switch to higher-tier plans when they consume more? This is classic bait-and-switch.

    http://en.wikipedia.org/wiki/Bait-and-switch

    • Re:Fraud (Score:4, Interesting)

      by alen (225700) on Saturday January 19, 2013 @10:57AM (#42633543)

      no, they price a few users into paying more

      lots of customers like my parents' generation only uses 10GB a month at most on their home internet

      this is why i haven't run p2p in years. its cheaper to buy blu rays or pay for netflix and be on the cheapest internet plan or a cheaper tier than pay $100 a month for internet and the high electricity costs to keep your stuff on 24x7

      you only need 5mbps for netflix. about the same for itunes streaming media. less for most youtube crap. i pay $50 a month for 20/1 to time warner cable and don't see a reason to pay more

      • by tepples (727027)

        this is why i haven't run p2p in years. its cheaper to buy blu rays or pay for netflix

        Provided what you want to watch is even available where you live. I'm aware of several films and TV series that aren't on DVD [1], Blu-ray [A], or Netflix VOD at all.

        you only need 5mbps for netflix.

        After streaming for four hours, you'll have eaten up nearly your entire 10 GB for the month [exede.com].

      • by toddestan (632714)

        High speed internet connection: $100/mo
        Cost of electricity to run a PC 24/7: $25/mo
        All the movies, music, games, and TV shows you could ever need: $0
        Sticking it to the MAFIAA: Priceless.

      • by tsotha (720379)

        no, they price a few users into paying more

        Seems reasonable to me. I don't want to pay more because other people just have to download the latest schlock from Hollywood in HD.

      • by cynyr (703126)

        now stream netflix to 3 devices and watch that 5mbps become 15mbps, before any other web traffic, or downloads. I'm at the point where anything under 20mbps, doesn't have enough bandwidth for typical evenings anymore. two tablets and a TV mean 15mbps is background data. Thats ignoring updates to the tables and the phones, and computers. All I can see is my bandwidth needs going up. I can't wait until my kids have some sort of video based lecture, or what not in 1080P, or start skypeing with friends, or gran

  • by Anonymous Coward on Saturday January 19, 2013 @10:46AM (#42633511)

    "Powell said that while a lot of people had tried to label the cable industry's interest in the issue as about congestion management. "That's wrong," he said."

    So who were these wrong people who said it was congestion management?

    Oh, that's right, THE CABLE COMPANIES THEMSELVES.

    And if they want to talk about "fair", then what about the salaries of these executives?

  • Up-front costs? (Score:4, Interesting)

    by Shoten (260439) on Saturday January 19, 2013 @10:48AM (#42633519)

    Okay, I don't get it. The companies in question are showing record profits...and what he's saying makes it sound like the capital expenditures necessary to have built out the networks in the first place are on some other set of books that don't come into effect. Isn't it the case that companies usually finance capital expenditures, and then pay off the debt over time? Under those circumstances, if the price of connectivity had to stay high in order to pay off that debt, the level of profitability wouldn't be rising the way it is. His argument sounds like bullshit to me.

    • by alen (225700)

      the cable internet companies don't make much money which is what this article is about

      for wireless, the wireless part of the company makes huge profits. for AT&T and Verizon. Sprint is losing money along with T-Mo. but AT&T and Verizon have lots of legacy stuff they still have to run and pay for. the wireless pays for the legacy crap.

      then you have the operations costs. electricity, tech support, etc and it's different across markets. supporting people in the burbs is more expensive than the city.

    • It is bullshit. The real reason why they want to have data caps and usage-based pricing is that it's a way that they can drive up prices without incurring a huge backlash.

