An Iowa ISP's Metered Pricing: What Will the Market Bear? 479
An anonymous reader writes "The East Buchanan Telephone Cooperative started charging cellular prices for home DSL internet service starting on January 1st, 2014. A 5GB plan costs $24.95 a month while a 25 GB plan will run $99.95 per month. 100 GB is the most data you can get in a package for $299.95 per month. Each additional GB is $5. They argue that the price increase is justified because their costs have increased by 900% since 2009. About half of their customers use less than 5 GB a month while their largest users use around 100 GB a month. They argue that the switch to measured internet will appropriately place the cost on their heaviest users. With the landmark Net Neutrality ruling this week will larger providers try to move to similar price models?"
Welcome to Australia (Score:3)
This is the norm for us... Though we are finally starting to get somewhat reasonably priced Unlimited* plans now.
* Unlimited plan may be limited
Re: (Score:3)
This is the norm for us...
Really? I've always been shaped when I hit my data cap on broadband, never charged additional for overages. And I've certainly never paid anywhere near the prices they are charging (unless you count the way I used to pay for 'hours' on my old dialup connections, getting 5GB on dialup would take quite a while).
lol (Score:2)
Re: (Score:2)
Though $200 for 100gb seems a little harsh even by Aussie standards let alone the US "I want it all" standards. I'm on 300gb for $130....
That said I was one of the original Optus cable internet customers where you got unlimited internet over HFC (Hybrid Fibre Coax). That was great for a few years and then they introduce their fair usage policy which was you couldn't exceed 10 times the average user. This was a bitch to monitor as you had no idea what an average user did and I apparantly was not an averag
Re: (Score:3, Interesting)
HOW?!?!?!
That means on your downstream you are sustaining 3,640 Kb/s for the entire day. Not that this isn't possible I just want to know what you are using it for. I just can't think of a usage case.
If you are streaming HD video to multiple machines you would still not hit that level of throughput. I'm fascinated. Like that would be 15-20 high quality 1080p movie rips.
And then to send that much data! Are you walking around with a highres camera strapped to your head uploading continuously?
Re:Welcome to Australia (Score:5, Informative)
No, this is nothing like Australia. Those rates are obscene. Australia may have metered internet but the prices are far, far lower.
25 USD for 5 GB? (Australian ISPs would typically give you ~50 GB for $30 AUD, which is roughly equal in value)
99.95 USD for a paltry 25 GB? WTF? 100 bucks in Australia gets you unlimited plans the ISPs that offer unlimited (e.g. TPG) or very-high-quota plans with others (Internode, one of the more expensive ISPs, gives you 1.2 TERAbytes per month for $109 AUD).
This is only "Welcome to Australia" if the Australia you're talking about is the Australia of the year 2000.
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Limited and unlimited are like flammable and inflammable. Subtle difference but basically the same thing. In this case it means "limit stated up front" and "limit hidden in Fair Usage Policy".
Here in Japan I can get 150mb/sec in both directions TO MY PHONE. For less than I was paying for a 100/10 fixed line in the UK.
I wouldn't mind the free market (Score:5, Insightful)
if there were competitors, and not just vendors screaming free market when they adjust prices but then hold up monopoly contracts with the city/state when a community tries to come together and go their own way.
Re:I wouldn't mind the free market (Score:4, Insightful)
The problem with that is the incumbent corporations have made it illegal to have a coop or municipal option. https://en.wikipedia.org/wiki/Municipal_broadband#Controversy [wikipedia.org]
They've effectively bribed the states into giving them a monopoly position. Which then allows them to squeeze their customers dry and use a portion of that money to pay more bribes. Since the US uses a winner takes all election system, and it's nearly impossible to properly research local/state representative candidates they can get away with things like this pretty easily. For clarity, I consider lobbying to be a form of legalized bribery.
meters don't work right (Score:5, Informative)
http://www.dslreports.com/shownews/Canadians-May-Sue-NorthwestTel-Over-Broken-Usage-Meter-127342 [dslreports.com]
wtf (Score:4)
Re:wtf (Score:5, Informative)
Here's a map [openstreetmap.org] showing the vicinity of the city in which they're located (Winthrop, Iowa). I'll let you guess how many options there are for broadband internet there...
i see 3 (Score:2)
Re: (Score:2)
Cutting the cord (Score:4, Funny)
My wife and I are pretty close to just turning off Internet at home. We can only get AT&T, and we can only get legacy DSL at 1.5mbit. Usually when I'm sitting on the PC at home I'm thinking that I'd rather be doing something else anyway, like right now, in fact.
