Time Warner Transfer Caps May Inspire Fair-Price Legislation 382
Time Warner's recently announced plan to expand their broadband transfer caps to new markets drew heavy criticism, which prompted their attempt to smooth things over with a ridiculously expensive "unlimited" plan. That wasn't enough for New York Representative Eric Massa, who now says he will draft legislation to "curb tiers, particularly in areas where a broadband provider owns a monopoly on service." Massa said, "Time Warner believes they can do this in Rochester, NY; Greensboro, NC; and Austin and San Antonio, Texas, and it's almost certainly just a matter of time before they attempt to overcharge all of their customers," adding, "I believe safeguards must be put in place when a business has a monopoly on a specific region."
Re:I wonder what fraction of US broadband customer (Score:3, Interesting)
Since the majority of the USA have only one cable provider I would say the majority. Local governments have been granting monopolies for decades. As they upgraded to high speed internet. you get cable and random pockets of DSL. I day random as I can't DSL in my home though people within 2 miles of me can.
Prices (Score:3, Interesting)
Why Higher Rates? (Score:4, Interesting)
I see so many articles about ISPs hiking up their rates or beginning to use bandwidth caps but what I want to know is why?
Yes, a customer who downloads 300 GB a month is more expensive than someone who doesn't but that sort of customer behavior is something that all service businesses have to deal with. I work in the webserver management department of my company. For a flat monthly rate, we will fix, upgrade, secure, and do whatever other odd jobs you want to your server. Some customers make fifty (stupid) requests per month and take up tons of our time but they get billed the same amount as the customers who only make one or two requests. But at the end of the month, both customers are getting the same level of service. How did my company figure out how to reasonably deal with this sort of overuse and underuse behavior while large ISPs can't?
Another problem I have with raising rates and imposing limits is the lack of justification. The only thing I've ever heard is "It's those evil pirates! They're making your bills go up!" Yeah, right. There was a time when illegal media downloading was pretty much the only kind of media downloading that existed but now we have Netflix and iTunes and a whole slew of completely legitimate streaming sites. So let's say I do pay $150/month for unlimited bandwidth. Where is my $150 going? I'm sure there is an answer to this and I would be much more willing to pay it as long as it doesn't include "into the pocket of our CEO". Anyone have a link to an article (preferably written by an unbiased third party) that would explain this?
Re:America against Bandwidth Caps (Score:3, Interesting)
I'm fine with caps when I'm told what I get for what I pay for and not "hey we're giving unlimited bandwidth but oh hey don't use more than 2 gbps per month and we'll shape the shit out of your traffic between noon and 9pm".
ISPs should be forced to advertise only what you get and tell you what they do to your traffic so you know exactly what you're getting. If they do that then fine, put limits on it. I fully understand that limits need to exist.
Re:America against Bandwidth Caps (Score:2, Interesting)
In the country with the biggest European economy, Germany, bandwidth caps are unusual, at least for wired network access. Whenever a company tries to impose bandwidth caps despite calling the service "unlimited" or "flatrate", it turns into a public relations disaster. Germany has a heavily regulated telecoms market where the former state monopoly, German Telekom, must offer several kinds of wholesale services to competitors at regulated prices, so even though there are only Telekom owned last-mile wires in most places, the customer can choose from a number of DSL internet providers. This is where competition is important: The last mile connections are not congested. Basically each customer has an exclusive connection to the central office, and from there it is feasible to have competing network operators for the actual internet service. What the US should do is to force local monopolies to offer access to the last mile at a price which is lower than the lowest of their own plans which makes use of that last mile connection. The competition can then sell their own backbone uplink capacity cheaply with a high contention ratio or provide always-fast connections for a higher price. The market will decide what the customer really wants and what he's willing to pay for it.
Re:Complaining when you got what you asked for (Score:3, Interesting)
It's not the fact that heavy users pay more that bothers me so much, it's the details of it.
1. The connections at the isp are sold by speed, not total data transferred. SO it seems highly questionable when cable companies repeatedly bump everyone's speed, then at the same time introduce caps. Furthermore, they need the pipes to support peak load, but at non-peak times they have lots of excess capacity. Yet the caps don't take this into effect at all. It seems a much fairer way to do it would be to adjust for the % of your connections speed you are using as well as the time of day. A voluntary cap at peak times in exchange for extra bandwidth at low load time would save the isp money and provide most heavy users with all the bittorrent bandwidth they could use.
2. The reporting tools on your cap usage are generally either non-existent (if you are lucky enough to even have published caps) or extremely basic. Unless you have the equipment and technical know-how to set something up yourself, you are generally left with a very rough educated guess at how close the cap you are. And if you do monitor it yourself, and have a discrepancy with the ISP's monitors, there is no mechanism for contesting or debating it.
