5 ms·

Why can't people apply non-internet concepts to the internet/ISPs? Do utilities give you unlimited electricity, gas, and water? Of course not. Does everyone

by walkon 15y ago

Why can't people apply non-internet concepts to the internet/ISPs? Do utilities give you unlimited electricity, gas, and water? Of course not. Does everyone who goes to McDonald's pay a flat fee of $5 and get as much as they want? Resources are scarce and the people who voluntarily provide them shouldn't be required by law to provide it infinitely without charging more or capping usage.

orblivion 15y ago
People seem to assume that it's out of "greed" that they're doing this. Just look at how much the executives are making, and all that. They don't seem to buy scarcity as a legitimate argument.
- Klinky 15y ago
  Artificial scarcity is not real scarcity. When you have the ISPs taking federal money and blowing it on themselves, merging with each other to lower competition levels, buying up media assets & suing communities who try to do things on their own terms, you start to see how underhanded a lot of the telecoms practices are.
Dove 15y ago
No one is saying caps, in principle, ought to be illegal, the argument you seem to be attacking. The article is arguing that the caps are out of sync with the actual scarcity of the resource. Prices are rising and caps are dropping, even though bandwidth is becoming cheaper and more available. That suggests the caps aren't being used to make people pay for resources they use, but rather to trick people into spending money they didn't realize they'd be on the hook for. That's sneaky and skeezy. It's like the banks that charge a $50 overdraft fee on each of six trivial transactions. No one is saying there shouldn't be a fee, but if it's turning into a significant profit stream, something's not right.
- walkon 15y ago
  My point is also to counter the outrage over usage-based pricing. What is so unfair about the idea of ISPs charging per/KB similar to how an electric utility charges per/KWh? Prices are rising for services and commodities in almost every industry. For instance, cotton has hit record highs this year, food is more expensive, gas is higher, etc. We're in an inflationary economy right now, so I don't think ISPs should be singled out for raising prices as their costs increase (e.g. they have to pay rising utility costs, salaries/benefits/health coverage, property taxes, etc). Perhaps what should be examined is change in net profit margins for ISPs that cap usage, but even if that rises, it is hard to know with certainty if the "sneaky and skeezy" "tricks" were the factor. One could argue if their tactics are indeed so "sneaky and skeezy" that they would loose business in the long run and negatively impact their profit margin.
  - benmccann 15y ago
    I'm not sure utilities are a good comparison point for two reasons. The first is that the marginal cost of internet data is near zero while the marginal cost of electricity generation is not. Secondly, utilities generally are more highly regulated than ISPs. The reason it can be distasteful when an ISP raises its rates or limits its services is that ISPs often have a monopoly over many of their customers. At best most people get to choose from a duopoly, so the ISPs don't really have to compete in a free market.
    - walkon 15y ago
      The marginal costs of commercial software is even lower, but most vendors charge in a mostly linear manner; it's not like they decrement their prices for each sale they make to keep a steady cost-to-price ratio. Why should they? If enough people want to still voluntarily purchase their product/service, they should continue to try and make as much money as possible. If their are few good options, then the market is ripe for competition to help bring the incumbents back to offering better values. Isn't this a site revolving around entrepreneurs in IT? Doesn't everyone want to make more money then they spend?
      - 15y ago
falldowngoboom 15y ago
The ISPs also don't treat it as a proper utility. If I don't use it for a month, I still have to pay my full monthly rate.
- walkon 15y ago
  Yeah it goes both ways. The users who barely use their internet connection, such as grandmas that check their email and look up a recipe a few times a week, are subsidizing the users who are streaming Netflix in high def for 3 hours a night.
  - runningdogx 15y ago
    I'll pick on at&t uverse since that's what I've got, and since they're the latest to join the transfer cap party. Those grandmas are not paying $65/mo for the top service tier. They are paying $35/mo for 3Mbit/s lowest-tier uverse service, and they still get a transfer cap of 250GB. Streaming netflix users, who are pretty much all going to be in the top tier or two of service (24Mbit/s or 18Mbit/s) get pinched by the same cap. 250GB is 3.2% utilization of an 24Mbit/s download link, over a month, btw. Even in some alternate universe where caps make sense, the least AT&T could do is grade the caps by line speed. It seems to me like I'm subsidizing grannie's transfer allowance, even if she doesn't fully use it. Since the primary issue is traffic congestion at peak usage times, the obvious solution is to rate limit heavy users, rather than punishing them with hard caps which indiscriminately targets users who transfer lots of data in off hours. Given all that, why does AT&T cap all uverse tiers the same? The first explanation that comes to mind is that they know if they drop the caps too much for lower tiers, because despite what they claim 250GB really isn't that much, they'll start cutting into too many grannies' modest internet usage. They want to keep their low-end customers from being hurt by lower caps, but they want to gouge their higher-end customers for going over the same caps. And why do they cap instead of rate limiting heavy users? Rate limiting doesn't make them money. Caps might (though they will lose some customers over this outrage, and others will cut back usage or service tiers, so AT&T might even lose money overall).

by walkon 15y ago

orblivion 15y ago

People seem to assume that it's out of "greed" that they're doing this. Just look at how much the executives are making, and all that. They don't seem to buy scarcity as a legitimate argument.