Telephone COOPERATIVE (Score:5, Informative)
One thing that's getting missed here is what cooperative means. My parents are part of another tele coop in another part of Iowa. Tele coops are relatively common in very rural areas and are owned by the subscribers and, at least in the case of my parent's coop and this coop, the subscribers receive dividends. (see http://www.eastbuchanan.com/about/dividends.htm )
If the subscribers don't like it, they should show up to the coop meetings and have their say in the company that they themselves own.
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Net Neutrality? (Score:3)
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Can someone please explain that connection? Really seems like a long stretch to get the topic back on the table. Maybe tiered pricing is caused by global warming and GMO crops?
If that provider stays and faces no competition it will not take long until they start establishing "partnerships" to make this connection usable again.
For example, Netflix or Amazon for streaming video that does not count towards the cap. It's not so far away -- if the connection is completely unusable, it will eventually be modified by "oh, this partner does not count towards the cap" or "this partner only counts @30% towards your cap"
Clicking the link (Score:3)
Re: (Score:2)
TV lineup seems like it stuck in the past how old (Score:2)
TV lineup seems like it stuck in the past how old is there network?
http://www.eastbuchanan.com/internet/p_registration.htm [eastbuchanan.com]
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There doesn't seem to be a "market" (Score:5, Insightful)
From TFA (heresy, I know):
He goes on to explain that EBTC has 1,057 customers as of Dec. 31, 2013, and serves a 165- mile area. That means customer density is roughly seven customers per square mile. (...) Since 2009, he says, the FCC has decreased access charges by $285,004 and Universal Funding by $282,228, for a total of $566,232 or $531.68 per customer.
These are people in rural areas, where it's not very profitable to deliver service in the first place. Public funding is going down, actual bandwidth going up, a little fiber laid down in the dotcom days is growing old and they're in a short squeeze. These prices smell more of desperation than gouging, it can't be easy to break even with those numbers. I doubt any competitors will move in to take over this gold nugget.
Re:There doesn't seem to be a "market" (Score:5, Funny)
I'm curious, how does it feel to be the only person on Slashdot who READ THE DAMN ARTICLE?
Re: (Score:3)
Also from TFA:
Meanwhile, electronics in each cabinet costs approximately $50,000 but only serves approximately 12 customers/ cabinet, and EBTC says they have updated original components twice bringing total investment to $150,000 for each cabinet, bringing the grand total (for16 cabinets) to $2,400.000.
So they probably bought equipment that could serve a few hundred customers but since there don't live that many people within range, only a dozen are connected. Did they make the wrong purchase decisions or does the equipment that fits their needs simply not exist?
Metering it is the wrong approach (Score:4, Insightful)
What they should do is throttle it at peak times, lock everyone down to 2mbt during peak hours, charge extra for everyone who does not want to be snapped
Re: (Score:3)
2) It's over-provisioned becaus
Whoah let me get this straight,... (Score:2)
I'm only glancing at the article here but that seems to be indicating those are the DSL, not mobile data prices, is that right? Those prices are completely insane and I live in Australia. I can get around 300gb per month for $80 or so on ADSL2.
Is there literally 0 competition available in this region? Those prices are ...utterly appalling, virtually making the internet unusable for anything but casual browsing in that region.
What a bunch of liers (Score:5, Informative)
costs have increased by 900% since 2009
I call BS. Prices are dropping everywhere. Backbone bandwidth, -50% per year. It costs only $1,800 through $3,000 to do FTTH. At $300/month, you could be the proud owner of a 1gb/1gb dedicated fiber connection in 10 months. If I have to choose between someone being a total idiot or being greedy, I'm doing with greedy.
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My closest neighbor is 3/4mile away.
Apparently to lay fiber, you trench when you can, but bore to go under roads. I was told $10-15k per mile to trench/bore. The costs to actually put in the fiber and light it up are on top of that.
I think there may be some fiber about 3 miles from me. So if I paid about $50,000, there's a chance I could get some pulled to me. Of course, finding an ISP to provision a circuit on top of that is extra.
