24 ms·

ISPs "exaggerate the cost of data"

110 points by pwg 15y ago

masklinn 15y ago
> Even for ISPs running their own network, such as BT, Davies claims the figures of €0.01-0.03 per GB are "rubbish". "It's an order of magnitude greater than that," he claimed. Right. So let's start seeing those prices get in the 0.10~0.30€/GB now shall we?
- ColinDabritz 15y ago
  I'm sure you're right that prices are pretty low overall, vs the high rates of overage fees, but I wanted to point out that the same people who can't tell bits from bits per second and dollars from cents probably aren't using "an order of magnitude" in the full scientific sense, but rather in the "a whole lot more" sense. I'd be interested in what an independent investigation would reveal.
  - joelhaus 15y ago
    Considering that almost everyone has a stake (i.e. as either a user or a provider), I'd imagine that an independent investigation could only be done by a government entity forcing disclosure of this information by a private company. Actually, does anyone know of a government funded ISP that makes this information public?
ff0066mote 15y ago
This is heartening news because connectivity is becoming a commodity. Will anything come of it? Recently net neutrality ended and now we have 250 GB/Month bandwidth caps as Comcast customers. I'm not worried about ever hitting that cap, but I am worried about the cap tightening over the next couple of years. Everyone talks about Google and Facebook's control over their information, but I don't hear enough concern about ISPs' collective control over access to information.
- vacri 15y ago
  Here in Aus we have always had caps. They've done nothing but increase over the years. My SOHO plan with a quality ISP is $80 for 150GB, for comparison, but you can get cheap no-frills residential for $40 for the same quota. I doubt the caps where you are will come down much, if at all. Last year my quota was 60GB, 1-2 years before that it was 25, so on and so forth.
  - vacri 15y ago
    past chance to edit: my timeline is out. I think I was on 60GB for 3 years or so, not 1-2. I can't quite recall, but the increase was slower than the above comment suggests
  - daemin 15y ago
    That and these days you can get 200, 500, 1000GB caps, which really are about as good as unlimited as you can get. You'd really have to push to download that much data in a calendar month.
- orangecat 15y ago
  Recently net neutrality ended and now we have 250 GB/Month bandwidth caps as Comcast customers. I don't consider a bandwidth cap applied univerally to be a violation of net neutrality. There may or may not be a legitimate justification for it, but it's still treating all traffic the same. The violation would be if they charged/extorted sites like Netflix or YouTube to collect payments in exchange for traffic to them not counting against the cap.
  - nitrogen 15y ago
    Bandwidth caps can be seen as discriminating against higher-volume types of traffic, like high definition video (which directly competes with cable TV). If you limit the amount of HD video people can watch online in a given month, they are pushed toward your cable TV product. For what it's worth, Comcast is already extorting (or at least trying to extort) Netflix for payments.
- 15y ago
dave_sullivan 15y ago
The report was commissioned by content providers so I suspect the truth lies somewhere between. Still, at least with my phone I have my choice of carriers and will be switching from AT&T to Verizon this month. I don't have that same choice in choosing a "high speed" ISP... I wish some comcast competition would move into town, the consumer might end up with a better quality product.
- irons 15y ago
  The truth doesn't have to lie somewhere in between. Look at the last paragraph: Even for ISPs running their own network, such as BT, [ISP CTO] Davies claims the figures of €0.01-0.03 per GB are "rubbish". "It's an order of magnitude greater than that," he claimed. This is coming from a guy claiming that the "existing smartphone data tariffs of around €10 per GB" are too low. They're profit-seeking, and relying on their regulators to be as bad at math as they are.
  - click170 15y ago
    The problem, at least in Canada, isn't that the CRTC is bad at math, it's that almost all of the people making decisions used to be executives for the ISP and or Telecoms industry.
- rndmize 15y ago
  Not sure how that'd be possible; wouldn't a competitor have to run cable of some type to the homes? Its hard to compete when your competitor has all their infrastructure down and you have to build yours from scratch.
- nitrogen 15y ago
  ...the truth lies somewhere between. This is a dangerous fallacy exploited by entities like giant ISPs and the MPAA to push debate toward their desired outcomes. If everyone believes that "the truth lies somewhere between," then all an extreme actor needs to do is argue for extreme position A against the status quo B, and public opinion (and political discourse) automatically shifts to (A+B)/2 every time the extreme actor raises the issue. In reality, the truth may be exactly B, but because of a well-intentioned but fallacious desire to compromise, opinion and policy are skewed away from the truth. The classic example of this fallacy is this: "Some say the sun rises in the east. Some say it rises in the west. The truth must lie somewhere between." https://secure.wikimedia.org/wikipedia/en/wiki/Argument_to_moderation https://secure.wikimedia.org/wikipedia/en/wiki/Argument_to_m... https://secure.wikimedia.org/wikipedia/en/wiki/Overton_Window_Theory https://secure.wikimedia.org/wikipedia/en/wiki/Overton_Windo...
tomjen3 15y ago
Why are we even having this discussion? It is just a bunch of companies who want a subsidy because.. well because they want a subsidy. The best way to end it is to slap them with a higher tax until they shut up. But that would require both balls and common sense.
- bryanh 15y ago
  I don't understand this logic, what would the higher tax accomplish?
  - suivix 15y ago
    Punishing the greedy capitalists?
    - delinka 15y ago