      Their marketing psychologists have told them, if you simply raise prices without improving services, then you'll anger your customer base. It's safer to maintain the same price while lowering the standard of service, and then offer to restore the standard of service at an increased premium price. It's just convoluted enough to confuse

      • They also like it because they then can exempt their own YouTube/Hulu/Netflix service from the plan. And when people complain about getting huge bills by going to such places they say. tough luck you should of used X

  • In summary.. (Score:5, Insightful)

    by UPZ (947916) on Saturday January 19, 2013 @10:51AM (#42633529)
    It's about using tax-payer money to build a network that is cut up into regional mini-monopolies where each monopoly can extract substantial prices for basic network use and even more exhorbitant prices for overages. All of which goes to line executive and shareholder pockets while tax-payer pays the cost of building the infrastructure in the first place. This is called corruption, folks!
  • By this logic (Score:5, Interesting)

    by SquareOfS (578820) on Saturday January 19, 2013 @10:58AM (#42633549)

    shouldn't we also have usage-based pricing for the TV they sell us? So that we pay "fairly" for for the fixed cost of establishing the network? Why would that model be different, since it's not really about congestion, as admitted in the article?

    The electric bill and buffet examples in the article are terrible: when we pay for electric usage, we actually are paying for utlization/generation; use more and something (coal, natural gas, etc.) actually gets consumed more. And most buffets are all-you-can-eat; if you're paying by weight or something, the analogy is the same — you're actually consuming something. But both bandwidth and TV channels are there no matter how much they're "consumed." Bandwidth can be saturated (the congestion problem) but it can't be actually consumed.

    If we're going to talk about "fairness", let's talk about:

    1. 1. Fair access to the wired networks built out, frequently, under monopoly guarantees
    2. 2. Fair levels of monetization of the network: does the telecom industry really want the equivalent of a utilities commission deciding how much they profit?
    • by alen (225700)

      the food costs different amounts

      on a buffet the fat people will actually eat more of the cheap foods if you watch. pasta, white rice, potatoes. the meat and veggies aren't eaten as much.

      when i eat buffet i go paleo style and make out

    • Re:By this logic (Score:5, Informative)

      by Gaygirlie (1657131) <gaygirlie AT hotmail DOT com> on Saturday January 19, 2013 @11:58AM (#42633785) Homepage

      One thing that baffles me is that, well, here in Finland we just don't have data caps. Period. Since we don't have data caps whatsoever, even on most mobile broadband - connections, does that mean we're somehow being unfair? Incompetent? Both, even?

      I just don't see it. We're a small country with lots and lots of rural land, only about 8 million people in the whole country and all, and yet our ISPs and cell-phone operators are just thriving without any data caps. We have only one ISP/cell-phone operator that does data caps, the rest do "speed limits," ie. the lowest of the lowest mobile broadband - packages one can get from my cell-phone operator is 512kbps up/down for 4.99€/month and on which you can simply upload and download as much as your heart is willing. 512kbps is enough to download about 158 god damn gigabytes of stuff a month and I didn't even factor in the amount of uploaded data at all -- this is also a package that you can just drop off or switch to a higher/lower tier at your own leisure, there are no 12/24 month contracts involved at all. So basically, even our lowest-tier broadband packages grant us consistent speeds, no long contracts and no sudden extra charges no matter how much you transfer. For some reason our method sounds fairer to me.

      • by evilviper (135110)

        Since we don't have data caps whatsoever, even on most mobile broadband - connections, does that mean we're somehow being unfair? Incompetent? Both, even?

        If a very small percentage of people are using-up a rather large percentage of the available bandwidth, then yes, that's unfair. The average prices across the board must be higher to subsidize those few, while others who want modest service have to pay higher prices.

        Now, once the price of a megabyte of data gets cheap enough, the cost of all that equipmen

        • If a very small percentage of people are using-up a rather large percentage of the available bandwidth, then yes, that's unfair.

