Network Neutrality Debate Was, Still Is, About Greed - Op-Ed: debate shifts from Comcast throttling to metered billing
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Network Neutrality Debate Was, Still Is, About Greed
Op-Ed: debate shifts from Comcast throttling to metered billing
11:52AM Friday Aug 01 2008 by Karl Bode
tags: prices · competition · business · bandwidth · Op/Ed
The Wall Street Journal this week lashed out at Kevin Martin for his decision to sanction Comcast for their use of TCP packet forgery to throttle P2P. In addition to completely missing some of Martin's underlying motivations for roughing up Comcast, the editorial trots out one of the most familiar anti-net-neutrality arguments -- namely that people (or Google) aren't paying enough for bandwidth, and that network neutrality folks want to prevent ISPs from charging more money to improve capacity:
Net neutrality proponents.... would prohibit Internet service providers from using price to address the ever-growing popularity of streaming video and other bandwidth-intensive programs that cause bottlenecks.
Of course as Mike Masnick at Techdirt and Tim Lee at the Technoloby Liberation Front note, nobody in DC (especially telco friendly FCC boss Martin) is interested in stopping carriers from charging consumers more money. In fact, as I suggested yesterday, the primary result of Martin's investigation will likely be a broader shift to metered billing. It's likely one of Martin's goals here (aside from political gain) is to warm the industry bed for a metered billing shift, which the Journal would probably support if they actually understood the issue.

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In DC nobody cares, but there is strong consumer resistance to the ISP argument that users (or Google) aren't paying enough for the bandwidth they use, and that metered billing is a necessary tool to manage congestion. Perhaps neutrality mainstays like Tim Wu are ok with the shift to metered billing as progress, but many American broadband customers are not.

First, while the cost of bandwidth continues to drop, ISPs continue to find ways to increase profits (advertising via webmail, BVAS, selling your clickstream data, DNS Redirection revenue, charging to get around spam filters, targeted behavioral advertising). Add these on top of fairly robust monthly bandwidth costs (Americans pay more than 20 other OECD ranked countries for broadband, and usually for less speed). ISPs are not hurting financially. The pressure to change industry pricing models is manufactured.

While there are opponents of metered billing (I'm one), the concern isn't that carriers are going to raise prices reasonably to pay for consumption. I'm more than happy to be bumped to a more expensive tier should my consumption be egregious. The concern is that by opening the door to metered billing, carriers will use the system to price-gouge already profitable customers (early trials are already charging consumers 1,500% over cost per GB). I also believe there's a strong temptation to use the metered model to kill off competing video delivery options.

People need to remember how the net-neutrality debate really took off. In 2005, then-AT&T CEO Ed Whitacre told Business Week that because people use Google, Google should help pay for AT&T's network deployment (or as Ed put it, Google ain't usin' his pipes for free). In short, ISP executives want to please investors by offloading necessary video-driven upgrade expenses on to others. Network neutrality is about very profitable companies wanting to become more profitable at any cost. That's really all it has ever been about.

The FCC's sanctioning of Comcast doesn't change that, it simply reconfigures the debate landscape. Now instead of secretly throttling your connection, ISPs simply want to "transparently" over bill you for it. Whatever your opinion on this front, one thing's clear from this weeks multitude of editorials: the FCC's investigation has already shifted the public argument from non-transparent throttling to transparent metered billing. Perhaps, for some, that was the plan all along.

Related:
  1. There Is No Broadband 'Price War'
  2. Thursday Morning Links
  3. Thursday Evening Links
  4. Again, There's No Broadband 'Price War'
  5. Remember How 'Franchise Reform' Was Going To Lower Cable Rates?
  6. Global Broadband Prices Plummet
  7. Measuring Caps By E-Mails Sent Doesn't Make Them More Generous
  8. HughesNet Widens Cap-Free Window
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sousademiami @ 1st Aug 12:06PM:
Open market with no competition doesn't work.

Everyone likes to spout off about how a free market will create the most innovative products at the lowest price and be good for everyone. And it is quite the novel idea (look at Wal-Mart, cheap stuff all over that place) but much like Communism, it just doesn't work in it's purest form. When huge companies with no competitors have complete control over what is becoming a daily necessity, huge profits and greed control prices and consumers lose. Deregulation on these fronts only leads to a less for more business model.
--
OASAASLLS

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anon @ 1st Aug 12:07PM:
Metering is a Scare Tactic

There's an old tale about 2 economists walking down the street. One sees a $20 bill on the ground, and says to the other economist "hey, there's a $20 bill." The other economist says back, "no, there's not. If there were, someone would have already picked it up."

Metering is the same thing. If ISP's thought metering would increase their margins, they would have already done it.

The history of telecom is towards pricing simplification. While some companies are floating trial balloons about metering, they are not likely to implement it.

And no NN advocates are for metering. Tim Wu has spoken on this issue elsewhere... in this case he was just clumsy when talking to a reporter.
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Dogfather @ 1st Aug 12:08PM:
Just an aside

I don't believe for 2 seconds that the "AVERAGE" broadband price paid in the US is over $50.
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Matt @ 1st Aug 12:08PM:
Go USA!

Just look at all those super-power countries we're ahead of! Yeah! Go USA! Oh, wait ...

Metered billing is nothing but a concerted push to kill off competing video services and reduce capital expenditures; hidden behind the "P2P pirates are teh warez hax0rz" baseless mantra. While I don't believe some of the selfish people who trumpet "their right to 1TB a month of Bitorrent at 1,000 simultaneous connections", I have to call a spade a spade and those users should simply be warned, then booted.

Comcast's 250GB a month is a very reasonable cap, for the moment. If caps are going to be introduced, especially with hefty overages, I expect to see the ISPs review and RAISE the caps each year ... and then provide the data to an independent 3rd party to review. I think dbmaven will fly before any of that ever happens though.
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badtrip @ 1st Aug 12:08PM:
aGREED!

I agree completely that usage based billing and overage charges will be implemented in order to mitigate cable companies' competition with VOD.

It is common knowlegde that as a technology matures, it's cost decreases. Cable ISP tech, however seems to buck this trend and instead of costs decreasing, they rise.

If any industry needs regulation, it is the cable ISP industry. These guys are running monopolies in what is quickly becoming a necessary utility. $70 per month for 16/1 service with caps and overage charges is too high a price IMO. I don't have a problem with cable ISPs going to usage based payment like electricity/gas/water. I also don't care if they do a flat rate like local telephone service. I do care, however when they do both.
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fiberguy @ 1st Aug 12:24PM:
Re: aGREED!

disagreed!

Look, the internet is NOT an infinite resource and there is cost involved to transport data - that's a fact. Many of the greed pushers here don't like to hear that because they think the whole world should be laid at their feet.

Your biggest mistake is assuming that technology HAS in fact matured, when it hasn't. You see a cable modem on your desk and you think that's technology, however, there is much more to running a network than your modem. There are updates that go on in a NOC all the time before you even get to your cable modem. There are updates and upgrades to the backbone, hardware, etc. People like you (in your views) assume that what you see in your world is reality when it's far from it.

Now, back to another topic as well - network management. The so-called "liberation fighters" want to tie the hands of the networks every day! They'd like to see no caps, no meters, no restricts, run servers/services of any kind, transmit any kind of data then want, when they want, and how they want including pirated software, and do it wide open 24/7 because "they own the line." Then they come back and bitch obsessively that their connections are too slow. (Scratches head) WTF?! Further, they want it all and a reducing cost, and in some cases some of them feel the internet should be free, or government operated. (Anyone that knows anything about the government knows that the government has no money of its own - the gov is nothing but wealth redistribution; this, nothing is free.

Now, what do we have here? A group of fighters who want hands-off the internet and want more. The ISPs are tired of getting backed into a corner and are doing like any animal being confronted; eventually they get pissed and pounce back as they are today.

The model of the internet IS changing. People want it to be a pipe that anything can be tossed onto, well, guess what.. it DOES reduce some revenues for the providers as the internet is a SECOND line product. (another reality) We've also proven that internet only companies never survive. (another reality) So, what's the answer.. evolution.

.. Welcome to billing by the the KB. It's what you all wanted.

You asked for it every time you guys said "hands off my line" you asked for it every time you screamed for so-called network neutrality, you got what you asked for when you said "define what is too much" (because once they did, it would affect EVERYONE which it didn't have to and gave them a right, so to speak, to charge for overage)

Reap what you sow.

Myth: The internet is a utility. Myth: $70 a month for such an important utility is too high. (ESPECIALLY for 16/1 which is NOT "matured technology") Myth: Cable is the only one in this boat. and the biggest myth... : The internet is matured technology. It is always evolving. And, maturing and obsolete are two different things. Dial up isn't mature, it's obsolete. Broadband today has shed its skin several times. I do believe you are confusing the "concept" with "technology" and they are in fact two different things.

