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(The Consumerist)   Cable industry admits that data caps have nothing to do with network congestion   (consumerist.com) divider line 78
    More: Obvious, cable industry, bandwidth cap, fixed costs, flat rate, Weather Channel%  
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5455 clicks; posted to Business » on 20 Jan 2013 at 3:15 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-01-21 12:30:38 PM  

Karac: Personally, I'd like to see municipalities get into the ISP business. Stick wireless broadcasters on the pre-existing power company poles. Advertise it as 'hey, it might not be as fast as the cable company, but it's only $5 a month and we're never going to bother with throttling, data limits, or disabling torrents'.


It's been tried all over the place. Municipalities don't have the funding for this. Oakland County, Michigan is one example that tried to implement this and failed due to lack of money. They never got past the pilot project: Link
 
2013-01-21 01:06:34 PM  

Austinoftx: I think that's pretty much right, except that you forgot about all that dark fiber the monopoly telco/ISPs have. They certainly wouldn't have a shortage if they lit one of these up now and then. At present, they're probably already operating with late-generation equipment, but over-centralizing it in order to produce bottlenecks, as well as other things to mismanage the backbone so that it looks like they are overwhelmed.


Never attribute to malice what is adequately explained by incompetence.

That said, the solution is still the same. Gov't infrastructure with real competition for delivery.
 
2013-01-21 02:16:16 PM  

tbhouston: Linux_Yes: dark fiber

Wallmart has all tthose tvs laying around walmart, but if i want one they make ME pay for it... thanks obama

It is not fair wallmart has all the tv's just sitting there, unused... i want one!


The costs of that Wal-Mart are subsidized by the government (low labor costs, corporate tax breaks)...at least some of the reduction in price is passed onto the customer.

The costs of the network are subsidized by the government and the companies have a monopoly...the consumer price is high and always increasing.
 
2013-01-21 02:30:23 PM  

gimmegimme: tbhouston: Linux_Yes: dark fiber

Wallmart has all tthose tvs laying around walmart, but if i want one they make ME pay for it... thanks obama

It is not fair wallmart has all the tv's just sitting there, unused... i want one!

The costs of that Wal-Mart are subsidized by the government (low labor costs, corporate tax breaks)...at least some of the reduction in price is passed onto the customer.

The costs of the network are subsidized by the government and the companies have a monopoly...the consumer price is high and always increasing.



I wasn't talk about cost, but availability. just because there is dark fibre laying around unused, doesn't mean it has no value and should be given away for free.
 
2013-01-21 02:42:29 PM  

moothemagiccow: Austinoftx: The arguement about pressuring web app designers is a new one to me. However, it's invalid. Web app designers don't need to care how much bandwidth their apps generate.

Maybe irresponsible dickheaded programmers who work for Paypal. Any decent dev does their best to optimize speed without sacrificing performance. It's a biatch to handle, but if they don't think about it, they probably suck at their job (which is common).


I've got to disagree. In a perfect world - sure. In the real world, in 90% of the cases, it doesn't matter.
 
2013-01-21 02:43:41 PM  

China White Tea: Karac: Personally, I'd like to see municipalities get into the ISP business.

Of course, when municipalities get into the ISP business, the cable companies start bribing politicians until they legislate away their ability to do that. So, there's that.


Or when they do have the funding, they can't keep up with their competitors and end up going deep into the red, like my municipality did.

Link
 
2013-01-21 02:52:22 PM  

tbhouston: bandwith is free guys!!

all the data centers, and techs in the fields and equiptment all is free.. cisco is a non proft company who donates their engieneers and gear to help america, electric companys provide free electricy for the hvac, people donate their time because they love working for such a great company

yah bandwith is completely free!


Yeah, it is, actually. Bandwidth is like the *meaning* of the words you say during a telephone conversation. The telephone company shouldn't bill you differently depending on the language you use, who you talk to or how fast you talk. They need only maintain the infrastructure that makes a call possible. Your phone conversation does not cause a surge of operating expenses for the phone company. And if the phone company's capacity is so limited that they want you to keep your calls short so that other people can make calls, then the phone company simply needs to expand it's capacity.