      Or adding yet another hike to your internet bill. Do you really think taxes prevent companies from going up on prices? Of course not. It won't affect their profits at all. They'll just charge customers more to offset the tax.
  - tomjen3 15y ago
    As it is there is no incentive for the companies to not try to get a subsidy and every incentive to try to get it. If congress makes the habit of slamming those companies which seeks subsidies with a tax, it will mean that companies have an incentive to shut up and compete on the open market. This will improve the US economy and lower the deficit.
- wnight 15y ago
  Heh. We could revoke their right to use publicly funded wires and let them try to become a wireless ISP overnight or go bankrupt, and meanwhile give their cushy near-monopoly position on the developed infrastructure to a more worthwhile company. I pay my ISP. This is all the funding they will receive. If they start to collect from others, for me, it won't be my service anymore and they won't be responsive to my needs.
Bo102010 15y ago
I have worked for ISPs where people who are making decisions about "bandwidth" _do not understand_ the difference between "bits" and "bits per second." These decision-makers would say that "Our costs for providing backhaul / transport / whatever is going up - no matter how much we upgrade, its capacity is exhausted either immediately or very quickly. We have to recover that cost somehow, or we won't be able to continue providing any service." However, they don't understand that their equipment and transport are constrained at the level of "bits per second at peak" and not "sum of bytes transferred during a billing period." So, they end up making bad decisions about "charging $x per GB after y GB transferred per month."
- Pyrodogg 15y ago
  How long until we get to peak and off-peak rates for data usage by ISPs, much like some electrical utilities?
  - shabble 15y ago
    It doesn't translate to direct costs, but my speed is largely dependent on contention with other users, and drops heavily during 'peak hours'. Then again, I suppose you could argue cost per GB = integral(download speed * time) / cost per month, so 1GB at slow speeds is costing me more in terms of time-bandwidth product at peak rates than otherwise. Soft data caps and peak-time QoS might also be happening behind the scenes, skewing matters more.
    - Bo102010 15y ago
      Cost per GB isn't really even what you want to measure, and doing so is what causes so much confusion. Let's say you're an ISP and you have a 10Gbps connection to the outside world, and the routers etc. that can keep up with that speed. To a first approximation, your costs to serve up 10Gbps to all the customers in your area is 0 (you've got to pay for electricity and engineers and etc, but this doesn't vary with user activity). If your customers in your area all queued up nicely and downloaded stuff at full rate, never overlapping with each other, you could transfer 10Gbps * 1 month for basically nothing. However, your customers all want to do stuff at the same time, and thus contend with each other for a slice of that 10Gbps. If you want to serve all of their requests, you're going to have to spring to upgrade your total capacity. If you don't own your own fiber, you have to rent a link from someone else, or if you do and there's no more available you have to physically come up with more (and pay to dig up the road and etc.). Now your routers and etc. might not be able to keep up with your new backhaul speed, and you have to upgrade those... You really want to measure "Marginal cost of +x Kbps during the busiest typical hour."
gergles 15y ago
In other news: "water wet", "pope catholic", "bears shit in woods".
7952 15y ago
Within the UK I think that you tend to get what you pay for from the ISP. They just create irrelevant metrics and restrictions to prove to customers why they should upgrade to a better plan. Perhaps they should just make the ISP's publish typical speeds for a particular location, so that you can make an informed comparison. This is exactly what better informed customers already do, instead of just going with BT.
azulum 15y ago
«Even for ISPs running their own network, such as BT, Davies claims the figures of €0.01-0.03 per GB are "rubbish". "It's an order of magnitude greater than that," he claimed.» awesome, so it only costs about a quarter for a gigabyte. so i use about 20 GB a month. can i just pay 5 bucks a month? yeah, i didn't think so. i'm pure gravy for them, and what does comcast charge me for 4 to 10 Mbps? $70 and don't get me started about the fixed cost versus the variable cost—the variable cost is certainly not more than a few cents per GB but the fixed costs can be enormous. i wish the internet was just a utility.
nasmorn 15y ago
For mobile data you can get variable cost plans in Austria that you pay about 4$ per Gb for. So the cost cant be higher than that.
frink 15y ago
This is the report being talked about for those that are interested [PDF]: http://www.plumconsulting.co.uk/pdfs/Plum_October2011_The_open_internet_-_a_platform_for_growth.pdf http://www.plumconsulting.co.uk/pdfs/Plum_October2011_The_op...
tompagenet2 15y ago
I'm not quite sure what point the consultancy is making on the future mobile-data rates. The article says: However, it claims forthcoming 4G technologies will significantly reduce those costs. "Forward-looking estimates which take account of the transition to LTE [Long Term Evolution], additional spectrum and traffic subscriber growth... puts the cost to the mobile network operators at under €1 per GB," Does that include the cost of the 4G licenses? In the UK these haven't been issued yet. If an operator pays £4bn [1] for the license and has 10m customers it needs to charge an extra £1 to every customer every month for 33 years to cover the cost of that license. That's not an inconsiderable amount before we begin talking about data. [1] Costs based on UK 2000 licenses: http://news.bbc.co.uk/2/hi/business/727831.stm http://news.bbc.co.uk/2/hi/business/727831.stm