There's one other person that might plausibly on the route from wherever
lol (Score:2)
EBTC had a healthy profit before this change (Score:5, Informative)
might as well go 4G (Score:2)
Apparently it must not be an competitive marketplace or they just want to find a convenient way of going out of business, since the Local Cable company (if they have one) is going to make a killing there.
Hell, Verizon HomeFusion is about the same price as the 25GB plan. You can drop your phone line, It'll blow the doors off DSL speeds, and it can be added to a share everything plan so the data can be shared with a 4G hotspot/Phone. If you're going to pay that much you might as well get something that's goin
Time to unplug (Score:2)
Drive them into bankruptcy. Screw them and their 1980s throwback to the bad days of CompuServe, GEnie and AOL
Free Market Capitalism? Can you hear me now USA? (Score:2)
Write your Congress and Senate and if they can't effect a legislative change then FIRE THEIR ASSES!
Its time we were represented by our electorate and not the K street corporate lobby. Remember, voters must be US citizens but shareholders are from anywhere. Isn't it time we take our government back from Wall Street pimps of the bottom line? VOTE!!
As an Australian, those rates seem obscene (Score:5, Informative)
I'm Australian so are more than used to metered internet access. Unlike most Slashdotters, I like the concept of metered internet, in that it gives you options to only pay for what you need and not subsidise other users so much. Grandpa who just checks his email every day can get by fine on the $15 plan that has minimal allowance, while Johnny McTorrentLeecher can cough up for the large quota or unlimited plans.
But even in Australia, a country with a higher cost of living than the US and less in the way of developed internet infrastructure, the costs of metered plans are far, far lower than those quoted in TFA. 100 bucks for 25 GB is like something out of the early 2000s, when broadband itself was relatively new and DSL was mostly of the 256 kbps or 512 kbps variety. For comparison, the offerings of two Australian ISPs that are roughly indicative of a typical "cheaper ISP" and "more expensive but better quality ISP":
TPG (http://www.tpg.com.au/products_services/adsl2-standalone)
50 GB - $29.99
150 GB - $39.99
500 GB - $49.99
Unlimited - $59.99
Internode (http://www.internode.on.net/residential/adsl_broadband/easy_broadband/)
50 GB - $49.95
100 GB - $59.95
200 GB - $69.95
400 GB - $79.95
1.2 TB - $109.95
(And you can take $20/month off the above if you bundle a home phone service with the same provider too)
Comparing to this, this Iowa ISP's prices are insane. Metering sucks if THAT is what you have to pay (particularly in a country where unlimited plans are ubiquitous for less money).
Metering CAN work well, and CAN be fair (pay for what you need ... light users don't have to subsidize the heavy users). But it requires proper choice of plans (within an ISP) and proper competition BETWEEN ISPs to work. If there's a monopoly then yeah, it's very unfair. Fortunately for all the issues we have with internet in Australia, most people in urban or suburban areas (which is 90%+ of the population) do enjoy good ISP competition. If you have a phone line, then you can get DSL from a wide range of providers (at least a dozen, sometimes up to 20, depending on location).
Re: (Score:2)
Replying to myself here, but just had to add, I took a look at the map to see exactly where this ISP serves. It's a tiny little town. In fact, I've actually been there (!?), as I drove from Dubuque to Cedar Falls on a recent trip to the US and this place falls on the highway between them. Small world.
Either way, even in a similar small town in Australia, you wouldn't be paying anywhere near that much, even if Telstra was your only option (provided you had a phone line of course ... if satellite was your on
Already effectively have metered pricing (Score:2)
We already effectively have metered pricing. We pay $125/month for 1.5Mbps. We only get about 90% uptime. If we were to use that at absolute maximum date throughput (impossible) we would get 6GB per month of usage. In reality we only use a small portion of that. So we're paying 5x as much as the plan they're proposing. This is the reality of rural aDSL.
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Oh, and one other detail: there is no competition here. The only ISP is the phone company.
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worst country ever. (Score:4, Funny)
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Wrong question (Score:2)
The important part of this story is that the costs this co-op has to pay for bandwidth have gone up 900% since 2009.
Maybe someone needs to ask why it costs nine times more to connect today than it did five years ago.