The above analogy isn't perfect, but it covers most of the distance. The cost of the "electrical impulses" is negligible. The licenses and exchange tolls are far higher than the actual cost of maintaining the infrastructure, but would still be negligible if spread out over all of the customers. Some people call this "subsidizing heavy users" but that's bullshiat if you understand how the industry calculates it's entitlements.

Say it cost $1,000,000/day to maintain a phone system and pay various tolls to municipalities your calls are routed through. Say you have 10,000,000 customers. So you *could* charge everyone $.10/day. But you are required to raise $500,000 in revenues per day to cover the cost of the executive board's executive pay. So you charge every customer $.15/day. That doesn't sound like much, does it?

In the case of providing Internet service, the outlook is more like this: Say you have 10,000,000 customers, who you charge $40/mo for their Internet service. Given that your profit margin is 90-95%, this means that *including entitlements* like executive pay, and arbitrary bandwidth access fees, it only costs you $2-4/mo to provide the service to each customer. And still you send your suits to the media to cry in front of cameras about how limited and expensive bandwidth is so you can regularly jack the price up even more.

I don't begrudge a company it's profits, but this... This is going too far. Whether they're legally operating as a regulated monopoly in your area or not, they operate like unregulated monopolies. And unregulated monopolies must either become properly regulated, or they must face fair competition.
 
2013-01-21 04:01:14 PM  

Austinoftx: tbhouston: bandwith is free guys!!

all the data centers, and techs in the fields and equiptment all is free.. cisco is a non proft company who donates their engieneers and gear to help america, electric companys provide free electricy for the hvac, people donate their time because they love working for such a great company

yah bandwith is completely free!

Yeah, it is, actually. Bandwidth is like the *meaning* of the words you say during a telephone conversation. The telephone company shouldn't bill you differently depending on the language you use, who you talk to or how fast you talk. They need only maintain the infrastructure that makes a call possible. Your phone conversation does not cause a surge of operating expenses for the phone company. And if the phone company's capacity is so limited that they want you to keep your calls short so that other people can make calls, then the phone company simply needs to expand it's capacity.

The above analogy isn't perfect, but it covers most of the distance. The cost of the "electrical impulses" is negligible. The licenses and exchange tolls are far higher than the actual cost of maintaining the infrastructure, but would still be negligible if spread out over all of the customers. Some people call this "subsidizing heavy users" but that's bullshiat if you understand how the industry calculates it's entitlements.

Say it cost $1,000,000/day to maintain a phone system and pay various tolls to municipalities your calls are routed through. Say you have 10,000,000 customers. So you *could* charge everyone $.10/day. But you are required to raise $500,000 in revenues per day to cover the cost of the executive board's executive pay. So you charge every customer $.15/day. That doesn't sound like much, does it?

In the case of providing Internet service, the outlook is more like this: Say you have 10,000,000 customers, who you charge $40/mo for their Internet service. Given that your profit margin is 90-95%, this means that *inc ...


don't quit your day job.
 
2013-01-21 04:09:14 PM  

tbhouston: don't quit your day job.


And don't you ever stop dreamin' you adorable sock puppet, you!
 
2013-01-21 04:22:40 PM  

fortheloveofgod: Karac: Personally, I'd like to see municipalities get into the ISP business. Stick wireless broadcasters on the pre-existing power company poles. Advertise it as 'hey, it might not be as fast as the cable company, but it's only $5 a month and we're never going to bother with throttling, data limits, or disabling torrents'.

It's been tried all over the place. Municipalities don't have the funding for this. Oakland County, Michigan is one example that tried to implement this and failed due to lack of money. They never got past the pilot project: Link


Damn, don't you read fark? UNC Samurai never shuts up about Greenlight in his hometown, Wilson NC.
 
