ISP Bandwidth Caps are Really Rate Hikes
cringely.com
cringely.com
Paying 40$ a month instead of 30$ for an unlimited or very high amount of data means you'll grumble a bit, but you'll still do whatever you did before.
Going from a very high cap or unlimited to a very low cap + expensive additional data means you'll very probably try to restrict your data transfers and do whatever you can not to exceed your cap.
You don't have a sunken cost like with a normal rate hike..
EDIT: I don't know what the advertised rates were, but they were less (20/5?).
I don't remember there being a specific name for it.
I would not be surprised if they don't offer the exact thing anymore.
My advice, get some relatively low speed (16Mbps) and hope it's much higher, like I got.
IP transit costs are what a carrier or ISP would pay to get traffic from their main datacenter/CO in a given metro area to the Internet. This is an operating expense and is a drop in the bucket compared to CapEx they spend on the last mile.
The cable operators and mobile carriers are freaking out because they are constantly pouring money into nodes splits and QAM carriers(cable) or radios, backhaul, and spectrum(mobile). These are the real money pits of their businesses and their motivation to enforce data transfer caps, throttling, etc.
For heavier users, offer a plan with no cap (or, say, a cap 10x larger) and higher speed, and charge more for it. I think power users would be much more accepting of a price increase along with higher speeds than a simple addition of caps to all plans with no price change.
I've had the backwards situation where it was cheaper to buy basic cable TV + cable internet than stand alone cable internet.
It would be foolish of them to offer a cheaper, limited cable internet plan when they can make everybody pay more for their standard, unlimited (that is not unlimited) plan.
200MB - $15/month 2GB - $25/month
Albeit without the higher speeds.
It is even more pathetic with their 4G network advertisement. All it takes is 1(maybe 2) HD movies from Netflix to hit a monthly cap.
http://www.verizonwireless.com/b2c/mobilebroadband/?page=pla...
Default data plan for smart phone is $30/mo, capped at 2Gb/mo, on a 4G network.
Their maximum cap is 10Gb/mo for an outrageous price of $80/mo.
It is evident that the whole point of 4G network for Verizon is to bring their customer to the monthly cap at a blazing speed and start over-charging them by $10/Gb as soon as they can.
"Everything is amazing, and nobody is happy." --Louis C.K.
It used to be the case that you couldn't get ANYTHING approaching 5mbps download speed in your home. Now we regularly get 15, 25, and even 50mbps download speeds.
You also couldn't get decent wireless data. Remember EDGE? 1xRTT? Try streaming Netflix back then.
I remember Airphone and using a MODEM to get 9600bps data so I could send an urgent IM and followup email via the Airphone on a flight to a co-worker. Now I can get GoGo inflight internet pretty regularly. I'm looking forward to my next transatlantic on Lufthansa when I can have access to the Internet for almost the entire flight.
Need high-speed internet out in the middle of NOWHERE? You can get two-way high-speed Internet via satellite for a very reasonable sum.
It's all amazing and nobody is happy.
I've spent the past 20 years working in the Internet industry for almost EVERY major ISP out there. It's quite disheartening to see your router capacities double every two years when you're locked into a 7-year depreciation cycle for network hardware. Ditto for long-haul transmission.
This wireless is different? Maybe you weren't there for the tower space leasing negotiations I witnessed. You think broadband is expensive? Try sticking 3 antennas along with hardline 150' up a pole and tell me that your broadband is expensive when you see the monthly bill for tower leasing for a SINGLE site.
WOW.
The long term trend for high-speed internet pricing is DOWN. We get more and more downstream and upstream capacity per dollar with each passing year. Wired AND wireless. What was once IMPOSSIBLY expensive is only going to get less so in the future.
I used to pay $12.80 PER HOUR for 1200bps access.
BTW, You're Welcome.
Too expensive? Don't pay it. I think you can still get a 56kb modem on Ebay. Dialup ISP service is something like $7.95/mo now.
And that's in 2011 dollars.
Although, having unlimited 56kb connection and downloading non-stop for a month (maximum utilization on customer's end with whooping 3kbyte/s) would result in roughly 7.5 Gbytes of downloaded data per month. Which is still 4x the standard 2Gb limit set by cellular phone companies. Not to mention cheaper.
"Everything is amazing, and nobody is happy." --Louis C.K.
Whenever this point is raised, I always argue that human progress depends on the amazing becoming commonplace, luxuries becoming essentials, etc. If we were always walking around being bewildered by everything, we'd have no reason to improve.
My second point was to point out that there are real reasons why the assumptions made about what broadband "costs" aren't really relevant to what you "pay" for it.
Without putting too fine a point on it, CAPEX on equipment/fiber tend to be dwarfed by the OPEX of leasing and labor costs associated with running a telecomm business for profit. Somewhat distended depreciation schedules mandated by GAAP compound the problem of removing obsolete assets from production networks and replacing them with newer equipment.
BTW, pricing for "Internet" has been "metered" almost from the beginning of commercial availability. UUNET did 95th percentile pricing for almost all of its dedicated access customers because that was the best way to tie consumption patterns to bandwidth availability.
If bandwidth seems expensive now, it's only because you've been paying for it for a very, very short time.
So does the extended depreciation force equipment owners to pay the taxes they would've written off for the extra years if they just disconnect the equipment and let it sit in a closet?
Careful. I used to work for a municipal fiber company and they are FAR from being the best group to build the kind of Infrastructure we need. Don't even get me started on the problem of politicizing the communications infrastructure of a city.
The only path forward is for us to get some real competition between the cablecos and the telcos.
Do you have any evidence of how common this behavior is or what impact it actually has on the network?
ISPs claim that the vast majority of their users won't be affected by data caps, but they also claim that heavy users significantly degrade performance for everyone. Those two statements usually seem contradictory to me.
Original article was posted here yesterday: http://news.ycombinator.com/item?id=2814917
Cross-posting my question from this thread:
Is this spectrum encumbered by any regulations that would prevent an enterprising individual from leasing some land near a backbone connection and setting up a startup ISP?
Would LOVE to see the regional cable monopolies face real competition. 22Mbps is about 30% more downstream and 4000% more upstream speed than I get from Time Warner Cable in NYC.
Wondering then, what is the use case for this new standard? Only very rural areas?
As average bandwidth consumption PER ENDPOINT increases and moves from very bursty to somewhat constant bit rate, the effects up the cost chain start to chip away at the design parameters that went into building the infrastructure we're going to live with for some time. Replacing that infrastructure is costly so pricing pressure is used to delay that replacement event. It's all about ECONOMICS.
This is the case whether we're talking about urban or rural areas. It's definitely more acute when we're in a rural area, but the first-mile is only part of the cost of delivering b/w. The rest of that cost is driven by indirect factors.
Case in point: a very recent government regulation resulted in a network upgrade that cost $71 million in new hardware ALONE. Add in the labor costs associated with testing and installing all of that hardware and you're somewhere north of $100 million. That "upgrade" added not a single bit of capacity to the network.
If you're not granny checking her email and facebook, you're not welcome here.
I think its more about quietly but forcefully sending the message that your internet is not for tv.