Sorry to have to wake you up and open your eyes, but this IS actually greed, I agree.. but not on the side you may thing. Let me put this in simple terms.. you're at a so called "all you can eat buffet" and you're sitting there telling the owner "you said it's all you can eat so I'll be here all day.. it's my right!"

And, one other thing I picked out of your post. You know how you are ok with usage based billing like electricity, gas, and water? and you're o.k. with unlimited just not both.. I've got news for you... you make it clear that you don't really read any of those bills. There is always a base charge and then usage. So, I guess you ARE ok with that model.

What a sad age we are moving into.
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fiberguy @ 1st Aug 12:25PM:
Re: Go USA!

said by Matt :

Metered billing is nothing but a concerted push to kill off competing video services and reduce capital expenditures; hidden behind the "P2P pirates are teh warez hax0rz" baseless mantra.
Yea.. that's why so many countries use it.
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Matt @ 1st Aug 12:28PM:
Re: Go USA!

said by fiberguy :

said by Matt :

Metered billing is nothing but a concerted push to kill off competing video services and reduce capital expenditures; hidden behind the "P2P pirates are teh warez hax0rz" baseless mantra.
Yea.. that's why so many countries use it.
Would it perhaps be any of the countries that have a lower cost than us in that pretty graphic? Because I don't remember hearing about our prices going down when this is implemented.
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fiberguy @ 1st Aug 12:30PM:
Re: Metering is a Scare Tactic

No, it's the only way they CAN manage their networks now. Believe it or not, people have been screaming for this and been demanding it.. now they get it and don't like it.

Network neutrality folks ARE in fact for it.. it's kinda like making a deal with the devil. The NN people didn't think this through. There is NO way anyone is going to force the ISPs to operate flat.. they need to make a profit. NN people would all but, and damn near, kill ISPs.

NN people want the internet as fast as can be, always upgraded, not managed, and anything goes... they don't say it all at the same time, but when you take all their arguments, put them together, and you have the largest group of idiots on the planet.

Sorry to say, but NN people are socialists BECAUSE of how they want things to operate. They WANT unfettered access at a small, and I do mean, small price.

The NN people are getting what they want.. hands off internet.. but that comes with caps or meters. You can't have it all.
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TK Junk Mail @ 1st Aug 12:40PM:
Re: aGREED!

All good points and ones that think all corporations are evil blood sucking vampires (Karl?) will never admit to. Well, they all will get what they deserve - pay by the byte tiers instead of speed tiers. And then we will see how many want to download movies and music 24x7(even if they will never watch or listen to 90% of it) when the bills start climbing up to 4 digits/mo.
--
My BLOG .. .. Internet News .. .. My Web Page
Ask yourself one question: 'Do I feel lucky?' Well, do ya punk?

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Matt @ 1st Aug 12:41PM:
Re: aGREED!

said by fiberguy :

Myth: The internet is a utility. Myth: $70 a month for such an important utility is too high. (ESPECIALLY for 16/1 which is NOT "matured technology") Myth: Cable is the only one in this boat. and the biggest myth... : The internet is matured technology. It is always evolving. And, maturing and obsolete are two different things. Dial up isn't mature, it's obsolete. Broadband today has shed its skin several times. I do believe you are confusing the "concept" with "technology" and they are in fact two different things.
I agree with a lot of your post, but your reasoning here is flawed. I know what it costs for my local cable company to provide a residential and business class cable modem to the end user due to my involvement with several Non-Profit agencies. I've worked with Time Warner Business Class and had them donate symmetrical connections to projects. Part of the proposal was sitting down with them, crunching the number on cost vs benefit ... the actual cost for them to provide the connectivity vs. their benefit. I've had to get sponsors or sign agreements where after X amount of time "free", the non-profit would pay X amount of dollars for X amount of years.

The cost to provide a $70 residential connection is WELL under the 50% mark ...

The problem is, that profit margin is shrinking because the end users as a whole are starting to use more bandwidth. The "grandma's and grandpa's" use to help cover these costs with their 100MB a month of email traffic, but now even they are getting into pictures and videos. Additionally, my daughter is getting heavily into posting videos rather than pictures as cell phone and digital camera video quality improves.

Now, throw Hulu, DirecTV streaming, Netflix Streaming, XBox 360 marketplace (and the impending Netflix/360 partnership), and the PS3 VoD service and you have a serious competitive threat to their core business, while also increasing their costs on the internet traffic side.

Add in the losses from people who were paying for that $45-$70/month connection and moved down to the "Basic" tiers at $29.99 or $24.99 a month, and you can see how they are being affected.

To drive the point home, there were several times I was told to DONATE a 6x2Mbps Business Class Connection just so they could "get in there and offer TV service."

What does that tell you about what they are trying to protect and where the profit margins are?
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espaeth @ 1st Aug 12:42PM:
Ed Whitacre has a time machine!

said by Karl Bode :

People need to remember where the net-neutrality debate really exploded. In 2005, then-AT&T CEO Ed Whitacre told Business Week that because people use Google, Google should help pay for AT&T's network deployment (or as Ed put it, Google ain't usin' his pipes for free). In short, ISP executives want to please investors by offloading necessary video-driven upgrade expenses on to others.
Ed knew in 2005 that Google would acquire YouTube in 2006, and that YouTube would become a major source for Internet video?

Why stop at recent news? Surely we can prove how Nostradamus quatrains apply to modern broadband!
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karlmarx @ 1st Aug 12:44PM:
Re: Metering is a Scare Tactic

wow, more 'talking points' from a fat republican. Why am I not suprised.
Net Neutrality is NOT about unlimited speeds. Net Neutrality is about GETTING WHAT YOU PAY FOR. Is it the customers fault if comcast is overselling their network by a factor of 40? NO. If comcast can only provide a steady 1mb/sec download, and 256kb/sec upload per node, THEN THAT'S WHAT THEY SHOULD SELL. I don't care how fast comcrap claims to be. I WILL USE what I am promised, period. If they can't provide what they are advertising, then they should be punished.

What if honda advertised their civic as getting 160mpg, and the real world it only got 10mpg. Would you stand by and accept that? Of course not. So why does comcast get to advertise 'always on' speeds of 10mb/sec, when the reality is they can only provide 'always on' speeds of 1mb/sec? Guess people wouldn't be willing to shell out $60.00/month for 1mb/sec, so they LIE.

We don't want caps. We don't want meters. We WANT WHAT THEY ARE ADVERTISING.
--
The happiest countries are the most secular. The struggle AGAINST corporations is the struggle FOR humanity!

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fiberguy @ 1st Aug 12:45PM:
Re: Metering is a Scare Tactic

I'm not a republican... get your facts straight.

And please, where did comcast advertise "always on speed"? If you actually knew what you were talking about, you'd know what "always on" refers to. I suppose you recall the day of "always on" and "always available" broadband connections don't you? Always on meas just that.. always available meant you clicked an icon to "connect" your broadband, same as how mobile BB works today. They both have their speeds, however, their connection types do not dictate speed.

Further, they also never told you that you could use the service always on 24/7. They DID tell you that the service 1) could be managed and 2) that it was for typical residential use. Is it typical for residential use to be always on and used wide open? No!

I'm sorry that the AUP/TOS actually requires people to apply and use logic and that noodle between one's ears. I guess that's what people get for assuming. Maybe people will learn and wake up as to what happens when people want everything dictated to them.. oh wait.. you're getting it now!

Want to tango?
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anon @ 1st Aug 12:46PM:
Re: Metering is a Scare Tactic

I'm not sure why you are being so hostile; perhaps that's just a function of message board behavior.

You seem smart enough to realize that there are differences in the "metering" trial balloons floated by TW, vs. the practice of high bandwidth limits followed by throttling or overage charges. My point was the former would actually hurt the ISPs bottom line, while the latter is actually a more reasonable approach to the problem of congestion caused by the minority of users during a few hours of each day.

You grossly mischaracterize the positions of NN advocates, which isn't very productive. You also seem to be unaware that the Union's position on the issue of NN is opposed. The union believes in reasonable network management.

My point in posting was to highlight the fact that ISPs will always do what's good for the bottom line, and TW or Frontier style low-cap metering will not be a winner for them financially. They of course have the right to charge whatever they like, but I'm proffering that they will adopt a practice that is more in line with what comcast has leaked, or what other small cable operators do (small-time window limits, with temporary throttling).

And as to your point below comparing bandwidth to gas or electricity. You should be aware that those are industries where the marginal costs are not close to zero, unlike the data industry. It doesn't make economic sense for gas or electricity to be sold like bandwidth or cell minutes.
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backness @ 1st Aug 12:56PM:
Re: aGREED!

ok buddy,

get off the soap box.