2013-01-21 05:15:40 PM  

moothemagiccow: Austinoftx: The arguement about pressuring web app designers is a new one to me. However, it's invalid. Web app designers don't need to care how much bandwidth their apps generate.

Maybe irresponsible dickheaded programmers who work for Paypal. Any decent dev does their best to optimize speed without sacrificing performance. It's a biatch to handle, but if they don't think about it, they probably suck at their job (which is common).


But there are so many irresponsible dickheaded programmers - who are also probably helped along by unrealistic requirements from management that doesn't understand such things.
 
2013-01-21 05:29:58 PM  

Tommy Moo: "Instead, what we most often see are low caps and high overages layered on top of already high existing flat rate pricing, raising rates for all users. Does raising rates on a product that already sees 90% profit margins sound like 'fairness' to you?"

So, isn't this where the free market steps in with its invisible hand to lower prices? If margins are so high, why don't investors jump into the market with new start-ups that undercut Time Warner until the price reaches a fair level that allows everyone involved to just make what they are worth?


Because there is no free market where municipal monopolies are in place.
 
2013-01-21 11:23:32 PM  

Tommy Moo: T-Servo: Tommy Moo: "Instead, what we most often see are low caps and high overages layered on top of already high existing flat rate pricing, raising rates for all users. Does raising rates on a product that already sees 90% profit margins sound like 'fairness' to you?"

So, isn't this where the free market steps in with its invisible hand to lower prices? If margins are so high, why don't investors jump into the market with new start-ups that undercut Time Warner until the price reaches a fair level that allows everyone involved to just make what they are worth?

Ha, you think cable companies work in a free market?

Explain. Let's start one. You and me. What is physically preventing us from starting an ISP? Granted it has a high barrier to startup. It would probably take hundreds of millions in venture capital funds, but some team of VC investors will pony up any amount if it is guaranteed to return 15%/year for the first ten years.


I ran an ISP that was a 2.4ghz based WAN that served about a hundred businesses and was pretty well breaking even, but it just want profitable enough to survive a change in ownership. If you start small and build carefully it can be done. I've thought about starting an internet coop before. You just need density and backhaul.
 
2013-01-22 12:20:17 AM  
I don't know about other companies, but prior to suspending their 250G a month limit, Comcast didn't charge people who went over that limit. Customers who went over would get a warning the first time and if it happened again within 6 months, they'd get a one year suspension of internet service. During which, I assume, said customer didn't have an internet bill because there'd be a huge outcry if Comcast tried to charge customers for a service that they were suspended from using. In other words, enforcing the cap would cost Comcast money. So if Comcast didn't have a cap to increase profit, what did they have it for?
 
2013-01-22 12:30:10 AM  

davidphogan: I ran an ISP that was a 2.4ghz based WAN that served about a hundred businesses and was pretty well breaking even, but it just want profitable enough to survive a change in ownership. If you start small and build carefully it can be done. I've thought about starting an internet coop before. You just need density and backhaul.


What would you say was the biggest expense in running your own ISP? My bet is that it was paying for bandwidth at the cartel's rates? It was the biggest expense at 3 local ISPs I worked for, all of whom were operating on razor-thin margins.
 
2013-01-22 01:28:43 AM  

Austinoftx: What would you say was the biggest expense in running your own ISP? My bet is that it was paying for bandwidth at the cartel's rates? It was the biggest expense at 3 local ISPs I worked for, all of whom were operating on razor-thin margins.


This was 2002-2003, but the bandwidth definitely was since almost all the other costs were going to be incurred no matter what. We justified it as it paid for our internet usage (which was pretty high in the first place), and by being creative. We had friends at SBC and Quest, so we were able to get several DSL lines that we were allowed to resell at 6/1.5, and route those in conjunction with some cheap T-1 lines we were able to get as we also sold those. Neither of these were our primary business, but they made our primary business cheaper as we needed a lot of DSL lines, dial up accounts with phone lines, as well as a few customers who had purchased T-1s from us.