110 points by pwg 15y ago

> Even for ISPs running their own network, such as BT, Davies claims the figures of €0.01-0.03 per GB are "rubbish". "It's an order of magnitude greater than that," he claimed. Right. So let's start seeing those prices get in the 0.10~0.30€/GB now shall we?

ColinDabritz 15y ago
I'm sure you're right that prices are pretty low overall, vs the high rates of overage fees, but I wanted to point out that the same people who can't tell bits from bits per second and dollars from cents probably aren't using "an order of magnitude" in the full scientific sense, but rather in the "a whole lot more" sense. I'd be interested in what an independent investigation would reveal.
- joelhaus 15y ago
  Considering that almost everyone has a stake (i.e. as either a user or a provider), I'd imagine that an independent investigation could only be done by a government entity forcing disclosure of this information by a private company. Actually, does anyone know of a government funded ISP that makes this information public?

ff0066mote 15y ago

This is heartening news because connectivity is becoming a commodity. Will anything come of it? Recently net neutrality ended and now we have 250 GB/Month bandwidth caps as Comcast customers. I'm not worried about ever hitting that cap, but I am worried about the cap tightening over the next couple of years. Everyone talks about Google and Facebook's control over their information, but I don't hear enough concern about ISPs' collective control over access to information.

vacri 15y ago
Here in Aus we have always had caps. They've done nothing but increase over the years. My SOHO plan with a quality ISP is $80 for 150GB, for comparison, but you can get cheap no-frills residential for $40 for the same quota. I doubt the caps where you are will come down much, if at all. Last year my quota was 60GB, 1-2 years before that it was 25, so on and so forth.
- vacri 15y ago
  past chance to edit: my timeline is out. I think I was on 60GB for 3 years or so, not 1-2. I can't quite recall, but the increase was slower than the above comment suggests
- daemin 15y ago
  That and these days you can get 200, 500, 1000GB caps, which really are about as good as unlimited as you can get. You'd really have to push to download that much data in a calendar month.
orangecat 15y ago
Recently net neutrality ended and now we have 250 GB/Month bandwidth caps as Comcast customers. I don't consider a bandwidth cap applied univerally to be a violation of net neutrality. There may or may not be a legitimate justification for it, but it's still treating all traffic the same. The violation would be if they charged/extorted sites like Netflix or YouTube to collect payments in exchange for traffic to them not counting against the cap.
- nitrogen 15y ago
  Bandwidth caps can be seen as discriminating against higher-volume types of traffic, like high definition video (which directly competes with cable TV). If you limit the amount of HD video people can watch online in a given month, they are pushed toward your cable TV product. For what it's worth, Comcast is already extorting (or at least trying to extort) Netflix for payments.
15y ago