70$ a month plus 1.50$ per gigabyte over a 60gb cap is silly.

how can you argue with that? Especially when the cable nodes are so oversold that the conenction drops radomly.

Do you deny that Rogers exists as a company?

The poster above is obviously asking for a base charge of aprox 15$ and charge me a reasonable price per gig and him (and me)will be all over it (mcuh like water/hydro billing).

What these isp's want is to add another line to the accounting statment (keep the line "revenue from cable internet" just above it how it is and add revenue from gouging customers. They want to charge your grandma 70$ per month for her connection and then turn around and charge her grandson, who I might add is the future of the country, another 40$ without spending a cent on upgrades.

To finish up, You are completely ignoring the conflict of interest between cable internet and cable tv. Again, we'll go back to Acounting 101, what happens to the big boss of Rogers when the line "revenue from cable tv subscribers" starts to decline much like "revenue from phone subscribers" has been declining for much of the decade?
Where is the incentive to upgrade the internet? These companies know that by building out the internet they are shooting themselves in the foot. What we are experiencing now is the benefit of few (cable/telco) to the detriment of many (indy service providers, thousands of business models that can't exist under the current infrastructure, the list
goes on).

The internet is changing the world. The days of fat cats sitting in an office scheming on world domination are over. Much like Bittorrent your nemesis, production (of all kinds) will be more decentralized with moneys going to the people who actually produce something of value (and not organizations who seek to control distribuition).
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fiberguy @ 1st Aug 12:59PM:
Re: aGREED!

I have to disagree on one aspect with you, too. Knowing what it costs them because of the work you do and the negotiations is not accurate. The people you work with, honestly, may not even know either. Besides, when it comes to non-profits, you never know if they are taking losses on the product. Rather, they take tax breaks.

To be honest, I in one of my businesses, I will actually sell below cost a product to the local police house for two reasons... 1) I could, if I wanted, take a tax break. 2) It's a good gesture.

For the most part, I agree largely with your post. ;)
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fiberguy @ 1st Aug 01:12PM:
Re: aGREED!

I'll get off the soap box if you give up the tinfoil "buddy"... deal?

Not all cable nodes are "over sold" as you stated.. You, like many, act as if you have facts and stand behind them when in fact you have NO idea what you're talking about. I can pretty much tell you that you're spewing what USED to be true in large years ago. Times have changed.

Second, the very reason that connects are "dropping" (which is interesting) or, more appropriately slowing down, is because people are in fact pushing the node traffic faster than they can keep up.

I'm not ignoring a damn thing. I honestly don't care about TV and Cable conflicts. It's a personal issue that you have, as others do as well. You, like so many, trivialize this issue, again, all while living in some utopia. You see it as "the internet" and you want to use it as you see fit. The REALITY is that there are real costs as well as Cause and effect to a system (economical) that isn't as "simple" as you make it seem.

And now, to top this off and tear you apart.. "people who actually produce something of value".. are you an idiot? It's all the same content, just a different way to get it to you. The ONLY thing you seek to see different is that you don't want to actually PAY for that content.

You're transparent as the window in front of me.. "fat cats"... you make me laugh. You know, you can sit up north and try to throw daggers down at the United States all you want.. while everyone else is trying to "revolutionize the world" and bring about change "for the better".. please answer me this.. which country does everyone run to for help and money, even in the shrinking dollar at the moment, when they need it? yea.. enjoy your utopia as it only exists in your mind. It is YOU who need to expand your thinking beyond the "use" of the internet and look at the whole picture. I wish I had the money or a company I'd didn't care if it failed and let you run it. I'd enjoy showing you how people like you would destroy it, OR, how fast you turn into one of those so-called "fat cats" who seek world domination.

I've got news for you.. they could build the internet out to be a 1 gig line tomorrow and it won't change the fact that it's a model that requires billing by the byte. Like you said, the internet is revolutionizing the world.. however, you honestly don't want the internet to evolve with it other than speed. The REALITY is that as times change, so WILL the way you pay for the internet too. Deal with reality.
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fiberguy @ 1st Aug 01:26PM:
Re: Metering is a Scare Tactic

Actually, I will admit that I DID mis-read something you said in your post which when re-reading it does make me see your post differently. (Sorry)

But, I do stand on my view of NN advocate's position. Indirectly, with out realizing it, they ARE asking for what they are getting.



Pulled this part of my post to rethink it.. it was deep and I don't think I gave it enough thought.. I'll rethink it and probably post it again later.
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espaeth @ 1st Aug 01:26PM:
Re: Go USA!

said by Matt :

Metered billing is nothing but a concerted push to kill off competing video services
The problem with that statement is that there is no way for Internet video services to be any kind of serious competition to existing video distribution.

Comcast stated last year that they have 190 million VoD views per month.

Let's break that down for a second. The majority of VoD content is 2 hour movies, but there's quite a few hour long shows on there as well. Let's assume the average content length is 90 minutes. Let's also assume that the distribution of content viewed is 40% HD, 60% SD. By viewing capability I believe HD is actually lower than that, but folks with HD tend to have more disposable income to spend on VoD.

I estimate that 90 minutes of broadcast quality H264 encoded SD content is approximately 1.8-2.5GB. I also estimate that 90 minutes of broadcast quality H264 encoded 1080i HD content is approximately 6-10GB.

The peak time for VoD is 5pm - midnight, but longer hours of delivery can be seen on the weekends. I'll be generous and average the delivery over 12 hours 7 days a week.

40% of 190 million views is 76 mil.
60% of 190 million views is 114 mil.

76,000,000 * 6,000MB = 456,000,000,000MB or 456 Petabytes.
114,000,000 * 1800MB = 205,200,000,000MB or 205.2 PB.

661,200,000,000 MB (total for the month) / 30 days / 12 hours / 60 mins / 60 seconds = 510,185 MB/sec or 4,081,481 megabit/sec *AVERAGE* over the month. (peak will be higher)

There's no way to push 4+ terabit at any single point on the Internet using technology deployed today, so in order to distribute that content you'd need at least a point of presence in every major metro area to distribute the load. By the time you got done building out the infrastructure, paying for servers and content replicated to each regional distribution point, paid for large capacity Internet connections to all those locations, and paid the media companies for the content ... how is it realistic that you are ever going to compete on price with existing video sources (Cable/Sat/FiOS/Uverse) that only pay the media companies directly for content to distribute over their networks designed and built to deliver video?
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anon @ 1st Aug 01:32PM:
Re: Metering is a Scare Tactic

They are operating flat, and making huge profits doing it. I don't see your point. Are you claiming that ISP are selling at or below cost now?
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Pizz @ 1st Aug 01:42PM:
Re: aGREED!

My CTO said it best. "I guess the Analysts in various MSO's didnt do their job correctly.' To further the point home.

Every single MSO - had years to build out a network, that wouldnt have this 'bandwidth crisis' or 'congestion', they seem to tout now. But instead, they raked in the profits, and kept on selling and selling their 'always on 24x7 UNLIMITED connections'. So they could rival DSL offerings.

Does it cost money to upgrade networks? Yes, does it take certain management to maintain those networks Yes it does. But not at which the MSOs are trying to go at.

Btw - Caps in Euro/Asian markets are mainly on the upload side, due to competition on their VOD / TV products. While download remains the same. And Japan still gives users a crazy amount of cap room on their upload, Nearly 1TB a month.
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Xizer @ 1st Aug 01:44PM:
Let the free market decide!!!

...to rape us in the ass.

RON PAUL '08: Cover your asses
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Kearnstd @ 1st Aug 01:44PM:
Re: Metering is a Scare Tactic

the problem with metering is so many ISPs think that small caps are the answer. 500gb a month is a good cap, most people will never touch that and super heavy users will pass it.
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports

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tshirt @ 1st Aug 01:55PM:
First, while the cost of bandwidth continues to drop,.....

What you are ignoring, Karl, is that while the raw transport cost may be dropping, the cost of owning/maintaining/improving "the last mile" is rising much faster, as well as the average GBs consumed per sub is also doubling/quadrupling per year leading to a higher overall cost per sub, at the same time (at least in ComCast's case) the price of HSI has remained the same.
Some sort of cost control was inevitable.
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voipdabbler @ 1st Aug 01:59PM:
Capping plans skirt local regulators, too.