As a standalone business it probably wouldn't make business sense to try starting one now, but you might be able to do a coop deal where you light up dense neighborhoods (business parks or condos/apartments would be ideal) as an outside consultant.

It helped that we already had a core business that happened to coincide with reselling internet access to businesses. The core business was placing computers into public spaces in hotels, coffee shops, copy stores,etc. We pretty much had a "you're responsible for the internet" clause, which makes me think the better idea would be a coop route. In short, the best way to compete with the big guys now would be to get a bunch of people (a condo, apartment, office building, etc) to agree that as part of their lease/HOA/rental agreement they pay x share of the internet bill, which is brought into a central location and served throughout the neighborhood.

Another option would be a WiFi setup using directional antennas to backhaul the signal between different houses, and get everyone to sign a deal to chip in for a commercial line to the block ISP. A few dedicated lines bundled and shared among 30 neighbors might work out well for everyone and get a bulk deal from the ISP's.
 
2013-01-22 02:30:03 AM  

Zarquon's Flat Tire: slayer199: 5GB a month?  I'd go through that in a couple days...easily.

No shiat, I might pull that down on my phone.


Sometimes, I'll pull that much down on my PC in just a few hours.
 
2013-01-22 11:46:32 AM  

JerkyMeat: And nothing good will happen & there will be no positive change, because this is America. Shiat only gets worse.


So you want to go back in time to when access to Internet was so much faster, like 1996? Since, as you say, things have gotten so much worse since then.
 
2013-01-22 02:12:11 PM  

King Something: You're not the only one recoiling in surprise. Look at this panel of judges who are just as shocked as you or I on this breaking news story:

[i344.photobucket.com image 700x950]


maybe you should have a seat over there.


SuperT: I'd vote for nationalizing the home internet connectivity business


that's never going to happen. there are alot more services that the government subsidies but hasn't taken over even though it's being ran like crap, like electric companies (lipa for instance). then there's the thought of government having direct access to every subscriber's browsing habits.
 
2013-01-23 06:52:23 AM  

Austinoftx: tbhouston: bandwith is free guys!!

all the data centers, and techs in the fields and equiptment all is free.. cisco is a non proft company who donates their engieneers and gear to help america, electric companys provide free electricy for the hvac, people donate their time because they love working for such a great company

yah bandwith is completely free!

Yeah, it is, actually. Bandwidth is like the *meaning* of the words you say during a telephone conversation. The telephone company shouldn't bill you differently depending on the language you use, who you talk to or how fast you talk. They need only maintain the infrastructure that makes a call possible. Your phone conversation does not cause a surge of operating expenses for the phone company. And if the phone company's capacity is so limited that they want you to keep your calls short so that other people can make calls, then the phone company simply needs to expand it's capacity.

The above analogy isn't perfect, but it covers most of the distance. The cost of the "electrical impulses" is negligible. The licenses and exchange tolls are far higher than the actual cost of maintaining the infrastructure, but would still be negligible if spread out over all of the customers. Some people call this "subsidizing heavy users" but that's bullshiat if you understand how the industry calculates it's entitlements.

Say it cost $1,000,000/day to maintain a phone system and pay various tolls to municipalities your calls are routed through. Say you have 10,000,000 customers. So you *could* charge everyone $.10/day. But you are required to raise $500,000 in revenues per day to cover the cost of the executive board's executive pay. So you charge every customer $.15/day. That doesn't sound like much, does it?

In the case of providing Internet service, the outlook is more like this: Say you have 10,000,000 customers, who you charge $40/mo for their Internet service. Given that your profit margin is 90-95%, this means that *inc ...


Why aren't we still using dialup?
 
2013-01-23 03:56:41 PM  
Dokushin:

Maybe because the telcos built DSL just so people wouldn't tie up the more expensive voice circuits? :D
 
2013-01-23 05:05:42 PM  

Austinoftx: Dokushin:

Maybe because the telcos built DSL just so people wouldn't tie up the more expensive voice circuits? :D


Why is DSL faster than dial-up?
 