3. The overage fees are always ridiculously out of sync with the extra costs involved. Considering that presumably your basic subscription pays for all fixed costs, such as maintaining the physical connection and networking, billing, tech support, etc. the only difference between a user at the cap and a user at double the cap is the extra bandwidth used. Yet the fees are often so high at to be ridiculous. $1 per gigabyte? You mean to tell me after all the fixed costs have been paid for, it costs them $1 per gigabyte? If that were true, there is no way they could be making a profit off regular subscribers. It's obvious this is not a "pay your fair share" price. This is an extortion price. They know heavy users make them less profit (the downside of a fixed rate "unlimited" model) and they know the grandma's of the world want a flat rate price even if they never use more then 5% of their capacity. So the caps and ridiculous fees are a way to slant the table in their favor, chasing off heavy users while still maintaining the pretense of flat-rate prices. They know in many areas they are a defacto monopoly, so if they were to just tell people "No we won't sell our service to you" they would be in trouble. So they create pricing policies that have the same effect.
Re:Up next (Score:4, Interesting)
Can I have whatever it is that you're taking that's making the sky such a pretty rosy color? Check their tiering structure, they didn't drop prices when they put caps on it. They won't in the future either.
If this were truly a competitive market, then you might actually see that. The problem is you're looking at a monopoly marketplace for the last mile. With Cable & DSL being the only 2 viable broadband technologies in place for 90% of the people who can get them, there isn't significant enough market pressure to force any price lowering.
Why do you think they are taking the Chicago suburbs to court over community laid last mile? If the Cable/Telco companies have to actually compete on price & service quality, then you would see low tier service at a lowered price. Until then, expect them to make low end tiers out of their normal price & rape you for using enough bandwidth to actually use anyones VOIP or Video service but theirs.
Re:The real solution (Score:2, Interesting)
Unfortunately, this isn't economical. Utilities are one place where monopolies are inevitable, we just need the government to put real limits on them because they are so prone to abuse. Or heck, nationalize the infrastructure, then rent it to service providers for a fee to cover maintenance.
Based on some numbers I heard a while back, the basic problem is this: It takes about 40% of the people in an area subscribing to your cable service in order to make up for the cost of installing the wires in the first place. You'll never get 80% of the people in an area to sign up, and they'll likely never split evenly between two services if they were available, so a second cable company in the same area is just a recipe for both companies failing.
However, for things like phone service and internet access, there is a way around this problem. The "must have X% of people signed up" only applies to the actual infrastructure project, the wires to everyone's house. If there were a real split between the infrastructure company and the content company (i.e. government controlled infrastructure or government mandated breakups of current companies) then you can have fully equal access for ISPs to everyone, and consumers would actually have a choice for their service provider.
There are some issues that make this difficult and not really as straightforward as I presented, but I think it is the only real hope of giving consumers a choice. You might end up with some sort of limits from the local infrastructure, but local bandwidth limitations tend to be much less of an issue from what I've seen.
Re:Up next (Score:4, Interesting)
for electricity and water, you build the delivery infrastructure, and the costs incurred by the company are the maintenance cost of this delivery infrastructure plus production of water and electricity.
A company could build a huge delivery capacity, but the resource itself (water, power source) is limited and increasing its availability to the customer is not possible.
Internet service providers, build the last mile delivery service, pay to maintain it, then produce what which we have to pay for? capacity? capacity is not scarce because we know they can build more capacity into their infrastructure.
Reaching an infrastructure's limit in usage, especially a huge one such as theirs, would tell me that it is fully utilized. They have to make a profit at this point because most of their cost is fixed! it might take time, but they can expand their infrastructure overtime and still make a profit, so I don't think capacity is the limiting factor here
content? which makes me wonder, don't content providers pay also for internet capacity? if the capacity exists for them to provide all their content, why shouldn't it be any different for the last miles the ISPs offer? aren't content providers also end users like us for other ISPS?
Here is another thought, why wouldnt the RIAA,MPAA sue ISPs when they charge us on bits for downloaded copyrighted content? wouldn't they be technically charging us for the content which they do not own? would they also be copying portions of the copy righted content every time it goes from one router to the next? why sue people running bit torrent trackers then and not ISPs?
Re:The real solution (Score:5, Interesting)
Sadly, not only are they not "regulated heavily," in most cases they're not regulated at all. Municipalities used to have a lot of regulatory authority over cable operators, but a variety of deregulatory actions by the FCC and Congress have eroded most municipal control. Internet service isn't regulated either; it's considered an "enhanced information service" and thus exempt from the common-carrier regime that applies to services like telephony.
I don't see many options other than re-estabishing common-carriage as the dominant regulatory model for these services. The carriers will argue that they can't make enough money under this model to justify the investments required to maintain and upgrade their network facilities. Perhaps a workable model is to give operators a fixed time limit (twenty years after the initial license perhaps) after which they must convert to common carriage. You'd have to write the rules carefully to make sure ownership changes of existing plant doesn't restart the time period.
Re:Up next (Score:2, Interesting)
Ah but you can choose not to have SMS messaging, your phone can show you how many minutes you have used. Water and electricity have regulated metering systems.