Federal regulators and legislators have never really cared about price controls for cable. That's an issue regularly left to state or local authorities. Those entities do look at cable rates. Low caps are a way of raising rates in such a manner that you try to skirt objections that might be raised by state regulators if you had the courage to raise your rates to reflect the profit you really want to make off your customers. (I'll say it again,given the economy, it's wrong-headed thinking for telcos and cable providers to think they can soak consumers and keep their market base. The average American's budget is being stretched to the point that non-essentials are being dropped. Credit is tightening and many who whipped out credit cards for their instant spending fix are now in a cold sweat, since credit is tightening and they can't get new cards to help juggle payments they cannot afford. If it comes down to the wire, a number of people are going to drop broadband Internet. Might just be time to buy stock in Earthlink--dialup may see some growth again if economists' predictions about things not getting better until 2nd Q next year, at the earliest.)

I also think the competition that the telcos and cable want to kill off is broader--yes, it includes video, but it also includes VOIP and every new potential net-based service that might be profitable. To that extent, it's a huge Net neutrality issue. I've said it before, but maybe it's time to look at splitting up any Internet provider that also wants to deliver content or non-Internet Provider services. That way the spinoff companies that deliver Net content, not basic pipes, can be forced to play on a level playing field with all competitors.

Let's just hope the deep pockets on the other side of the Net neutrality debate raise the red flag on the issues raised by low CAPs.
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badtrip @ 1st Aug 01:59PM:
Re: aGREED!

Wow, you inferred alot of nonsense from my post. I didn't think I wrote enough for someone to twist it into a vague corporate apologist diatribe. Grats on that.

Internet access most certainly is a utility. It performs essentially the same function as a telephone service, communication. As a matter of fact, I'd argue that internet access will soon completely replace the dedicated telephone line.

Further, thanks for your misguided concern but being 38 and living on my own since 18, I am quite aware how public utilities are billed. I have no problem with usage based billing if it is reasonably priced. It makes perfect sense for a household that uses more bandwidth pay more than a household that doesn't. My problem is we were sold "unlimited" usage for a set monthly rate, now they want to tack on "overage charges" on top of charging us the same fee for "unlimited" usage. It's nothing more than a money grab and it stifles competition from emerging technologies.

I never said the internet has matured. Go ahead and reread my post. Notice it does not state that and the post has not been edited. I said:

"It is common knowlegde that as a technology matures, it's cost decreases. Cable ISP tech, however seems to buck this trend and instead of costs decreasing, they rise."

Initially I paid $50 a month for 1.5/368k DSL service thru Pacbell years ago (back when it was still Pacbell). I ordered service the day it became available in my city. Today, a comparable plan goes for what, $20-30$ per moth at the very most? Compare that to Comcast. How many times has your cable bill gone down for the same level of service? If I was to bet, I'd bet on "never".
reply
MisawaGQ @ 1st Aug 02:00PM:
Meter

As this news post says, the real issue isn't whether metering is good or bad, the issue is whether ISPs are going to be reasonable with how much they charge for bandwidth. When a gigabyte of traffic roughly costs $0.05, and a monopolistic ISP is charging upwards of $1 for that gigabyte, there's a huge problem. That also includes ridiculously low caps compared to how much the service costs. For example, Bell Sympatico charging $48/month for a connection that includes 60 gigabytes of bandwidth. It's completely laughable.
--
"Let them hate, so long as they fear" -- Lucius Accius

reply
a333 @ 1st Aug 02:01PM:
Re: Let the free market decide!!!

I wouldn't have a problem with bill-by-the-byte. But, I DO take offense when they keep the base price the SAME, and then slap on OUTRAGEOUS per-GB fees. That's just BS. It cannot cost EXACTLY the same to provide 'unlimited' and metered service. It's like McDonalds offering unlimited refills for $1.50 initially, then putting a 'no refills' sign over the coke machine but STILL charging $1.50. That's BS. I'll take per-byte billing gladly if:
a) Reduce basic rate to $15/month, with a 50 GB cap included.
b) Charge $1.00 for every 10 GB over the limit.
c) Have a 'night unlimited' period that uncaps the speed to the max for the node, and lets you do unlimited transfers from say, 11 pm to 6 am.

If they do the above, Grandma Ginny can see greatly reduced bills, and thus get a nice cheap connection to see e-mails/small web pages. At the same time, Danny Downloader gets a fast connection and can just set his download manager to dl all his warez starting midnight.

But WAIT, this isn't convenient, as they aren't getting to rape normal+ nominal users in the @$$.. nevermind......
I can dream on.........
reply
Matt @ 1st Aug 02:07PM:
Re: Go USA!

espaeth, you don't have to push 4+ terabit right now, but I'm sure Netflix would like to have that problem. After all, they have a distribution center in every metro area for their movie mailings, so why not a small datacenter too?

So while you're correct that it's not feasible - for a single company - you're assuming a single company would have to come out of the gate able to push 4 terabits of info when in actuality, it would be a gradual buildup that eats away at the MSOs VoD market, spread across several individual companies.

AT&T is CURRENTLY shuffling 5.4 PETAbytes of traffic a year, which is 44,236 petabits ... and that's just one network.

Could a single company deliver 4 terabits a second of output from a single datacenter? Obviously not, but if a company needed to move that kind of traffic, they'd have the money to throw at the problem, like in the form (ala Google) of regional POPs. I can think of a few companies that would lick their chops to have the problem.
reply
Xizer @ 1st Aug 02:15PM:
Re: Let the free market decide!!!

Quite frankly, $1 per GB over is still ridiculous. If you were to want to double your monthly usage, for example, you'd have to pay $250. That is beyond ridiculous.

Comcast pays about 2 cents per gigabyte. Charging us $1 per gigabyte is price gouging. That's a 5,000% mark-up.
reply
backness @ 1st Aug 02:17PM:
Re: aGREED!

Where to start, your ramblings are almost incoherant.

I'll draw you a map of the flow chart of information if it helps.

writer > network > cable co. > user

In the future, you'll have:

writer > independant capital > user

You should not need a business degree to see that moving this data in the "old way" has become so painfully expensive that it is cost prohibitive to keep all but the most popular shows on for more than 8 weeks.

Under option 2 content can be created and supported by a GLOBAL AUDIENCE. Thereby reducing the number of people required per geographic region to support the creation of the content.

This scenario will repeat its self in most areas of business. The global conglomerate will be far less important than the company that can sucessfully stick to its knitting and produce something unique that the world values (much like the popularity of bittorrent).

Again, i'm not against billing by the byte, but what companies like Rogers in Canada are offering is full priced service coupled with overage charges (which is not the same as useage based billing).

Also your anti-usa comments are right out of left field. I'm not against the USA. I like american values, what I don't like is the push that most companies are offering these days towards screw the consumer, give him less than what he has gotten historically, instead of looking at the company objectivly and cutting fat where required. Why is it always the consumer who ends up getting the shaft when dealing with these large telco/cableco who consitatly offer with less product for more money? In canada it comes down to competition (or lack there of). In the USA? AT&T has been putting its self back together in a frankestien like way (as is verizon).

Now I don't expect you to be forward looking enough to understand this part but i'll repeat for clarity.The future of business, is small groups of people (who are actually producing something of value) serving very specialized needs of consumers globaly (that means specialize kids if you want to eat). As opposed to a management accounants wet dream of adding revenue streams for less product elivered.

The companies/people that adapt to this will thrive the others will live miserable why me lives.

reply
danclan @ 1st Aug 02:31PM:
And just where are these bottle necks

they speak of? The core? Nope. The Stubs? Nope. The last mile? AH HAH! How can we infinitely leverage our copper last mile technology while screaming its all about the core....lets see...
reply
espaeth @ 1st Aug 02:39PM:
Re: Go USA!

said by Matt :

After all, they have a distribution center in every metro area for their movie mailings, so why not a small datacenter too?
I can think of a few hundred million reasons.

said by Matt :

AT&T is CURRENTLY shuffling 5.4 PETAbytes of traffic a year, which is 44,236 petabits ... and that's just one network.
The numbers I ran calculated out to 22petaBYTEs per day. That's only VoD traffic, and that's only for a single MSO.

As soon as you apply scale to Internet video the idea starts to unravel rather quickly. By the time any company scaled out to be a serious competitor, their infrastructure costs would be so great that they'd no longer be able to compete on price with MSOs.
reply
anon @ 1st Aug 02:47PM:
msg deleted

deleted by a moderator
reply
Millenniumle @ 1st Aug 02:50PM:
...

Without government intervention it really doesn't seem too unreasonable to believe that US based internet could be all but priced out of existence by major ISP's; ones with the ability to provide their own content. The incentive is high to "prevent by price" all content but their own over their networks. It's plus-plus for them to sell their own content and gouge out everything else.
reply
packetscan @ 1st Aug 03:02PM:
Re: aGREED!