dave_sullivan 15y ago

The report was commissioned by content providers so I suspect the truth lies somewhere between. Still, at least with my phone I have my choice of carriers and will be switching from AT&T to Verizon this month. I don't have that same choice in choosing a "high speed" ISP... I wish some comcast competition would move into town, the consumer might end up with a better quality product.

irons 15y ago
The truth doesn't have to lie somewhere in between. Look at the last paragraph: Even for ISPs running their own network, such as BT, [ISP CTO] Davies claims the figures of €0.01-0.03 per GB are "rubbish". "It's an order of magnitude greater than that," he claimed. This is coming from a guy claiming that the "existing smartphone data tariffs of around €10 per GB" are too low. They're profit-seeking, and relying on their regulators to be as bad at math as they are.
- click170 15y ago
  The problem, at least in Canada, isn't that the CRTC is bad at math, it's that almost all of the people making decisions used to be executives for the ISP and or Telecoms industry.
rndmize 15y ago
Not sure how that'd be possible; wouldn't a competitor have to run cable of some type to the homes? Its hard to compete when your competitor has all their infrastructure down and you have to build yours from scratch.
nitrogen 15y ago
...the truth lies somewhere between. This is a dangerous fallacy exploited by entities like giant ISPs and the MPAA to push debate toward their desired outcomes. If everyone believes that "the truth lies somewhere between," then all an extreme actor needs to do is argue for extreme position A against the status quo B, and public opinion (and political discourse) automatically shifts to (A+B)/2 every time the extreme actor raises the issue. In reality, the truth may be exactly B, but because of a well-intentioned but fallacious desire to compromise, opinion and policy are skewed away from the truth. The classic example of this fallacy is this: "Some say the sun rises in the east. Some say it rises in the west. The truth must lie somewhere between." https://secure.wikimedia.org/wikipedia/en/wiki/Argument_to_moderation https://secure.wikimedia.org/wikipedia/en/wiki/Argument_to_m... https://secure.wikimedia.org/wikipedia/en/wiki/Overton_Window_Theory https://secure.wikimedia.org/wikipedia/en/wiki/Overton_Windo...

tomjen3 15y ago

Why are we even having this discussion? It is just a bunch of companies who want a subsidy because.. well because they want a subsidy. The best way to end it is to slap them with a higher tax until they shut up. But that would require both balls and common sense.

bryanh 15y ago
I don't understand this logic, what would the higher tax accomplish?
- suivix 15y ago
  Punishing the greedy capitalists?
  - delinka 15y ago
    Or adding yet another hike to your internet bill. Do you really think taxes prevent companies from going up on prices? Of course not. It won't affect their profits at all. They'll just charge customers more to offset the tax.
- tomjen3 15y ago
  As it is there is no incentive for the companies to not try to get a subsidy and every incentive to try to get it. If congress makes the habit of slamming those companies which seeks subsidies with a tax, it will mean that companies have an incentive to shut up and compete on the open market. This will improve the US economy and lower the deficit.
wnight 15y ago
Heh. We could revoke their right to use publicly funded wires and let them try to become a wireless ISP overnight or go bankrupt, and meanwhile give their cushy near-monopoly position on the developed infrastructure to a more worthwhile company. I pay my ISP. This is all the funding they will receive. If they start to collect from others, for me, it won't be my service anymore and they won't be responsive to my needs.