Try to figure out ow much of your monthly bandwidth you have used without using more bandwidth. personally I say make a law that the ISP wants metered service then they must provide a meter at the point of entry into the house(for cable modem at the cable modem, DSL modems, etc)
Time Warner would stop and yet i isn't specifically blocked.
Fifteen years ago these thieves .... (Score:3, Interesting)
lobbied Congress with perks and "campaign contributions" to kill initiatives to install fiber optic cable as a community service/commodity, claiming "unfair" competition. The telcos promised they would complete buiding the fiber optic future in the 1990s, got tax breaks and rate relief to the tune of HUNDREDS OF MILLIONS, pocketed the cash and then promptly forgot their promise. I still have UNUSED fiber optic cable running through my yard from our canceled community project. As a result, I have to pay $72US for 10Mb/s bandwidth and TimeWarner and the other cable/Telecos are constantly trying to think up new ways to create artificial scarcity of bandwidth in order to charge more rent for an outdated wire pipe. These thieves have PROVEN in the past that they cannot be trusted and are too greedy to be given the opportunity to steal again.
It's time the people took back control of the Internet, complete the Fiber Optic (or better) technology and make it a service like electric, water and sewer, cheap and affordable to EVERY house.
Re:CEO Says one Thing Their SEC Statements Say Oth (Score:3, Interesting)
Hmmm, perhaps shareholders should be filing complaint with the SEC for possible fraud if the CEO is saying two different things about costs.
Re:Up next (Score:3, Interesting)
Any electricity we don't use doesn't have to be generated. Any water we don't drink is there for us to drink tomorrow. Any bandwidth we don't use is gone. ISPs should be encouraging the maximal use of their bandwidth and upgrading as necessary. In any other market if a business can't supply as much as their customers demand, they *expand*.
Re:Up next (Score:5, Interesting)
Re:Up next (Score:3, Interesting)
I saw the article summary, and I thought to myself: "Ridiculously overpriced unlimited" What are they? On crack?
However, I've yet to see a provider actually even tolerate actual unlimited usage on its network.
A lot of people seem to confuse "you don't have to wait to reconnect" with "You can use it until your modem turns another color from heat".
My definition of unlimited is the latter. With that definition of unlimited, 1 megabit per second times 3600 seconds times 24 hours, time 30 days Is some 300 Gigabytes.
I've yet to see a dataplan that includes more than 150.
However, I saw the article, and they only said "the maximum overcharge is 75 $" Not that an actual unlimited plan was that amount. They'd still throw people off much faster than this.
inflation;price hikes; capitalism & fed corrup (Score:5, Interesting)
First they sell 'unlimited internet' for a "lowish" monthly fee like $30. Then they collect a bunch of subscriptions and don't funnel sufficient amount into R&D, so they then create the idea of 'scarcity', so they can implement 'caps' (pre-emptive strike against being able to sub to an "on-demand" download HD movie service" for more than 1 movie). Now they re-introduce the old unlimited at the new shiny price of $150.
Like cell service. Reasonably usable plans were available for $29-$39 dollars. Then it was $49, now it's closer to $59 or
$69 if you want, say 10 hours a month of unrestricted call-time.
Unlike computer services which used to be priced in 5-15$/minute of cpu time or hour of computer time that eventually fell to
too small to be metered. This was the effect of innovation, competition and progress.
Now, we see the opposite effect of little or no competition and low innovation and low progress -- the companies divide up
their current 'offerings' into smaller chunks to give smaller amounts for the same price while 'quintupling' the price for
the old service.
Sounds like a ~ 400% price increase for the same old service, or "500% inflation". Someone asked for items that have increased
by large amounts (much more than the published rate of 'inflation')...it's not all items at the same time, but a 5x jump for
unlimited computer download access might qualify as an example of excessive inflation -- either that or gouging... Why?
Because they can.
Free market capitalism becomes corrupt when a few people (or pseudopeople(Corps)) buy up the market. Seems like corruption is the natural consequence of capitalism. It's even being acknowledged that the pay-for-performance system in place for financial was one of the main factors leading to the systemic abuse, fraud and corruption that is slowly falling out as people's abuses are falling out of the woodwork as deleveraging and the Fed's mantra of "constant-inflation is good" mantra is running into problems.
It's unrealistic and a systemic abuse to constantly inflate the currency as the Fed has done and has stated as one of its guiding goals -- not keeping inflation 'in check', but always making sure there is some inflation around 2%/year. The idea of 'deflation', was so scary, recently, that the Federal Reserve "printed" hundreds of billions of dollars over last fall just to inject into the economy to stimulate inflation to counter the economy's contraction. Rather than allowing natural deflation to occur (as happened in the stock market to some extent), the dollar should have been allowed to contract by 3-4% as the economy
contracted. Instead, they print more paper, so each dollar becomes worth less (inflation) to counter the natural contraction.
When the economy rebounds, there will be so much money in the economy, we risk an unpredictable rebound. Instead of providing
stability, the Fed has its focus on constant low-level stimulation, regardless of economic conditions. Pretty stupid policy to leave in the hands of private enterprise.