          But bandwidth isn't something that wears out, it's not something that you can consume all up like you can e.g. oil. Bandwidth is a measure of something, not the something itself. That means there's a few distinct differences compares to actual physical goods, like e.g. as long as 100% of the available bandwidth isn't used it doesn't matter if some users consume more than others -- it becomes unfair if these users have to pay more than the others even when it doesn't actually affect anyone else, and as such

  • Use it or lose it ! (Score:2, Interesting)

    by Anonymous Coward

    Bandwidth can't be stockpiled. Any bandwidth not used is lost forever.

    So while it's fair to sell priority access but it's not fair to block traffic from empty lines.

    That's obstructionist.

    Eminent domain exists to seize private assets for the public good.

    All natural monopolies should be co-ops.

  • by Anonymous Coward on Saturday January 19, 2013 @11:08AM (#42633597)

    the phone company here runs DSL off copper at least a generation old and refuses to build-out to serve customers past 3 miles from a CO.. even though it's possible to bring the per-subscriber cost of extending DSL down to as little as $100.. and even though they charge nearly double the 'in town' rate for a fraction of the speed past about 1.5 miles.

    the cable company hasn't upgraded anything outside of its headend since they moved into town in the 80s, except for dropping a neighborhood node on each end of town for data. cable internet rates go up at least once per year even though it's a small town with a big fat, underutilized uplink.

    each wireless company has exactly one tower here, and when one is down (happens a few times a year) there's not even an agreement between them to carry calls on the other company's tower. towers are well under capacity but data rates go up and caps go down. what was a reasonable $50 for uncapped unthrottled data no longer exists thanks to verizon's buyout of alltel and the fcc for allowing that to happen.

    and oh yea.. all four companies receive federal funds to provide service to this rural area....... it just never makes it here.

  • by jc42 (318812) on Saturday January 19, 2013 @11:09AM (#42633607) Homepage Journal

    Is "huge up-front costs" a euphemism for payments to maintain their legal monopoly in most of the neighborhoods that they "server"?

    One reason for suspecting this is the recent stories (most recently from a study in Canada that was discussed here on /.) about the actual cost of running an Internet service being less than 1/000 of the money charged the customers. If that's not the explanation of the "huge costs", it must be something else. The obvious guess is the, uh, "campaign contributions" and other related costs of all those zillions of local monopolies that the comms industry has relied on since the development of the telegraph and telephone to prevent any actual competition from arising.

    What other sorts of payouts could the phrase "huge up-front costs" refer to? It might be interesting to get a detailed accounting of all this, though I suppose a lot of it would be similarly buried behind a pile of euphemisms.

    • Buy a stock of them (yes, one suffices), go to their annual stockholders meeting and ask them where they spend their money.

  • by drinkypoo (153816) <martin.espinoza@gmail.com> on Saturday January 19, 2013 @11:11AM (#42633619) Homepage Journal

    If it were about congestion, they could simply use QoS with classification by quota to slow you down as you reach higher percentiles of bandwidth consumption.

    • by PPH (736903)

      But then if I want more bandwidth (unthrottled) and I'm willing to pay for it, can I do so? If so, we're right back to the fee for bandwidth model. If I can't, then it rapidly becomes an example of the tragedy of the commons [wikipedia.org].

      • Under fee for bandwidth, you get charged the same for packets you send or receive when the network is not congested (the zero dark hundred hours, midnight to 5 AM) as for packets you send or receive when the network is congested. Paying for priority would more closely resemble the packages that satellite ISPs like Exede offer: 10 GB per month with unmetered late nights.
  • Tiered pricing is nothing new, no is it anything sinister. When you have some customers deriving vastly more utility from your fixed-cost service those customers are understandably willing to pay more for it. So you charge them more. You'd be a fool not to. Charging every customer the same price means the base price has to go up in order to cover the fixed costs. The base price going up means some customers at the margins (of low use) will simply not bother to pay for your service, i.e. fewer overall c

  • by ChangeOnInstall (589099) on Saturday January 19, 2013 @11:36AM (#42633715)

    Powell went on to say that ISPs had huge up-front costs which had to be allocated out to consumers, and those consumers were familiar with usage-based fees from paying their power bill or buying food.