Bo102010 15y ago

I have worked for ISPs where people who are making decisions about "bandwidth" _do not understand_ the difference between "bits" and "bits per second." These decision-makers would say that "Our costs for providing backhaul / transport / whatever is going up - no matter how much we upgrade, its capacity is exhausted either immediately or very quickly. We have to recover that cost somehow, or we won't be able to continue providing any service." However, they don't understand that their equipment and transport are constrained at the level of "bits per second at peak" and not "sum of bytes transferred during a billing period." So, they end up making bad decisions about "charging $x per GB after y GB transferred per month."

Pyrodogg 15y ago
How long until we get to peak and off-peak rates for data usage by ISPs, much like some electrical utilities?
- shabble 15y ago
  It doesn't translate to direct costs, but my speed is largely dependent on contention with other users, and drops heavily during 'peak hours'. Then again, I suppose you could argue cost per GB = integral(download speed * time) / cost per month, so 1GB at slow speeds is costing me more in terms of time-bandwidth product at peak rates than otherwise. Soft data caps and peak-time QoS might also be happening behind the scenes, skewing matters more.
  - Bo102010 15y ago
    Cost per GB isn't really even what you want to measure, and doing so is what causes so much confusion. Let's say you're an ISP and you have a 10Gbps connection to the outside world, and the routers etc. that can keep up with that speed. To a first approximation, your costs to serve up 10Gbps to all the customers in your area is 0 (you've got to pay for electricity and engineers and etc, but this doesn't vary with user activity). If your customers in your area all queued up nicely and downloaded stuff at full rate, never overlapping with each other, you could transfer 10Gbps * 1 month for basically nothing. However, your customers all want to do stuff at the same time, and thus contend with each other for a slice of that 10Gbps. If you want to serve all of their requests, you're going to have to spring to upgrade your total capacity. If you don't own your own fiber, you have to rent a link from someone else, or if you do and there's no more available you have to physically come up with more (and pay to dig up the road and etc.). Now your routers and etc. might not be able to keep up with your new backhaul speed, and you have to upgrade those... You really want to measure "Marginal cost of +x Kbps during the busiest typical hour."

gergles 15y ago

In other news: "water wet", "pope catholic", "bears shit in woods".

7952 15y ago

Within the UK I think that you tend to get what you pay for from the ISP. They just create irrelevant metrics and restrictions to prove to customers why they should upgrade to a better plan. Perhaps they should just make the ISP's publish typical speeds for a particular location, so that you can make an informed comparison. This is exactly what better informed customers already do, instead of just going with BT.

azulum 15y ago

«Even for ISPs running their own network, such as BT, Davies claims the figures of €0.01-0.03 per GB are "rubbish". "It's an order of magnitude greater than that," he claimed.» awesome, so it only costs about a quarter for a gigabyte. so i use about 20 GB a month. can i just pay 5 bucks a month? yeah, i didn't think so. i'm pure gravy for them, and what does comcast charge me for 4 to 10 Mbps? $70 and don't get me started about the fixed cost versus the variable cost—the variable cost is certainly not more than a few cents per GB but the fixed costs can be enormous. i wish the internet was just a utility.

nasmorn 15y ago

For mobile data you can get variable cost plans in Austria that you pay about 4$ per Gb for. So the cost cant be higher than that.

frink 15y ago

This is the report being talked about for those that are interested [PDF]: http://www.plumconsulting.co.uk/pdfs/Plum_October2011_The_open_internet_-_a_platform_for_growth.pdf http://www.plumconsulting.co.uk/pdfs/Plum_October2011_The_op...

tompagenet2 15y ago

I'm not quite sure what point the consultancy is making on the future mobile-data rates. The article says: However, it claims forthcoming 4G technologies will significantly reduce those costs. "Forward-looking estimates which take account of the transition to LTE [Long Term Evolution], additional spectrum and traffic subscriber growth... puts the cost to the mobile network operators at under €1 per GB," Does that include the cost of the 4G licenses? In the UK these haven't been issued yet. If an operator pays £4bn [1] for the license and has 10m customers it needs to charge an extra £1 to every customer every month for 33 years to cover the cost of that license. That's not an inconsiderable amount before we begin talking about data. [1] Costs based on UK 2000 licenses: http://news.bbc.co.uk/2/hi/business/727831.stm http://news.bbc.co.uk/2/hi/business/727831.stm