If, as I assume, the increase comes entirely from the telecom who sells the co-op bandwidth, then the Justice Department needs to come down with a heavy foot on the neck of the telecom.
We've allowed just a few companies to control communications for an entire nation. They need to be broken up i
If there were competition, it would be a few cents (Score:2)
In an environment with truly open competition, prices must be driven down to the costs of production, plus whatever profit pays for the seller's own work and risk. Anybody charging more is outpriced by somebody willing to accept that minimum.
Every service provision has capital and operating components. Connection to any network - water, gas, power, comms - has a fixed price whether you use it or not, and an incremental price proportional to usage. Keeping a network to a whole city running costs a good $
The end? (Score:2)
Re: It doesn't cost any more to serve more data (Score:5, Insightful)
Well as much as I don't agree with this yes it does. More data use by the end user means the ISP has to pay for bigger connections and redundant connections often at that. Yes cost goes up for everyone. However the price of the inter connections have gone down a lot since 2009 so not sure how they have seen a 900% increase other then by adding that many more customers.
no (Score:3)
Re:no (Score:4, Funny)
The free market already fixed this problem, if you don't like your provider, you're free to chose another. That's what makes capitalism and America great.
-- Ethanol-fueled
Re:no (Score:5, Insightful)
The free market already fixed this problem, if you don't like your provider, you're free to chose another. That's what makes capitalism and America great.
-- Ethanol-fueled
I don't know the details in this ares, but I doubt they would e setting up this kind of metered service tiers if they had and competition. Its a telephone coop, which suggests small town rural.
Too often, the situation is that there is no viable competition, as the market is too small or too remote to attract competition, or it has been legislated away by cities granting right of way to exclusive contracts.
Re:no (Score:5, Informative)
Too often, the situation is that there is no viable competition, as the market is too small or too remote to attract competition, or it has been legislated away by cities granting right of way to exclusive contracts.
Sometimes is has NOTHING to do with how small or remote your town/city is. I live in a well populated suburban town in New England and our choices for internet are either Cox cable or AT&T DSL. Cable speeds are between 10-15 Mb but the fastest DSL we can have is less than 5 Mb. Verizon advertises FIOS for our area but if you try to subscribe you'll be told they don't offer it in our town. Many New England towns are vendor locked and the consumers are left with little or no choices.
Re:no (Score:5, Interesting)
A rural co-op is owned by the subscribers - is it not? There is no corporate profit. Just the equipment and cost of wages and wiring and tech stuff.
1057 customers, and a build cost of about $3 million = $3000 per customer. This stuff gets obsolete in 5 years or less = buy more, scrap the old = $600 per customer per year = $50 per month each. Thed add electricity, maintenance, tech support, new installs.
They then get the FCC grants which have shrunk a bit (Since 2009, he says, the FCC has decreased access charges by $285,004 and Universal Funding by $282,228, for a total of $566,232 or $531.68 per customer. The decrease is expected to continue. During the same timeframe internet demand has grown by 1,000 percent.)
(He goes on to explain that EBTC has 1,057 customers as of Dec. 31, 2013, and serves a 165- mile area. That means customer density is roughly seven customers per square mile.)
This looks like the typical problem that Canada, Australia and a lot of rural America face = low density of subscribers.
Do they share all cost equally?, or do they try to charge proportionally?
They have the classic small town bind.
If you get a densely built area of apartment houses that can be fully fibered, costs per megabyte can be very low, but not here. If they want the high speed, they must make some overpay (those who use only 5 meg per month), or get some proportional pricing.
With a large corporation, they could over charge the dense cities and subsidize the country sides.
Re:no (Score:5, Insightful)
This stuff gets obsolete in 5 years or less
Which is where things get interesting.
When you are building a completely new network or first introducing broadband onto a phone network unlimited traffic makes a lot of sense. Most of your costs at that point are per subscriber not per unit of data and when building a completely new backbone it makes sense to make sure it has plenty of spare capacity.
Then years down the line your network starts creaking at the seams. What you thought was plenty of capacity when you built the network no longer is. You start thinking about a major upgrade to your obsolete (but still fuctional) gear but then you look at why you need that upgrade and discover that it's a relatively small proportion of users who are using most of the traffic. Do you make everyone pay for the upgrade or do you try and place it on the heavy users only?