Haha..
reply
Matt @ 1st Aug 03:08PM:
Re: Go USA!

said by espaeth :

said by Matt :

After all, they have a distribution center in every metro area for their movie mailings, so why not a small datacenter too?
I can think of a few hundred million reasons.

said by Matt :

AT&T is CURRENTLY shuffling 5.4 PETAbytes of traffic a year, which is 44,236 petabits ... and that's just one network.
The numbers I ran calculated out to 22petaBYTEs per day. That's only VoD traffic, and that's only for a single MSO.

As soon as you apply scale to Internet video the idea starts to unravel rather quickly. By the time any company scaled out to be a serious competitor, their infrastructure costs would be so great that they'd no longer be able to compete on price with MSOs.
It certainly doesn't cost hundreds of millions of dollars to build a regional data center. AIG just built one for a few million to serve their operations here. Again, it's not as if they'd have to have 100 of them scattered around the country at the start and they wouldn't have to be massive. The Time Warner RDC here was mostly empty. They had 50-100 servers perhaps to serve MILLIONS of VoD customers in the region. That is a flawed assumption just like the assumption they'd immediately have to push out the equivalent amount of VoD traffic as the MSOs.

This isn't rocket science and the technology and business practices behind it are well known. You don't think the Microsoft's and Google's of the world have the expertise and capital to do this?

Hell, even my bank (Bank of America) uses regional data centers to distribute load.
reply
packetscan @ 1st Aug 03:15PM:
Strait BS

"Net neutrality proponents.... would prohibit Internet service providers from using price to address the ever-growing popularity of streaming video and other bandwidth-intensive programs that cause bottlenecks."

Bottlenecks eh? comcast was said to use 5-7 percent of their available Bandwidth at any given time.. And yes that is out of 100. So technically any bottlenecks are on their end based on their unwillingness to spend on capital upgrades to bring them up 2 date, just another tactic to avoid spending money to appease the market.
--
Reach out and Tap someone!

reply
funchords @ 1st Aug 03:43PM:
Re: Go USA!

Australia is the only one that I know of, although Canada may be next.
reply
anon @ 1st Aug 03:44PM:
Telcos deliberately give Google better prices

"In 2005, then-AT&T CEO Ed Whitacre told Business Week that because people use Google, Google should help pay for AT&T's network deployment (or as Ed put it, Google ain't usin' his pipes for free)."

Google buys fat pipes from their data centers from a multitude of carriers to support the demand their service generates. If the telco's weren't falling over one another to offer Google the lowest price possible for the fat pipes, then maybe ATT et. al. would have more money to expand their capacity (they'd have to first cut CEO pay).

Google gets preferential pricing per gigabyte of network capacity because that's how most pricing models work - give your biggest customers the lowest price possible because at the margin the cost of delivery is next to nothing.

That the telco/cableco's want to now jack up end consumer prices by creating metered use and throttled tiers of service is the net result of their dropping their pants and bending over for Google in the first place.
reply
anon @ 1st Aug 03:46PM:
Re: Go USA!

said by funchords :

Australia is the only one that I know of, although Canada may be next.
Bell Canada is now talking about 60Gb/month caps, which isn't a lot for a household of four with a couple teenagers.
reply
funchords @ 1st Aug 03:56PM:
Re: Metering is a Scare Tactic

You are confusing a lack of opposition for advocacy. Generally, pay-by-the-byte has nothing to do with Network Neutrality, so Network Neutrality groups don't oppose it. But none of us want it.

My canned explanation of Network Neutrality:
Network Neutrality is the name given to a set of guiding principles designed to continue the Internet's interoperable, non-discriminatory, end-to-end processing tradition. The Internet (the routing and forwarding network) was originally neutral because it generally lacked any information or capability that would make it otherwise, and since "more speed" was the demand, improved hardware capabilities over time was usually spent delivering more speed (not more functionality like DPI).

In recent years, network operators and network hardware manufacturers have been focusing less on speed improvements and more on services. As one might expect with any new and powerful technology, some of these uses are genuinely useful while others tend to be quite questionable and immature.

In short, today's Network Neutrality efforts seem focused on maintaining the free, open, and level playing field that the Internet originally created.

Now, that said, those who have any sense of history remember what happened when AOL went flat-rate. It tipped the pot, all ISPs went flat-rate, and the Internet exploded in popularity, freedom, and investment.

Nobody in the Network Neutrality movement (I don't like to call it a movement, because it's more of a preservation effort) is against network management. The networks have always been managed. In fact, it's the operator mismanaging his network that makes it possible -- if true -- for 5% of its users to commandeer 95% of the bandwidth. That is a simple resource allocation management problem -- that ISP needs fewer users splitting the bandwidth or more bandwidth to split. But what did Comcast do? It RAISED the uplink speeds on its modems by THREE TIMES in the past year without also tripling the bandwidth that they shared! That's network mis-management.

We're against allowing an ISP to use DPI to decide what applications we can and cannot use. The Internet became this open, democratic, free-market, conveyance of liberty without the assistance of DPI. Networking hardware manufacturers now introduce it as "necessary" for "network management" and it is simply not true.
--
Robb Topolski -= funchords.com =- Hillsboro, Oregon
More fun, more features, Join BroadbandReports.com, it's free...

reply
funchords @ 1st Aug 04:02PM:
Re: Metering is a Scare Tactic

said by karlmarx :

wow, more 'talking points' from a fat republican. Why am I not suprised.
And FWIW, you can consider me a Republican (I'm a fiscal conservative and a free-marketer -- I traded my GOP card for a Libertarian one a few years back when the party decided to hate everyone who wasn't a straight white male).

Network Neutrality isn't about Republican or Democrat, Left or Right, Conservative or Liberal. It's about recognizing the tremendous good that the Internet has brought to all of us and doing what we ought to do to maintain that resource for generations to come.

said by karlmarx :

We don't want caps. We don't want meters. We WANT WHAT THEY ARE ADVERTISING.
Amen, brother!
--
Robb Topolski -= funchords.com =- Hillsboro, Oregon
More fun, more features, Join BroadbandReports.com, it's free...

reply
NGOwner @ 1st Aug 04:06PM:
Re: Metering is a Scare Tactic

said by funchords :

In fact, it's the operator mismanaging his network that makes it possible -- if true -- for 5% of its users to commandeer 95% of the bandwidth. That is a simple resource allocation management problem -- that ISP needs fewer users splitting the bandwidth or more bandwidth to split.
I think there is a third option. I'd say that the operator should manage the user in this case. Tweak the 5% causing the problem.

[NG]Owner
reply
funchords @ 1st Aug 04:10PM:
Re: Go USA!

Bell Canada and Comcast both seem to have the same attitude toward their countries: "Oh yeah, make me!"

I wish you luck in your fight. The CRTC seems to be coming around, just like our FCC unexpectedly said 9 months ago, "Hey, there actually -does- seem to be something fishy going on here!"
reply
espaeth @ 1st Aug 04:13PM:
Re: Go USA!

said by Matt :

It certainly doesn't cost hundreds of millions of dollars to build a regional data center.
Again, Matt -- Scale. We're not talking about a regional data center, we're talking about many regional data centers.

said by Matt :

Again, it's not as if they'd have to have 100 of them scattered around the country at the start and they wouldn't have to be massive.
I'm not disagreeing with that. The companies providing video today are getting it done with a very limited number of data centers, but they're also only serving a minuscule fractional percentage of total overall video delivery.

said by Matt :

The Time Warner RDC here was mostly empty. They had 50-100 servers perhaps to serve MILLIONS of VoD customers in the region.
Assuming they were GigE connected, that's still a massive chunk of bandwidth to replace using current Internet infrastructure.

said by Matt :

That is a flawed assumption just like the assumption they'd immediately have to push out the equivalent amount of VoD traffic as the MSOs.
You're the one that made the argument that fear of video competition was driving metered usage. In order to be competing service, you at least need to be able to absorb enough subscribers that you pose a credible threat.

said by Matt :

You don't think the Microsoft's and Google's of the world have the expertise and capital to do this?
They have the capital, but hopefully they've also learned the lessons of the Dot-com bust. The Internet doesn't magically make everything cheaper. In order for the service to have a chance you need to either provide additional functionality, improve speed of delivery, or reduced costs. So far for video services, you've talked about services that at best offer equivalent functionality and speed of delivery to MSO VoD solutions. In reality, Internet video solutions require that you buy specialized hardware on your dime if you want to hook it up to your TV, you're responsible for getting your own network signal out to that device to make it function, and you have to pay for your Internet connection on top of the Internet Video subscription / viewing fee. This is in contrast to the MSO solution where they come out, they give you a box (leased for a couple bucks a month), they wire it up for you, and it Just Works™. The only play you have left is to compete on cost, and at scale I find it highly unlikely that Internet video companies are going to get better pricing from content providers, and the delivery costs are going to be higher for Internet video sources because there are more companies in the middle (Internet access/distribution) that all have to show profits as well.
reply
espaeth @ 1st Aug 04:17PM:
Re: Metering is a Scare Tactic

said by funchords :

But what did Comcast do? It RAISED the uplink speeds on its modems by THREE TIMES in the past year without also tripling the bandwidth that they shared! That's network mis-management.
They also changed the upstream modulation in the vast majority of their markets which increased upstream shared capacity from 9mbps to 27mbps channels.