Klinky 15y ago
Artificial scarcity is not real scarcity. When you have the ISPs taking federal money and blowing it on themselves, merging with each other to lower competition levels, buying up media assets & suing communities who try to do things on their own terms, you start to see how underhanded a lot of the telecoms practices are.

Dove 15y ago

No one is saying caps, in principle, ought to be illegal, the argument you seem to be attacking. The article is arguing that the caps are out of sync with the actual scarcity of the resource. Prices are rising and caps are dropping, even though bandwidth is becoming cheaper and more available. That suggests the caps aren't being used to make people pay for resources they use, but rather to trick people into spending money they didn't realize they'd be on the hook for. That's sneaky and skeezy. It's like the banks that charge a $50 overdraft fee on each of six trivial transactions. No one is saying there shouldn't be a fee, but if it's turning into a significant profit stream, something's not right.

walkon 15y ago
My point is also to counter the outrage over usage-based pricing. What is so unfair about the idea of ISPs charging per/KB similar to how an electric utility charges per/KWh? Prices are rising for services and commodities in almost every industry. For instance, cotton has hit record highs this year, food is more expensive, gas is higher, etc. We're in an inflationary economy right now, so I don't think ISPs should be singled out for raising prices as their costs increase (e.g. they have to pay rising utility costs, salaries/benefits/health coverage, property taxes, etc). Perhaps what should be examined is change in net profit margins for ISPs that cap usage, but even if that rises, it is hard to know with certainty if the "sneaky and skeezy" "tricks" were the factor. One could argue if their tactics are indeed so "sneaky and skeezy" that they would loose business in the long run and negatively impact their profit margin.
- benmccann 15y ago
  I'm not sure utilities are a good comparison point for two reasons. The first is that the marginal cost of internet data is near zero while the marginal cost of electricity generation is not. Secondly, utilities generally are more highly regulated than ISPs. The reason it can be distasteful when an ISP raises its rates or limits its services is that ISPs often have a monopoly over many of their customers. At best most people get to choose from a duopoly, so the ISPs don't really have to compete in a free market.
  - walkon 15y ago
    The marginal costs of commercial software is even lower, but most vendors charge in a mostly linear manner; it's not like they decrement their prices for each sale they make to keep a steady cost-to-price ratio. Why should they? If enough people want to still voluntarily purchase their product/service, they should continue to try and make as much money as possible. If their are few good options, then the market is ripe for competition to help bring the incumbents back to offering better values. Isn't this a site revolving around entrepreneurs in IT? Doesn't everyone want to make more money then they spend?
    - 15y ago

falldowngoboom 15y ago

The ISPs also don't treat it as a proper utility. If I don't use it for a month, I still have to pay my full monthly rate.

walkon 15y ago
Yeah it goes both ways. The users who barely use their internet connection, such as grandmas that check their email and look up a recipe a few times a week, are subsidizing the users who are streaming Netflix in high def for 3 hours a night.
- runningdogx 15y ago
  I'll pick on at&t uverse since that's what I've got, and since they're the latest to join the transfer cap party. Those grandmas are not paying $65/mo for the top service tier. They are paying $35/mo for 3Mbit/s lowest-tier uverse service, and they still get a transfer cap of 250GB. Streaming netflix users, who are pretty much all going to be in the top tier or two of service (24Mbit/s or 18Mbit/s) get pinched by the same cap. 250GB is 3.2% utilization of an 24Mbit/s download link, over a month, btw. Even in some alternate universe where caps make sense, the least AT&T could do is grade the caps by line speed. It seems to me like I'm subsidizing grannie's transfer allowance, even if she doesn't fully use it. Since the primary issue is traffic congestion at peak usage times, the obvious solution is to rate limit heavy users, rather than punishing them with hard caps which indiscriminately targets users who transfer lots of data in off hours. Given all that, why does AT&T cap all uverse tiers the same? The first explanation that comes to mind is that they know if they drop the caps too much for lower tiers, because despite what they claim 250GB really isn't that much, they'll start cutting into too many grannies' modest internet usage. They want to keep their low-end customers from being hurt by lower caps, but they want to gouge their higher-end customers for going over the same caps. And why do they cap instead of rate limiting heavy users? Rate limiting doesn't make them money. Caps might (though they will lose some customers over this outrage, and others will cut back usage or service tiers, so AT&T might even lose money overall).