Former FCC chair: ISP data caps are about monetization, not network congestion

By Rick
Jan 21, 2013
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  1. Data caps, also known as broadband caps and bandwidth caps, have long been a controversial method of managing network congestion by ISPs -- or has it? While numerous ISPs have explained away the necessity of bandwidth caps to maintain quality...

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  2. What about wages, help centers, leases, equipment upgrades, insurance, lawyers, adverting, future upgrades, billing etc etc... so some of you can see clearly, lets just use the EASIEST way to comprehend the prices. Lets pretend they do only charge an average user say $10 a month. So forecast gross income for a year being 12 months X $10 = $120 for the year. In just 1 simple on site service call, the cost of that service call will use up the ENTIRE years GROSS profit. So they would be operating at a loss for the rest of the entire year.

    Internet is pretty cheap here folks (in US and Canada) so not sure why some people cry about it so much. Some people just don't know how good we have it.
  3. Tygerstrike

    Tygerstrike TechSpot Enthusiast Posts: 827   +93

    The problem is that everyone wants unlimited data. They dont want to have to pay for a tiered plan, or even a cap. They want unlimited period. It has only been within the past few years that ppl are begining to realize how bad they are getting boned on data charges. The whole system needs to be overhauled. If they ever make internet a actual utility, then we will see something like a fair market price. Untill then we get to continue to be beaten up by ISP on data.
  4. Don't worry. Google will be the biggest ISP in 10 years or so.
    zaid zaid likes this.
  5. Win7Dev

    Win7Dev TechSpot Booster Posts: 351   +38

    The US ranks 28th in the world for internet speed, which is why we have reason to complain. We pay quite a bit and our ISP's don't update their networks to provide us with better service when they raise prices. We realistically should have 100mbps connections for around $50 a month or so because of how developed our country already is, but ISP's aren't investing their profits.
    BlueDrake and Littleczr like this.
  6. p51d007

    p51d007 TechSpot Booster Posts: 303   +40

    In a pure economic model, I do like that statement. If it doesn't "cost" anything, people will waste & use more, which is why you see places that adopt "free" healthcare, burdened with a high cost, and long lines. "hey, it's free, why not" is why. When you introduce caps, if you use more, you pay more, which helps keep the usage from getting out of hand.


    "If you have an unlimited pricing model, you can basically say: 'I can build an app or a service and I don't really concern myself with how much bandwidth consumption it will take...There is no disciplining element."
  7. Corporate greed with government collusion is killing the USA. Our internet is an embarrassment for such a technically advanced country. Shameful.
  8. Adhmuz

    Adhmuz TechSpot Paladin Posts: 898   +98

    Yes we know we pay too much for the connection we have, you don't need some former FCC chairman telling you this. Here in Quebec for $67 you get a 30Mbps line which is generally full speed all the time, sadly theirs a cap, of just 130GB a month for both downstream and upstream combined. For 5$ you can get an additional 20GB or 12.50$ for 60GB, If you don't buy a package and go over, heres where they really get you, it cost 1.50$ per GB over and they don't warn you if you go over unless you ask them to. Now comes the fun part at 30Mbps I can download 225MB a minute, 13.5GB an hour or 324GB a day, way more than double my limit. Keep in mind theres no cap on how much you can go over (Although there use to be until I started to abuse it because it was a maximum of 20$ over a month) In a month I could potentially download 9.27TB of which 9.13TB would be over my limit costing 14,038$ Now I would never do that and honestly don't know how to even start to download that much, but still it would be the most insane Internet bill ever? Can anyone beat that in terms of overage, that is, theoretical overage. Also forgot to add, thats not including tax which is roughly 15% so add another 2,000$.
  9. veLa

    veLa TechSpot Booster Posts: 500   +76

    I'll never pay a company that has datacaps.
  10. I think Data Caps are a scam, here in spain there has never been that and there is no problem.
    €20 for 20Mb. unlimited connection.
     