2013-01-23 08:03:42 PM  

Dokushin: Austinoftx: Dokushin:

Maybe because the telcos built DSL just so people wouldn't tie up the more expensive voice circuits? :D

Why is DSL faster than dial-up?


My DSL wasn't. You need to take your questions to Google.
 
2013-01-23 08:32:51 PM  

Austinoftx: Dokushin: Austinoftx: Dokushin:

Maybe because the telcos built DSL just so people wouldn't tie up the more expensive voice circuits? :D

Why is DSL faster than dial-up?

My DSL wasn't. You need to take your questions to Google.


Your DSL was slower than 56k? Do you know how DSL works? Do you know how data is moved? Do you know why Google spends billions laying new cables instead of using the ones that are there? Do you know why radio spectrum isn't free? Do you know what a router is and does? Do you know why cable is faster than DSL in many markets?

Your assertion that bandwidth is completely free because the amount of it that you use has no impact on infrastructure is ridiculous. Smokescreening like that obscures issues that need solving and contribute to the sluggish pace of accelerated bandwidth deployment in the US.
 
2013-01-23 09:27:26 PM  

Dokushin: Austinoftx: Dokushin: Austinoftx: Dokushin:

Maybe because the telcos built DSL just so people wouldn't tie up the more expensive voice circuits? :D

Why is DSL faster than dial-up?

My DSL wasn't. You need to take your questions to Google.

Your DSL was slower than 56k? Do you know how DSL works? Do you know how data is moved? Do you know why Google spends billions laying new cables instead of using the ones that are there? Do you know why radio spectrum isn't free? Do you know what a router is and does? Do you know why cable is faster than DSL in many markets?

Your assertion that bandwidth is completely free because the amount of it that you use has no impact on infrastructure is ridiculous. Smokescreening like that obscures issues that need solving and contribute to the sluggish pace of accelerated bandwidth deployment in the US.


I'd have to answer "yes" to all of those questions, y'know, being a network engineer for a major corporation and having worked for 3 dialup/dsl/isdn ISPs. This is why I'm part of this conversation. There are too many people like you under the "smokescreen", who object to my relevations of things that run counter to your "common sense". This is why we have crappy, expensive monopoly Internet service in this country.
 
2013-01-23 09:45:59 PM  

Austinoftx: I'd have to answer "yes" to all of those questions, y'know, being a network engineer for a major corporation and having worked for 3 dialup/dsl/isdn ISPs. This is why I'm part of this conversation. There are too many people like you under the "smokescreen", who object to my relevations of things that run counter to your "common sense". This is why we have crappy, expensive monopoly Internet service in this country.


Do you want to play credential bingo? I work for government labs doing research work on network communications. I work with a wide variety of fabrics, topologies, and protocols every week. Your assumption that your "being a network engineer for a major corporation" means you can tell me nonsense like "Bandwidth is like the *meaning* of the words you say during a telephone conversation" and not get called on it is just a little thin on the bottom.

Bandwidth is a physical concept; the fidelity of a communications channel is a real thing. You can't arbitrarily decide to transmit terabits a second over copper wire. There is physical scarcity, and therefore the market motives are valid, if distorted by municipal monopolies. You aren't making "revelations," you're simply giving an interpretation that is completely incorrect.

Oh, and we have "crappy, expensive monopoly Internet service" because those highly distorted markets are government protected. Fortunately, there are end-runs you can do around those laws if you have the money to lay fiber -- as Google is doing.
 
2013-01-23 11:54:55 PM  

gingerjet:
It also took Cox cable four attempts to deliver the service I asked for and two techs blamed my wireless router for poor performance even when I showed them I was directly connected into their fark'n router via a fark'n Ethernet cable. After complaining a fourth time - my service mysteriously started working again. With no explanation. As if some one discovered a configuration error and refused to admit to it. divided by zero.