Having said that this case seems to have swung the balance between "charging for connections" and "charging for data" too far in the opposite direction. Having data prices high enough that people have to balance the cost of installing security updates against the risk of not installing them is almost certainly not a good thing.
Re:no (Score:4, Insightful)
Re: (Score:3)
No need to cause degradation. How would you suggest the cost be apportioned?
1057 people build a thing and share the cost in direct proportion to their use, what is more fair than that?
High BW users use more = pay more, and vice versa.
Let us say you and I build a system, I use 90% of the BW, you use 10%, and to be fair I say we pay equally, since you can also use the same as me (but you do not)
How do you feel?
No one wants the heaviest users ... (Score:3)
don't know the details in this ares, but I doubt they would e setting up this kind of metered service tiers if they had and competition.
Sure they would. They might fight over the 5GB / month @ $25 customers but they are not going to fight over the 100 GB / month @ $300 customers. Neither company probably wants the later very much. They would probably prefer 20 people at 5GB paying $5/GB than 1 person at 100GB paying $3/GB.
Re: (Score:3)
Its a telephone coop, which suggests small town rural.
I'm kind of surprised about the cooperative part. I'm very much NOT happy about the cellular plan pricing levels, but something like $1/5GB wouldn't break my heart.
We do similar things now by charging more for a 'faster' connection right now, with the idea that if you get a 1mb connection you'll be using less data than if you get a 5mb. There are some issues with this - for home connections slower connections are often done simply by limiting the modems, providing 20mb service from the home to the ISP gen
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Many countries have lots of ISPs but i'm not aware of anywhere with more than a handful of "last mile connectivity" providers. At least in the UK the bulk of the costs for a small ISP is paying BT (or one of the handful of competitors operating in any given locality) for the connctions between end user and ISP NOT paying for the upstream connections to the internet.
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>The idea of unmetered pricing is kind of insane.
Why? If an ISP's peak bandwidth is 600 MB/s, then they have to buy 600 MB/s of bandwidth. It doesn't matter how much you download during non-peak times; the pipe has to be sized for peak bandwidth.
Someone that uses 5 GB monthly, but expects 30 MB/s bandwidth during peak time, means the ISP needs 30 MB/s more peak bandwidth (so 630 MB/s total)
Someone that uses 300 GB monthly mostly during non-peak time, and only uses about 5 MB/s during peak time means the
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Would be using the internet for 22 peak minutes a month and not at all outside of peak hours, ie: they don't exist. Anyone expecting 30 MB/S isn't using less than 5 gigs a month. In most cases where limited caps come in the connection speed is pretty much fixed at whatever your home line can offer. The ISP wants to keep the cost down for someone who only uses the internet casually and is doing so by charging more to heavier users.
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Part of the problem in my opinion is the way they're metering it. Take my cell phone for example. I get to "choose" ahead of time how much data I think I'll need for the following month. Right now my family is able to stay under 2GB every month. I could go the next step up and choose the 4GB plan for another $10 per month, or 6 GB for an additional $20 per month. The problem is I don't know what my data usage is going to be. What if I take an unexpected trip for work and the WiFi is unreliable. What i
Re:What has this to do with net neutrality? (Score:5, Interesting)
This has nothing whatsoever to do with net neutrality. But NN has been in the news lately, so by mentioning it in the summary, maybe they can get more page views!
Except (Score:2)
Robber barons have no incentive to serve (Score:3, Insightful)
Why should robber barons serve their customers when they can rob them blind ?
The problem with the United States of America is that history kept on repeating itself.
Back then it was the railroad fellas who monopolizing the transportation, then came the petroleum fellas, and then the US government supposed to have done something to curb the power of those robber barons ...
And when everyone is not looking, the robber barons bought up Washington D.C. and here we go again.