  11. Per Hansson

    Per Hansson TS Server Guru Posts: 1,930   +123 Staff Member

  12. I am in a county in Missouri which has a phone company that serves most of the rural community as well as all the towns with bundled TV, internet and phone service, this service is totaly unlimited, costs me $120 a month for everything but the movie channels and never has any congestion at all. I happen to know there are alot of people on thise service that do all their movie watching online because the online services are cheaper than the ISP's PPV price and still no congestion. Now I myself watch an old tv episode on Hulu once or twice a week but other than that it is just general web surfing for the most part. Do I care if someone else watches movies 8 hours a day....No, why... Because I know the company running the service knows how to maintain good service across the board for all of it's subscribers.

    I know the family running this company and I can tell you they don't ever go hungry, LOL. It is possible to maintain an unlimited quality service and make a fortune doing it. I will always stand by the fact that broadband caps are simply "I made this much on unlimited service, just think of how much more I could make if I jacked up prices, added caps and charged overages".

    Do I think usage based billing is fair? Well if managed correctly then it could be, but like it was mentioned above, it would have to be a metered style billing where the low end users get rewarded as much as the high end users get punished. I don't really think this can ever happen though simply due to greed. If billing ever go's to a per GB metered pricing model then I believe the costs per GB will be so inflated as to become rediculous simply because isp's can. This is the sole reason I fight for unlimited service. I don't need unlimited service but I am not willing to cater stupid amounts of money to greedy isp's for a capped connection either. I did this for ten years with HN and don't intend to do it again.
  13. If the Telecom CEO's were not so punch drunk in profits, you'd think they would know how to expand their networks. Dump all their profits for a few years into it, then BOOM.

    Instead they play dumb and want us to pay for their new network... why are we paying such high prices if these CEOs are not building out their congested networks..? They are just racking on the cash and do nothing with it...
  14. cmbjive

    cmbjive TechSpot Enthusiast Posts: 490   +82

    Is it about monetization of costs? You bet it is. Just today AT&T bought Alltel for $700 million to handle increased data loads on its network. Sorry, folks, but providing internet services on your phones and on your home PCs is not free.

    So to the last "guest" here, all of the telcos are investing in their networks. Last time when AT&T tried to invest in its network and buy T-Mobile people bitched that this move would somehow lessen competition despite the fact that there were still three majors as well as several smaller CLECs who can still provide wireless service.
  15. cmbjive

    cmbjive TechSpot Enthusiast Posts: 490   +82

    The difference between us and the 27 before us is that they don't generally have to deal with regulators at the local, state and federal levels. Generally the "others" only have to deal with one or two regulators. Many of the telcos here have to deal with as many as ten and that's not including the federal government.
  16. havok585

    havok585 TechSpot Enthusiast Posts: 105   +18

    LMAO, 50$? =)) And u call USA a developed country, in my country all contracts are between 10 to 20 $ monthly fee on fiber optics with speeds of over 100mbps down and 100mbps up (now in the big cities we have speeds of over 400Mbps, equivalent of over 30 MB/s download and upload over 20 MB/s ! CHEERS :)
  17. havok585

    havok585 TechSpot Enthusiast Posts: 105   +18

    Forgot to add, data caps? those perished since 2000!
  18. To "Guest" I realize it cost money to upgrade their network, but why do they have to BUY another's..? Why not beat everyone and lay your own and live the next 20 years like a king?

    Or, is that too much real work for a CEO and not easy to get punch drunk of stocks... which do nothing for the wellfare of the company, itself.
  19. cmbjive

    cmbjive TechSpot Enthusiast Posts: 490   +82

    You do know that a company's primary source of capital is selling stocks, right?
  20. I am 24 and was born into the tech world. I download, stream, VPN, play online games. I do it all and it's quite a bit of bandwidth. Well..I DID it all. I recently moved to the southern United States transferring Universities and live off campus. Down here we have ATT and Cable One. Both are 100% absolute garbage. ATT has a 250GB cap and high prices. Cable One has a 50GB cap and lower prices but charges ridiculous if you go over. I guess it would be a duopoly. Because of this ridiculousness and all the complaints I've heard from both providers, I'm done. I chose neither and do all my research at the library and only have my phone to connect to the outside world. No more gaming, downloading, skyping, etc etc. I only use my phone to contact the outside world. It sucks, but I refuse to give these tyrants what they demand. I am skeptical of Google as well, but I can't wait for them to become an ISP.


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