Details.
reply
anon @ 1st Aug 04:21PM:
I see the same people posting the same tired argument

If you actually gave real cost of operation numbers, down to the linemen who repair the lines and the electricity to run it all. I am sure you would find there is a large profit margin, and has been a large profit margin for many years now.

A bit, or a byte, doesn't have any real cost, as it's just some low voltage signals shaped in such a way as to carry data. It's the support infrastructure that is the real cost.

The problem with most of these arguments for charging consumers more and more, as I see it, is that the infrastructure has largely already been there for quite some time. These companies didn't put up the poles, and the lines have been in place for a long time, even before the Internet. They just ran more lines in the pre-existing tunnels and over pre-existing poles, and added new equipment only when absolutely necessary to already existing infrastructure. So the idea that they built the entire Internet and did it at a loss, just for the consumers benefit, because they loved us so much, is really horse sh*t, and every American knows it.

Can anyone do the math here? 50$ a month for each subscriber for the total life it has been available, minus real cost of support, should leave you with an enormous amount of capital. Where did it go? Where did all that profit go? It didn't go into deployment. Each year, the price of the equipment to operate these devices has become cheaper and cheaper at the expense of the people in TW and CN, who work in labor factories for dirt cheap wages, and no benefits, so these companies could lower the bottom line of deployment costs.
Most people think 50$ a month is too much to pay, and the older population has refused to sign up for that very reason.
So now fast forward, and we have run into the real problem today, and that is everyone sees the death of the local cable company looming, along with traditional monopolistic services that have refused to move with technology. They want to delay this by destroying their own model and killing any and all competition. The only way to do that is to make it appear as if the communication companies are "messiah like" in their sacrifice for us all, allowing us to send our little imaginary packets of hurt and pain across their ravaged bodies and now they are about to die because we "the consumer" have used their services and raped a limited resource to the point of collapse (a resource that is imaginary, and only costs 1/25th of the amount they are pulling in, to support), and the whole dam* Internet is going to explode, unless we all agree to pay 250$ - 500$ per person a month, and not complain about it, otherwise we are all communists.

Yes, I really hope that "the people" are really that stupid.
The problem is your model of business is going to collapse, and you know it. It won't work anymore. Data is data, is data. So you can't keep discriminating and stomping your feet to charge for every type of service you can dream up.

Eventually there will be IPTV, and it will be on a global scale. All forms of communications will flow, whether it be 3D TV data, or 2D TV, or independent producers, music producers, artists, medical, video communications, books, school, etc...!!! They know this, and they want to stop it, because it sends a big FU (middle fingers up) to the people who have controlled what we see and watch for so long. It means the controlled distribution model which ensures the mass wealth into the hands of the 1% will be threatened, here, and world wide. These companies understand this, make no mistake, and they are just playing with propaganda and fear tactics to see how people respond to it.

The problem with that? While they may keep their tight grip on media content (and thus secure profits) on a National level, eventually the other Nations will move forward with the inevitable model and it will destroy the economy of the countries that refuse to change. Technology will continue to move forward globally. The corporations can't bribe, lobby, and regulate their way out of progress and proliferation. (we'll actually in the US they can, and our ranking in standard of living shows this point well)

The standard of living is dropping like a lead balloon in this country, and it has nothing to do with "what the consumers are willing to pay", it has everything to do with what the corporations did with their profits.
reply
karlmarx @ 1st Aug 04:34PM:
Re: Metering is a Scare Tactic

Ok, I'll play. You agree that they advertise ALWAYS ON, correct? That's still in use today. So, the fact that it's 'always on', means that I can use it at 2:00 in the afteroon, and I can use it a 4:00 AM the next morning. I mean, it's ALWAYS ON, right? So, lets say I'm an evil pirate (I may just be one). If I want to PIRATE something big, say, "The X-Files Seasons 1-8", which is a 70GB torrent, well, that's going to take a long time. But I'm not worried, because my connection is 'Always On'. Thus, at 6Mb/sec, It will take about 30 hours to download it. Since my connection doesn't turn off, I start it at noon, and by 6:00 PM the next day, it's done! Always on.

Now, is that 'typical residential use'. Maybe, maybe not. Please show me the document that clearly states what 'typical residential use' is, and I'll follow it. Oh, wait, you CAN'T, because 'typical residental use', is a VAGUE and UNDEFINED philosophy.

Look at it this way. If my node has 150Mb/sec, and there are 200 people on it, then the SOLUTION is very simple. ONLY SELL 1mb/sec! Thus, I CANNOT SATURATE THE NETWORK. PERIOD. If I only get 1mb/sec, then I can not use more that .60% of the total bandwidth of the node in a single month! That's not too hard for you to understand is it?

But NO, they go and advertise 16mb/sec, when they FULL WELL KNOW the node cannot support that. THAT is why people are pissed. They aren't pissed because it's 'too slow', let's be honest, 1mb/sec is PLENTY fast for 'web browsing' and 'e-mails'. They are pissed because the ADVERTISING doesn't match the PRODUCT they are selling.

The only thing I am advocating is that the cable companies only SELL what they can provide. The simple fact of the matter is that CABLE can't hold a candle next to FIOS. I'm on FIOS, I get 30/15, AND MY NODE CAN SUPPORT IT, even if I use it 7x24x30! Very simple. THAT'S why I got FIOS, not because it's faster (it is), but because it's BETTER.

Comcast should sell 1mb/sec x 256k/sec, because THAT'S WHAT THEY CAN PROVIDE. Oops, guess they will have to lower their prices, A LOT, cause they've spoiled people into thinking that they deserve 16mb/sec for $60.00/month. That's an out and out LIE. I don't DESERVE a 16mb/sec for $60.00/month, but I do deserve a 1mb/sec for $60.00/month. And if I'm on FIOS, well, since it's a much better technology, I deserve 30mb/sec for the same $60.00/month.
--
The happiest countries are the most secular. The struggle AGAINST corporations is the struggle FOR humanity!

reply
funchords @ 1st Aug 04:35PM:
Re: Go USA!

That's an impressive post (ya'll ought to go back and read it).

But the competitive threat to Wal-Mart doesn't come from the chance of another Wal-Mart springing up, it comes from the dozens of other choices in town.

It isn't Comcast vs. Vuze, it's Comcast vs. The Internet. Or am I missing something? Are you saying that The Internet, in aggregate, still can't compete with OnDemand?
--
Robb Topolski -= funchords.com =- Hillsboro, Oregon
More fun, more features, Join BroadbandReports.com, it's free...

reply
roadrun777 @ 1st Aug 04:36PM:
The National model of business is dying a hard death

If you actually gave real cost of operation numbers, down to the linemen who repair the lines and the electricity to run it all. I am sure you would find there is a large profit margin, and has been a large profit margin for many years now.

A bit, or a byte, doesn't have any real cost, as it's just some low voltage signals shaped in such a way as to carry data. It's the support infrastructure that is the real cost.

The problem with most of these arguments for charging consumers more and more, as I see it, is that the infrastructure has largely already been there for quite some time. These companies didn't put up the poles, and the lines have been in place for a long time, even before the Internet. They just ran more lines in the pre-existing tunnels and over pre-existing poles, and added new equipment only when absolutely necessary to already existing infrastructure. So the idea that they built the entire Internet and did it at a loss, just for the consumers benefit, because they loved us so much, is really horse sh*t, and every American knows it.

Can anyone do the math here? 50$ a month for each subscriber for the total life it has been available, minus real cost of support, should leave you with an enormous amount of capital. Where did it go? Where did all that profit go? It didn't go into deployment. Each year, the price of the equipment to operate these devices has become cheaper and cheaper at the expense of the people in TW and CN, who work in labor factories for dirt cheap wages, and no benefits, so these companies could lower the bottom line of deployment costs.
Most people think 50$ a month is too much to pay, and the older population has refused to sign up for that very reason.
So now fast forward, and we have run into the real problem today, and that is everyone sees the death of the local cable company looming, along with traditional monopolistic services that have refused to move with technology. They want to delay this by destroying their own model and killing any and all competition. The only way to do that is to make it appear as if the communication companies are "messiah like" in their sacrifice for us all, allowing us to send our little imaginary packets of hurt and pain across their ravaged bodies and now they are about to die because we "the consumer" have used their services and raped a limited resource to the point of collapse (a resource that is imaginary, and only costs 1/25th of the amount they are pulling in, to support). They want us to think the whole dam* Internet is going to implode, unless we all agree to pay 250$ - 500$ per person a month, and not complain about it, otherwise we are all communists.

