Former FCC Boss: Data Caps Not About Network Congestion 238
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."
Large company trying to be "fair"? (Score:5, Insightful)
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!!
They set the pricing model (Score:5, Insightful)
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?
Re:Large company trying to be "fair"? (Score:2, Insightful)
Fair means they'll leave the customer with some money for other corporations to fleece.
Comment removed (Score:5, Insightful)
I don't think it means even that (Score:5, Insightful)
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.
Re:They set the pricing model (Score:4, Insightful)
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.
We missed the boat on the infrustructure.. (Score:4, Insightful)
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...
Re:I don't think it means even that (Score:5, Insightful)
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.
Re:Bait and Switch (Score:5, Insightful)
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.