    In the case of wireless, I couldn't agree more. I negotiate with my local grocery store and set a fixed price for the maximum amount of groceries I might need each month. It works great most of the time, except when unexpected company shows up at the end of the month and I wind up paying an extra $70/egg in overage charges.

  • by onyxruby (118189) <onyxruby@@@comcast...net> on Saturday January 19, 2013 @11:41AM (#42633729)

    Of course this isn't about congestion, if it was other countries with far higher bandwidth allocations wouldn't be charging a fraction of what we charge. Our national broadband is an international embarrassment and is holding back the economy. Hell, even China is starting to deploy Fiber directly to new construction - and - letting you pick your ISP.

    Network lines need to be declared a critical infrastructure, turned over to a third party and let consumers truly have a choice of ISP's. There is no competition for broadband in this country outside of a select few areas and the results are overwhelming. If your lucky enough to live in an area with competition you get /much/ better deals.

    The free market is a wonderful thing that work around almost any problem. However the free market can't work if competition isn't allowed and monopolies can corner the market. We need another trustbuster like Teddy Roosevelt.

    Next election vote for zombie Teddie Roosevelt - dammit.

  • by I_Voter (987579) on Saturday January 19, 2013 @11:57AM (#42633779)
    From TFA
    QUOTE... for a business that requires "enormously high" fixed costs -- digging up the streets, put the wires in -- and operational expense, "it is a completely rational and acceptable process to figure out how to fairly allocate those costs among your consumers who are choosing the service and will pay you to recover those costs.UNQUOTE

    To me -- "digging up the streets, put the wires in" - are start-up costs. And I would be willing to agree that they are "enormously high" However; operational expenses plus depreciation, insurance, etc. are recurring or "fixed" costs. My understanding is that operational "fixed" costs are very much, lower.

    I have no problem with conspicuous consumers of bandwidth paying more. My problem is with costs not dropping for all consumers!
    • by jmauro (32523)

      "[D]igging up the streets, put the wires in" is considered a fixed costs because the cost doesn't change whether you have one customer or a million. It's not a recurring fixed cost, but it is a fixed cost.

    • Wasn't MOST of the fixed cost for building the infrastructure part of that $500 Billion Al Gore go the government/taxpayer to pony up?

      So if their business model is paying for all these fixed costs -- when do we get our check in the mail?

  • by ducomputergeek (595742) on Saturday January 19, 2013 @12:29PM (#42633885)

    The US should have been building the fiber lines based around a munipal/county model much the way most water/sewer systems work where the city/county government installs and maintains the lines and then leases out that line to whatever ISP the customer wants. Then we would have been allowed actual competition. Charter offers you the best package, fine you sign up for Charter for $X per month and they pay the city/county $y per month to lease the line. Want Mom&Pop ISP that charges $Z per month, great, they still pay the city/county $y per month to lease the line.

    That is something at the local level I would have voted a bond issue, sales tax increase, or property tax increase for without a problem.

    Instead we have the system we have now...

    • by luther349 (645380)
      we had such a system in place for the phone lines why we had the tons and tons of dial-up isps but at the same time dsl became a home use product the government pretty much passed a law restoring the telcos monopoly on the phone lines. killing off most early dsl isps if that law never based dsl rates would probably be going down wile getting faster not going up. basically the same game the cable company's got.
    • US citizens have a collective power to take real estate, easements, and capital - as long as that taking is a forced sale for public use at a legally-determined "just" price. This power has been exercised through the states since before the federal Constitution was ratified. In fact, it's usually not possible to build electrical transmission lines, roads, and telco networks without using eminent domain. Telcos and public utilities thus have a constitutional obligation to facilitate public use - and if
    • The US should have been building the fiber lines based around a munipal/county model much the way most water/sewer systems work