How come South Korea and Japan can have
Re:Robber barons have no incentive to serve (Score:4, Informative)
Comment removed (Score:4, Insightful)
Re:Robber barons have no incentive to serve (Score:5, Interesting)
I'm sick of this damn strawman argument making excuses for these fucking fat-cats. America has plenty of high-density urban areas that are just about as archaic in their infrastructure as the Rural Co-Ops. In my state, Cox cable only rolled out proper RG-6 cable lines to handle the digital signal about 5 years ago, and there are still neighborhoods using the old RG-59 standard to the home, which is a bleeding nightmare to get proper speeds on. Proper speeds being about 10Mbps. Comcast is running tiered service, and I haven't heard anything but complaints about quality. Standard Cable is a fucking joke. AT&T DSL doesn't have nearly enough CO's to handle the number of people who want to get broadband, and no plans on building up any more for the forseeable (5 year) future. In fact, the best service I've heard about in Georgia is from a fucking electric Co-Op that's bringing FTTH service that provides Electricity, TV, Phone, and 10Mbps Uncapped Internet for better overall rates than Cox does for just TV, Phone, and 200GB monthly cap Internet. Exact comparisons: BRMEMC's price for Electricity, TV, Phone, AND Uncapped internet on the combined bill runs roughly $50 to $100 CHEAPER than Cox for just TV, Phone, and 200GB Internet.
There is nothing that stops these companies from providing higher throughput with current technologies that are in place except for greed and the desire to milk subscribers for every penny they have. I know for a fact that every service Truck that Cox owns has a Ladder or bucket and several 2,000' Spools of RG-6 cable and no shortage of high throughput line taps to be able to upgrade every single customer still on the old standard to the proper lines for sustained service. There is no reason for Cox to not be able to make a huge profit on providing $50 1Gbps service. Instead, we've got all these fucking companies going the other way and saying that we need to provide less service for the same fucking money. Instead of increasing to come closer to matching the rest of the world, our fucking service providers are shoving it up our collective asses and DEGRADING our services.
That's it! It's time for the tech minded to Unite and take this damn Country in the right direction towards faster propagation of information instead of the current trend towards slower. This means we need to start making our own active business war against the Data conglomerate! I don't care if a good deal of the bandwidth winds up being used for Cat videos, the Internet is now our emergency communication system, there is no current technology any faster to be able to spread news across the entire continent, and the trend for degradation of these speeds will only serve to make us more and more vulnerable.
Re: It doesn't cost any more to serve more data (Score:5, Insightful)
Re: It doesn't cost any more to serve more data (Score:5, Interesting)
So you're telling me I can get a 100mbit upstream link with resale rights for $45/mo?
That's astounding, since as near as I can tell, getting any kind of dedicated circuit at all is over $400/mo, and any CIR is ontop of that.
I worked in the ISP industry a long time ago. We had a frac DS-3 to UUNet. Our bill was either 4 or 5 digits, per month.
It was provisioned over Metro SONET, iirc, so it's not like we were paying off some huge trench fee.
We were selling 56k Frame Relays for more than $45/mo. Think 10x that cost.
Speeds have certainly gone up since then -- a lot. But prices haven't come down. If you want a carrier grade connection, you pay.
As an aside, I recently moved to a rural location where there is no broadband provider. I called a nearby ISP that serves the closest town. They said $10-15k per mile to trench and bore for fiber, plus the costs of actually laying fiber.
There's no CATV here. There's no possibility of DSL here. HughesNet says its oversubscribed in my area and either sells only their slowest tier or nothing at all, depending on who you believe.
So I'm using a Verizon LTE box. Metered internet really sucks, and its very expensive. It changes your usage habits entirely. We cancelled our Netflix streaming and went back to discs. I never watch stupid youtube movies any more because they're not worth the bandwidth charges I'd rack up watching them.
I've been looking for tower space in a nearby town that I can lease, so I can put up some UBNT gear and do a point-to-point shot from their tower to a tower on my property, and backhaul unmetered internet from a place that has it to my farm.
I've spoken to a few neighbors; all of them who have internet service use cellular data. I think I could build out a pretty slick rural wifi and cover my costs with it -- but that's entirely dependent on being able get some kind of uplink out here.
Doing internet service in a rural area is hard and expensive.
Re: It doesn't cost any more to serve more data (Score:5, Informative)
So you're telling me I can get a 100mbit upstream link with resale rights for $45/mo?
That's astounding, since as near as I can tell, getting any kind of dedicated circuit at all is over $400/mo, and any CIR is ontop of that.
You're confusing transit costs with delivery costs. I'm not sure if you can get a 100 Mbps link for $45/mth, but you definitely can get a 1000Mbps link for $450.
Transit is so cheap these days that it's almost free; it's very cheap, keeps getting cheaper, while many other costs are not getting any cheaper (electricity prices don't ever seem to go down, for example). As a result, transit seems to be making up a smaller and smaller percentage of costs.