Yes, I really hope that "the people" are really that stupid, for the sake of these people who keep blowing the "horn of doom". Otherwise they will look like the completely greedy a**s that we all know they are.
Attention Networks and Communications Monopolies: Your model of business is going to collapse, and you know it. It won't work anymore. Data is data, is data. So you can't keep discriminating and stomping your feet to charge for every type of service you can dream up.

Eventually there will be IPTV, and it will be on a global scale. All forms of communications will flow, whether it be 3D TV data, or 2D TV, or independent producers, music producers, artists, medical, video communications, books, school, etc...!!! They know this, and they want to stop it, because it sends a big FU (middle fingers up) to the people who have controlled what we see, hear, and interact with for so many generations now. It means the controlled distribution model, which ensures the mass wealth into the hands of the 1%, will be threatened, here, and world wide. These companies understand this, make no mistake, and they are just playing with propaganda and fear tactics to see how people respond to it, or to groom every one for a reversal of progress.

The problem with that? While they may keep their tight grip on media content (attempting to secure profits) on a National level, eventually the other Nations will move forward with the inevitable model of a data highway that promotes competition and improvement. This inevitable model will destroy the economy of the countries that refuse to change. Technology will continue to move forward globally. The corporations can't bribe, lobby, and regulate their way out of progress and proliferation(actually in the US they can, and our ranking in standard of living shows this point well).

The standard of living is dropping like a lead balloon in this country, and it has nothing to do with "what the consumers are willing to pay", it has everything to do with what the corporations did with their profits.

We entrusted our National communications infrastructure to third party corporations that had no interest in improvement or coverage. Instead they have acted in a manner that fits the definition of a "terrorist". Holding the infrastructure hostage, killing any competitors, and demanding more money.
reply
funchords @ 1st Aug 04:50PM:
Re: Metering is a Scare Tactic

said by NGOwner :

I think there is a third option. I'd say that the operator should manage the user in this case. Tweak the 5% causing the problem.
The 5% don't even know they're the problem. They're just using their computer for all that they know. They don't read DSLReports nor do they understand that their use affects the neighbors. They're sold a tier of service and they use it!

Be that as it may, if an ISP doesn't want to serve a customer any more, or change the deal, the ISP ought to be open about it. Secretly throttling, hoping not to get caught, is not a solution. Quietly changing the Terms of Service boilerplate, hoping the user will keep paying despite degraded service, is not a solution.
--
Robb Topolski -= funchords.com =- Hillsboro, Oregon
More fun, more features, Join BroadbandReports.com, it's free...

reply
funchords @ 1st Aug 04:59PM:
Re: Metering is a Scare Tactic

said by karlmarx :

Comcast should sell 1mb/sec x 256k/sec, because THAT'S WHAT THEY CAN PROVIDE.
I don't know if those are the right numbers, but I agree with the general gist of your message. Truth is, though, that with ~10 Mbps uplinks being shared by up to 125 homes or so (presuming they call subscribe), that number would be 85 kbps or so. If you are advocating to ban all oversubscription or "statistical multiplexing," then I do not think that is wise.

I think it would be fair to sell the service at bandwidths and speeds that the ISP can reliably or confidently hit. I think that "reliably or confidently" means in the 90th percentile.

I still guess as you do -- whatever the 90th percentile numbers would turn out to be, they would probably no longer appear to be competitive with DSL or FIOS and that's why they won't do this and chose to secretly attack P2P instead.
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willyjack @ 1st Aug 05:20PM:
Re: Metering is a Scare Tactic

That's not quite how it works. It's not as simple as taking your total available bandwidth and dividing by the desired speed to get the total number of people you can have on a node. It's all about utilization. By your reasoning, if I have an office network with 100 people and they all use computers with Fast Ethernet connections then I need to give them a 10 Gigabit Ethernet pipe to the Internet so they can surf at the maximum speed allowed by their connection. I can promise you FIOS network designers didn't build in enough switches so everyone on each switch had 30 Megs available to them continuously.

You also assume that all 200 of your people are fully utilizing all the available bandwidth. I'm sure they monitor utilization and they augment capacity or reduce the size of the node when necessary.

I've had office networks with small numbers of users and high utilization and large numbers of users with lower utilization.

The "Always On" they mentioned in their advertising (I haven't seen it worded like that lately) referred to the dial-up days. You had to call in to get connected. The cable modems were always connected to the network, hence the always on mention.

It's about how much they use, not how many there are.
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fiberguy @ 1st Aug 05:35PM:
Re: Metering is a Scare Tactic

There is one other thing about the Always on vs always available. I haven't had a chance or the time to tango with my post's original replyer yet. But, he still tried to twist always on to unlimited internet again.

The always on connection was not just marketing. SOME connections, mostly DSL (some cable modems) actually had a dialup broadband service. They have a connection manager software that you had to, well, basically you leased an IP and traffic went through. THAT type of service really doesn't exists outside of mobile broadband any more.

It really is not a marketing ploy.. it's a real term used to distinguish the two types of connection methods available.
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espaeth @ 1st Aug 05:38PM:
Re: Go USA!

said by funchords :

But the competitive threat to Wal-Mart doesn't come from the chance of another Wal-Mart springing up, it comes from the dozens of other choices in town.
It comes from other choices in town offering the same product. For example, Wal-Mart and BestBuy compete, but only on a small intersecting set of products that the two have in common. If Best Buy puts washers & dryers on sale, Wal-Mart has no competitive concerns because they don't sell washers and dryers.

For companies that are similar (ie, Target), they compete on other metrics than price. Target puts a greater focus on store appearance, product facing, guest relations (not customers, guests), shorter checkout lines through internal store policies, offering "designer" goods in addition to essentials, etc. You may pay a few cents more for Tide at Target, but the other aspects of the store make it worthwhile.

said by funchords :

It isn't Comcast vs. Vuze, it's Comcast vs. The Internet.
Traditional video provider vs Vuze isn't necessarily real, as the bulk of the video content on Vuze isn't available through traditional video outlets.

said by funchords :

Are you saying that The Internet, in aggregate, still can't compete with OnDemand?
I am indeed saying that. Last year Comcast published that they were moving 1.5+ petabytes a day in VoD traffic, and that was before they started massively expanding their HD content library. As Matt pointed out, the entire global ATT Internet backbone only moves 5.4 petabytes a year. If you had to replace VoD across the board with Internet based solutions, the combined backbone infrastructure of all of the carriers would be unable to scale to meet the demand unless we found some way to skip from emerging 100GigE interfaces to terabit interfaces in a big hurry. The only way it would be remotely possible is if the video distributors worked out regional connections to MSOs and basically recreated the MSO video distribution network all over again.

The satellite providers have already started to work this out. Storage is dirt cheap, so they just stream down the most popular content to a hard drive in your receiver overnight using one broadcast (highly efficient), and each individual person can watch it at their own pace (and pause/rewind/etc) as it streams off the hard drive in the device at their house.
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Kearnstd @ 1st Aug 05:57PM:
Re: Metering is a Scare Tactic

Broadband, Always on. Until the customer finds the standby button. but that is another post!
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andre2 @ 1st Aug 07:00PM:
Re: Go USA!

said by espaeth :

said by Matt :

Metered billing is nothing but a concerted push to kill off competing video services
The problem with that statement is that there is no way for Internet video services to be any kind of serious competition to existing video distribution.
Your following argument falsely assumes that to be a threat, internet video has to use the same bandwidth as VOD. The content is at least as important as the video quality and many people right now are more than happy to watch Hulu-quality video at something like 100-200 MB per hour, if the content is there. Almost all broadband connections can handle this easily.
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jslik @ 1st Aug 07:19PM:
Re: Metering is a Scare Tactic

said by fiberguy :

Further, they also never told you that you could use the service always on 24/7. They DID tell you that the service 1) could be managed and 2) that it was for typical residential use. Is it typical for residential use to be always on and used wide open? No!
Yes, but as you know, the definition of "typical residential use" has been going up and it's not the fault of the residential user that the offerings on the internet have required more and more bandwidth. As Karl notes, ISPs have been making money, so they have no excuse for not improving their networks to handle the coming demand.
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RJ44 @ 1st Aug 11:38PM:
Re: Metering is a Scare Tactic

said by karlmarx :