      I used to live in a town that brought up such a measure to a referendum. Leading up to the vote, there was so much disinformation (coming in scary, B/W postcards) coming from the entrenched phone and cable companies that they never stood a chance. Something along the lines of "DID YOU KNOW THAT YOUR TOWN WILL STICK YOU WITH A SIX MILLION DOLLAR BILL FOR A RISKY VENTURE?" I don't th

    • by evilviper (135110)

      The US should have been building the fiber lines based around a munipal/county model much the way most water/sewer systems work where the city/county government installs and maintains the lines and then leases out that line to whatever ISP the customer wants.

      Water and sewer line technology hasn't changed in centuries. But over a decade ago, before fibre really took off, you would have been advocating municipalities develop cities' data infrastructure with coax lines or regular analog phone lines, and we'd

  • by Chas (5144) on Saturday January 19, 2013 @12:44PM (#42633933) Homepage Journal

    Like the BILLIONS some of these providers were paid BY THE GOVERNMENT and WITH OUR TAX MONEY for the development of broadband?

    You know, all that money they frittered away?

  • by DriveDog (822962) on Saturday January 19, 2013 @03:10PM (#42634683)
    Whatever their reasons, the biggest wrong is the failure to disclose up front the caps, instead marketing the service as "10Mbps" or whatever, period. Here's where the FTC should be involved, requiring every ad that makes any claims about their service to state all the limitations, and not in the manner we're accustomed to hearing from pharmaceutical and financial "service" ads, which sound like John Moschitta (FedEx ad fast talker) at the end. If being regulated by the FCC precludes such a regulation by the FTC (I think it does not), then that's what the FCC should be doing. People who argue for less regulation may or may not have a point in some cases, but really never have a decent argument against disclosure of terms of sale/service in advertising.
  • by darkonc (47285) <[moc.neergcb] [ta] [leumas_nehpets]> on Saturday January 19, 2013 @04:22PM (#42635093) Homepage Journal
    His argument is based on a resource consumption model. That's not the case here. If i use a megawatt-hour of power you have to burn more coal -- which is what I'm nominally paying for. If I eat 20 pounds of bananas, the box is then empty and you have to pay to grow more bananas..

    If you ignore congestion (which he is arguing that this is not about), then eating bandwidth doesn't cost the ISP significantly more. There's no real incrimental cost difference between a pipe being 10% full and 20% full. Bandwidth caps, so far, have mostly been about directing customers to services that make the ISP more money -- "Skype bandwidth will cost you, but using my home phone service will be a lot chaper".

  • A lot of this fight has been portrayed as ISPs valiantly fighting to keep bandwidth at the same pace as data consumption. I think it's actually the other way 'round. It's data consumption that's been fighting to keep with with bandwidth availability. Back in the early '80s when I was just starting in the computing world, I ran into a principle:

    Programs will expand to fill all available memory

    I think it's the same with bandwidth.

    Back as far as the mid '80s people had long been complaining that the '

    • Netflix wouldn't have survived 15 years ago when the last mile for 99% of the public was a 33Kilobit/second modem, and downloading a 50 megabyte short film took about 4 hours. That's the main reason why it didn't exist back then.

      2013-15=1998.

      quoth the wikipedia [wikipedia.org]

      Netflix was founded in 1997 in Scotts Valley, California by Marc Randolph and Reed Hastings, who previously had worked together at Pure Software, along with Mitch Lowe. Hastings was inspired to start the company after being charged late fees for returning a rented copy of Apollo 13 after the due date. The Netflix website launched in April 1998 with an online version of a more traditional pay-per-rental model (US $4 per rental plus US $2 in postage; late fees applied). Netflix introduced the monthly subscription concept in September 1999, then dropped the single-rental model in early 2000. Since that time the company has built its reputation on the business model of flat-fee unlimited rentals without due dates, late fees, shipping or handling fees, or per title rental fees.

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