Let's take the example of wholesale internet service in Canada. Say that you want to service 1000 customers, and that each customer uses at peak 2Mbps on average. You've got $15 for the DSL or cable line, roughly $3 for the share of the incumbent aggregation network connection, $40 for the aggregation capacity costs, and $1 for the transit. On top of this, there are obviously colocation costs, manpower, office space, etc. But let's just pretend the only costs are the actual network-related costs: you're already at $59, and the transit is less than two percent of that. Once you add in all the other costs, transit is basically inconsequential.
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Not sure what you mean by "trunk bandwidth", it could be either backhaul or transit.
Backhaul (from customer to ISP POP) needs to match closely or exceed end customer bandwidth. Most last mile wholesale providers will offer a 1:1 or low contention SLA, although some "manage" the bandwidth (they oversubscribe until someone complains). However, if an ISP can't get this, or they build it themselves, they need to make sure your backhaul interconnects are overbuilt enough to deal with expected growth in line with
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Which backhaul provider charges $5/gig?
Re:It doesn't cost any more to serve more data (Score:4, Insightful)
It depends upon what the ISP's upstream connection is. In Alaska there were problems because the pipes were only so big but demand was bigger.
But the larger question here is ... is there competition? If someone doesn't like the service/pricing of The East Buchanan Telephone Cooperative can they get equivalent service from a different provider?
I, personally, like the idea of paying for what you use. Provided that there is competition. Otherwise the "average" will keep dropping as people try to limit their expenses and the price will keep creeping up.
Re:It doesn't cost any more to serve more data (Score:4, Funny)
Re:It doesn't cost any more to serve more data (Score:5, Interesting)
People already paid for what they used. It's called bandwidth, and they brought the tier level they needed. That it was on 24/7 just meant that they got 30 days of it. All the companies are doing is jacking up the price while giving you less time.
This isn't water or electricity. Bandwidth is not a limited resource in the same way. This is just a company trying to keep overselling what it has and not upgrade.
Re:It doesn't cost any more to serve more data (Score:5, Insightful)
Sure it is. You can saturate a network switch.
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Of course it is, it's not like you just hook up a cable and bang unlimited data. You can only fit so much data down any given pipe which means either slower connections or fewer connections, the laws of physics still apply just because it's electrons and photons. Any given connection has only so much capacity in terms of number of users and speed.
Re:It doesn't cost any more to serve more data (Score:4, Insightful)
Score: -1 Factually incorrect.
It absolutely costs more to install a bigger pipe for the ISP. The fact that the ISP has to over provision, and hence a small increase in bandwidth can be absorbed without instantly needing to upgrade the pipe does not mean that that extra bandwidth is free.
Switches, cables and admin systems all cost money, and these costs all increase with the amount of bandwidth running through the system.
I actually applaud them for moving to a metered bandwidth model – it makes sense. What I don't applaud is the blatant gouging. The prices should be roughly 100 times lower than the ones they are offering.
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Except none of that really matters; because all the 5gb per month users all use the service at the same time. The folks doing north of 100gb are all torrenting or running netflix at all hours of the day.
Realistically if the want to be able to offer actually decent service they have to have the capacity to handle 6pm when everyone starts getting home from work, it costs them nothing to for the high volume folks to be torrenting away at 3am, and nothing for the soccer moms to put Dora the explorer in at 11a
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Since the problem is maintaining transfer speed, it would make more sense to offer heavily discounted plans that would usually provide, say, 35mpbs, but only 1mbps at peak hours (say, 6pm to 10pm).
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> What I don't applaud is the blatant gouging. The prices should be roughly 100 times lower than the ones they are offering.
The ISP's costs are still probably about 1GB for maybe $0.01. But this is just simple demand and supply. The demand is increasing and the supply is not. If you are the monopoly and you can control the supply (which they can) then they can dictate the price.
It's not any different than a baseball star limiting the number of signed baseballs he gives to fans every year (say 10) whi
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No it is actually quite a bit different considering you don't need to buy signed baseballs for, well, anything other than collecting....