/hate cox cable san diego
 
2013-01-24 12:34:57 AM  

Dokushin: Austinoftx: I'd have to answer "yes" to all of those questions, y'know, being a network engineer for a major corporation and having worked for 3 dialup/dsl/isdn ISPs. This is why I'm part of this conversation. There are too many people like you under the "smokescreen", who object to my relevations of things that run counter to your "common sense". This is why we have crappy, expensive monopoly Internet service in this country.

Do you want to play credential bingo? I work for government labs doing research work on network communications. I work with a wide variety of fabrics, topologies, and protocols every week. Your assumption that your "being a network engineer for a major corporation" means you can tell me nonsense like "Bandwidth is like the *meaning* of the words you say during a telephone conversation" and not get called on it is just a little thin on the bottom.

Bandwidth is a physical concept; the fidelity of a communications channel is a real thing. You can't arbitrarily decide to transmit terabits a second over copper wire. There is physical scarcity, and therefore the market motives are valid, if distorted by municipal monopolies. You aren't making "revelations," you're simply giving an interpretation that is completely incorrect.

Oh, and we have "crappy, expensive monopoly Internet service" because those highly distorted markets are government protected. Fortunately, there are end-runs you can do around those laws if you have the money to lay fiber -- as Google is doing.


Oh, I had a feeling you were priming for an opportunity to bombast. Thus, the dumb, leading questions, and the hypocritical complaint about spouting credentials followed by... spouting credentials. You must be a joy to work with, and I'm sure your kids hate you.

Let me patiently 'splain. What we have is a cartel that attaches an arbitrary dollar amount to the activity which their network is designed to facilitate. When this activity threatens to grow, the cartel jacks the price up instead of expanding capacity. Changes in the level of this activity does not effect the cost of maintaining the network. An idle network still requires the same amount of electricity and human supervision as one running at maximum capacity. But an idle network or spare capacity is a lost opportunity to reap profit. Data isn't a commodity or investment that needs to be paid for, It is a question of what opportunity they use or lose to profit from their network within it's absolute capacity. In the current farked-up system, their billing, and thus profits, are inappropriately tied to the variable amount of traffic any given customer generates. Thus, their profit growth is tied to limiting access to the network and raising prices to scare off usage growth. Quality and capacity are demonstrably of less concern to them than simply running the legacy network as close to capacity as possible forever.

Now, if the price they demand for access to their network is only reasonably higher than the real cost of running the network, there would be little grounds for complaint. I would still expect them to expand their network regularly. However, they're charging customers at least 10x their costs, and still raising rates, and refusing to expand capacity. The scarcity is deliberate because they're allowed to tie their prices to an arbitrary metric of this scarcity, and not to their costs. It's an embargo to jack prices up. And they're pocketing the money, just like they pocketed the government money they took to build the precious network, when keeping up with customer demand requires so little of this money. Thus, I reject these revealed actual market motives, seek to expose them for the craven manipulations that they are, and pressure our leadership to either bust up their monopoly or regulate them properly. And that's fair, because a regulated monopoly is required to provide enough capacity to meet demand, and is required to bill at a reasonable rate. We've been letting these particular monopolies bill as they wish, and restrict capacity to increase their profits.

Because there are still so many people like you, who think flowing bandwidth is like printing money, the "consumption" model continues to get a pass. This is why there is a shortage of momentum to demand a billing model which makes sense (a set service period at a guaranteed capacity). Fools like you continue to pooh-pooh anything that bucks your common sense, and the telcos and cable companies smile like sharks. Keep fighting for the inappropriate consumption based billing model, and you'll always have slow, expensive unreliable Internet service. Press for a capacity and quality based billing model, and you'll have telcos making faster and better service possible, because that is the metric their billing will be tied to. There would be endless incentive for them to seek higher profits by expanding the network, and encouraging use, instead of choking it off and extorting ever-higher fees for access.

But, whatever you want to believe, man. The truth is obviously outside your comfort zone.
 
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