Look at it this way. If my node has 150Mb/sec, and there are 200 people on it, then the SOLUTION is very simple. ONLY SELL 1mb/sec! Thus, I CANNOT SATURATE THE NETWORK. PERIOD. If I only get 1mb/sec, then I can not use more that .60% of the total bandwidth of the node in a single month! That's not too hard for you to understand is it?
Do you understand how much more expensive bandwidth would be if they didn't oversubscribe, and gave each customer a dedicated, guaranteed amount of bandwidth like you're recommending they do? It sounds like you have no idea. Go price a T1. That's how much dedicated bandwidth costs. I like the oversubscription method (and concurrent pricing) just fine. Your post shows a shocking lack of understanding of economics and network engineering both.
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fiberguy @ 1st Aug 11:51PM:
Re: Metering is a Scare Tactic

Well, even though use is going up, and I agree with that statement, it still doesn't equate damn near 24/7 wide open use with P2P usage topping the list. Further, that's operating a server - no matter what anyone says. That's NOT typical residential use. Second, around here, Karl can tell people the sky is lavender with green polka dots in color and many would believe it. Just because Karl "The Slanted" News guy says its so, isn't. ISPs ARE making money, yes.. many of them, but who is to say they are not investing? You are aware that Comcast just upgraded the Twin Cities to Docsis 3.0, there are cities in Florida being upgraded as well. The Bay Area just got a MASSIVE rebuilt project. Numerous other cities are getting updates in addition to other projects.

People will see and believe what they want to in absence of the facts for convenience.

In all honesty.. the only two major players I see putting money into anything worth paying attention to is Verizon with FiOS first, then Comcast with Docsis 3.0 second.
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fiberguy @ 2nd Aug 12:05AM:
Re: aGREED!

This will be short and sweet.

1) Just because you say so that the internet is a utility doesn't make it so. It is NOT a utility. PLEASE produce ONE THING that shows the internet has been deemed a utility.

2) Your term of reasonable is objective. If the internet is so important to you, then even at $50 a month, or ever $99 a month for the 384/384 pacbell line I had as Sacramento's FIRST customer to have DSL was WELL worth the cost for me as well. I don't know.. I just see that $42 average cost of an internet connection is a bargain compared to what it used to cost for dial up with an extra line. I don't know, maybe I'm just reasonable. But, for me, if your internet connection is $42 a month, and you no longer need cable tv, or POTS line service, then is your residential internet line more valuable to you?

3) You need to forget your "unlimited" service.. hasn't existed for years. I think you're still living in PacBell days. Even if these caps are to grab money, which they are not, um.. if the internet is replacing POTS and Video every day and taking on the burden, I'd say the internet is evolving. While you want the internet to evolve, you want the pricing plans to stay in the old days. .. can't have it both ways there bub.

4) I don't need to re-read anything in your post.. I know what it said. Please tell me where your cable internet service price has risen one bit. Last I checked, the national price of Comcast internet has been $42.00 with multi-service discount. Being DSL has dropped it's price to a level that is underselling it's cost, I suppose you'd expect cable to do the same? I've said this many times before and I won't change my view on this one but the reason PHONE started this topic was because after dropping their price below their cost in order to steal customers from cable (which backfired) they realized they needed more money. What happened...? SBC Global started crying about BW use, Verizon stopped sending techs to homes unless you did 25 tricks on the phone first. Verizon couldn't provide new hook-ups because they weren't investing in their COs, what else.. shall I go on?

5) Comparing the price of PacBell DSL to Comcast is valid. You get a 1.5/384 line for 20-30 a month.. you get a 6/1 line from comcast for double.. sounds like it is reasonable to me.
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NetAdmin @ 2nd Aug 01:39AM:
Re: Go USA!

said by espaeth :

There's no way to push 4+ terabit at any single point on the Internet using technology deployed today, so in order to distribute that content you'd need at least a point of presence in every major metro area to distribute the load.
Most providers ALREADY have that. Hell, that is how VoD is delivered over DOCSIS networks already.
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NetAdmin @ 2nd Aug 01:44AM:
Re: Metering is a Scare Tactic

said by fiberguy :

Believe it or not, people have been screaming for this and been demanding it.. now they get it and don't like it.
Who are these "people" you are talking about ?
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funchords @ 2nd Aug 03:14AM:
Re: Metering is a Scare Tactic

said by fiberguy :

Further, that's operating a server - no matter what anyone says.
A peer-to-peer application is a node. It is neither client nor server. It's definitive.

Think about what Comcast itself has said. They have repeated indicated that P2P is permitted on their network. And these aren't flunkies -- it's Joe Waz and David Cohen!
said by fiberguy :

That's NOT typical residential use.
Typical residential use is defined by typical residents, no? Who do you think are running these programs, Real Estate offices?
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karlmarx @ 2nd Aug 07:26AM:
Re: Metering is a Scare Tactic

Blah Blah Blah. A T-1 PORT charge is about $140.00 a month. That's 1.5/1.5 GUARANTEED SPEED. So having a 1/256K connection, all things being equal, would be.. hmm.. about $50.00/month. YOU do the math.
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RJ44 @ 2nd Aug 08:48AM:
Re: Metering is a Scare Tactic

said by karlmarx :

Blah Blah Blah. A T-1 PORT charge is about $140.00 a month. That's 1.5/1.5 GUARANTEED SPEED. So having a 1/256K connection, all things being equal, would be.. hmm.. about $50.00/month. YOU do the math.
LOL. I bow to your superior logic. :uhh:
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fiberguy @ 2nd Aug 12:50PM:
Re: Metering is a Scare Tactic

Peer to peer applications, sorry to say, ARE servers. Calling them a node is like calling a traffic camera a cop. The function of the sending portion of the P2P app is a server; sorry, I don't buy the "node" definition as it's being used to play twister in this game being played.

Comcast can't play twister on both sides of the table, too, in order to save it's own ass. They can play the "we're not throttling traffic" game and then turn around and say "we like P2P" on the other side in order to turn the tables on the "you guys are doing to this because the XXAA is telling you to" group's opinion.

If comcast really wanted P2P on it's network, the name Sandvine would NEVER have been uttered - ever - on BBR. I am more to believe that P2P being permitted, or lets say, "welcomed" on their network was more P.R. play.

As for typical residential use. It's not typical for a residential user to operate servers on their connection. It's not typical for someone to use their connection wide open 24/7 for any reason. Even if someone is using their connection to work at home and they are on the higher/highest side of the use group, then they are also not "typical residential" users. When it comes to using your residential line for working at home, I'd also have to say that its a fine line. The AUP says "not for commercial use".. running a business from home or working from home is a violation of that policy. They have teleworker and business accounts for that.

So, while the definition of what is something typical of residential use is evolving, some things aren't going to change anytime in the future.

One thing is for certain, and many have agreed with me here on this, but BBR users are far from typical users. Not only have others agreed,.. others have stated it on their own to which I've also agreed, obviously. ;)
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anon @ 3rd Aug 03:42AM:
Re: aGREED!

said by badtrip :

If any industry needs regulation, it is the cable ISP industry. These guys are running monopolies in what is quickly becoming a necessary utility. $70 per month for 16/1 service with caps and overage charges is too high a price IMO. I don't have a problem with cable ISPs going to usage based payment like electricity/gas/water. I also don't care if they do a flat rate like local telephone service. I do care, however when they do both.
Cable internet is not a monopoly. Its a duopoly with telco.
Cable and broadband are not, in any way, "a necessary utility."
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funchords @ 3rd Aug 05:16PM:
Re: Metering is a Scare Tactic

said by fiberguy :

Peer to peer applications, sorry to say, ARE servers.
Let's speak factually, shall we? I have offered expert sources about this. I am speaking correctly.

You may still call it wordplay, but doing so doesn't change the facts.

But even more important than that argument is whether or not using P2P applications is authorized on Comcast's network. It is both a matter of Internet policy, United States policy, and spoken and submitted testimony from Comcast's highest executives that using these applications are allowed, including uploading.

So even if you read the same TOS that I read, and by your interpretation you read it differently than I do, how can you maintain that using P2P applications is not allowed in the light of the above paragraph?
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qworster @ 4th Aug 01:54AM:
Markups....and GREED!

Comcast buys bandwidth wholesale for between 4 and 8 cents per gigabyte-and now they want to institute metered bandwidth and retail it to us for between a dollar and $1.50 per Gb. That's a markup of between ONE THOUSAND AND TWO THOUSAND PERCENT!

Personally, I think that markup is a bit too extreme, don't you?

How many OTHER products do you know that are marked up that much?

NONE?

I thought so!
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bitsurfer @ 5th Aug 08:13PM:
Re: Markups....and GREED!

Text messages are marked up 7314% (»consumerist.com/consumer/cellpho···7518.php)
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