There are anti-trust laws on the books specifically to prevent this sort of bullshit from happening, but because ISPs are still pretty unregulated they are getting away with damn near murder by doing this bullshit. ONE game update for me would wipe out my data for the month if I were stuck on a 5GB plan, and 300 fucking dollars for 100 GB? I would be fucked. I pay $200 fo
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The last mile pipe to your house may be mostly unused, and free to push more data. But the rest of the network interconnects are usually built based on peak aggregate usage. The backbone connections on the internet have been flooded by only 75K misbehaving [wikipedia.org] servers.
Aggregate backbone traffic may be cheap, but it is a limited resource.
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Re:I don't mind metered internet usage... (Score:5, Insightful)
As a customer, I do mind metered internet because it's bullshit.
This isn't electricity (minimal and always on anyway so the difference is negligible, at least for these middle men) or anything, this is about forcing limited supply when there isn't any.
Would you like metered television too? No longer broadcast to you 24/7, now you get to watch 90 minutes a day, and after that you have to pay? Would that make sense to you?
Bandwidth is already rationed by setting speed levels. I already pay quite a bit more a month for the highest speed level residential and businesses even more so.
People rationing bandwidth at night by not using any isn't going to save anyone anything. It's just dark fiber.
More so, I would argue that mindsets like yours is setting us back. The need for speed is what brings us advances, getting us forward, allowing surgeries and other amazing stuff over the net. Metering is just a setback there.
All metered internet will do is make the Cable ISP slobber as they grab netflix and hulu by the balls and cut off their customers through draconian price increases. By some reports, they already lost some 25 million customers. You don't think they want to stem and reverse the flow? They are hurting, and they are hurting because they didn't change with the times (NO, I don't want the sports channels and every other overpriced bundle just to see the 3 channels I watch, fuck off.)
agreed (Score:4, Insightful)
50$ (Score:2)
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Wait, what? You pay for TV?
I have an antenna in my attic and get about 15 channels for free. That's all the TV I could ever watch.
Pay for TV???? What a concept!
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I take the attitude that you can show me commercials if I don't pay for TV, but if I am paying for TV thn I shouldn't see commercials. The problem is that if I have cable or IPTV I have to pay for the service and get commercials and every 10 minutes at that.
I prefer the antenna too, though it can be a challenge finding one with a clear signal in the city.
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What you are talking is a la cart pricing, and most people who want that still want the channels they want available 24/7 ("unlimited" in that time period) and not just individual shows. They just want to stop paying for all the bundled channels.
The problem with your scenario is that it will make TV more expensive overall.
Imagine a buffet where making the food, regardless of quantity, costs a set amount per dish. They could make unlimited spinach or 5 cups, it will cost the same.
Now, is that buffet bett
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Tell me, when this pricing goes into effect for this ISP, and people shut off their computers/don't download anything at night, what is saved in that period?
A massive amount of electricity? Or water? Was a huge amount of bandwidth saved overnight?
Re:I don't mind metered internet usage... (Score:4, Insightful)
Capacity costs, but it doesn't cost THAT much. However, that doesn't translate well to transfer. If you have 1Mbps from 6-10pm, you might as well have it 24/7, it's not any more expensive to provision.
Because of technological progress, the same connections that could do 1GBps in the '90s can do 100GBps (or more) now. The Gbps dumb switches that cost >$1000/port in the '90s cost $80 total now (or $300 -$1000 for 48 ports if you want it smarter).
What I don't understand is people pretending bandwidth is getting more expensive when actual costs are in freefall.
Re:I don't mind metered internet usage... (Score:4)
If the market looks like communism, then sure...
Where are the competitors here? What companies can the victims of these jack*sses flee to? If the answer to that is the sound of crickets, then "communist" price controls are entirely appropriate.
They are appropriate for the same reasons that public utilities are heavily regulated.
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If the answer to that is the sound of crickets, then "communist" price controls are entirely appropriate.
What you seem to be missing is that in this case, the ISP is a community coop, and thus almost exactly fits the definition of "communism" already.
I believe the facts here are that the coop pays a shitload of money to connect to the rest of the world, and some of the reason for that would be their remote location, but primarily the reason for that is that these idiots don't know what they are doing and are getting taken advantage of by everyone they have to do business with.
The kicker is that none of th
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lol (Score:2)
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*All* network infrastructure is oversubscribed, in the sense that there's no way in hell that they can give everyone the rated speed at the same time. Same as with electricity (something about everyone turning their on hair dryer) or roads.