
56% of Americans have Internet data caps; FCC asked to investigate - amnigos
http://arstechnica.com/tech-policy/news/2011/05/56-of-americans-have-internet-data-caps-fcc-asked-to-investigate.ars
======
runningdogx
Verizon did something interesting with their wireless network: they track
heavy bandwidth users and throttle them during peak traffic periods. [1]

That seems like a more reasonable option than hard traffic caps. It's no
surprise more wired ISPs aren't using that strategy, though... hard caps
generate revenue, while rate limiting heavy users doesn't. That wouldn't be
such a problem if there were healthy competition in most metro markets, but
there isn't.

Verizon FIOS is one of the few good [fast] U.S. wireline ISP options left that
doesn't cap traffic. It's too bad many markets are still de-facto duopolies
(from the days when there was a meaningful distinction between "telephone" and
"cable" companies aside from layers 1-2). FIOS isn't available here, and if it
were I'd switch in a heartbeat because of AT&T's incompetence [2].

[1] [http://www.tekgoblin.com/2011/02/03/verizon-to-throttle-
high...](http://www.tekgoblin.com/2011/02/03/verizon-to-throttle-high-
bandwidth-users/)

[2]
[http://leaf.dragonflybsd.org/mailarchive/users/2011-02/msg00...](http://leaf.dragonflybsd.org/mailarchive/users/2011-02/msg00074.html)

~~~
DrJ
I full heartedly support throttling during peak traffic, but I don't see a
reason for bandwidth capping.

We should all rise up as one and really ask, if we are now paying $X for $Y GB
of data, why doesn't it roll over like Minutes or a persistent commodity.

I'd also like to point out Charter Communications doesn't throttle nor cap
their bandwidth and yet the service is great!

~~~
achompas
_We should all rise up as one and really ask, if we are now paying $X for $Y
GB of data, why doesn't it roll over like Minutes or a persistent commodity._

Because user bandwidth is not, by definition, a persistent commodity. ISPs do
not accrue bandwidth every month they are under capacity, so why should users?

~~~
AretNCarlsen
I disagree completely. It's just like real estate: since I only use about 50%
of the floor space in my apartment at any given time, I roll over my unused
square footage and only pay rent every other month.

~~~
MatthewB
The difference is when you don't use your bandwidth, the company benefits, but
when you don't use your square footage, a company doesn't gain anything.

~~~
vladd
The ISP company only benefits if their pipe is saturated 100% at that moment.
If they had spare capacity at that point in time, it's of no use to them and
they can't carry it over.

------
PaulHoule
My I.S.P. (Frontier) wanted to cap DSL at 5 GB a month!

I'm not against metered billing, in principle, but the rates would have to be
reflective of what it costs to provision the marginal bandwidth.

The bandwidth cap issue highlights two crises that the industry faces: (i) the
nature of fiber optic networks is such that it's several orders of magnitude
cheaper to move data between hubs in major cities than it is to move it over
the "last mile" to the consumer and (ii) video streaming from Youtube, Netflix
and other providers is starting to provide real competition for cable
television.

(i) leads to pricing schemes that don't reflect the cost of provisioning
services; installing the "last mile" might cost a few thousand dollars up
front, but this gets amortized over bills that a customer pays over a long
time. Upgrading a customer to a higher speed tier is the only way that the ISP
can offer "better service for more money" to a customer but the increase
almost certainly won't be reflective of the difference in costs. As we've seen
in the airline industry, crazy pricing leads to pathology in the long time.

As for (ii), ISP's can't be seen as good actors when they are in the
competitive cable television business. As customers turn on to streaming
video, utilization is outpacing the rate at which ISPs want to invest in
infrastructure -- and in the long term, the many ISPs which are cable
providers realize that customers who've got access to Netflix and other
streaming video services might decide they don't need to blow $80 a month for
500 channels full of crap.

~~~
nitrogen
(ii) is a real threat to the cable companies. My apartment building pays for
basic cable, but I haven't even hooked up a tuner the entire time I've lived
here. I pay for Comcast's 50Mbit/s plan and get my video from
Hulu/Netflix/YouTube, and yet YouTube still stutters and buffers frequently.

~~~
PaulHoule
you bet. one underlying problem is the pricing model. you get "take it or
leave it" packages that were negotiated by guys in suits between cable
companies and content owners (who are often different units of the same
business.)

as a result, you pay for Fox News when you pay for basic cable in many places,
but you can't get Al Jazeera English. The consumer's got no way to say "I
don't care for Spongebob Squarepants" or "I don't want my kids watching those
stupid live action shows about rich kids that are on the Disney Channel" short
of withdrawing from the system alltogether.

With no market discipline on the individual channels, they can keep sucking
worse and worse until people eventually give up on the whole package.

------
walkon
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.

~~~
Dove
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
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
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
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?

~~~
jbri
If the market was actually open for competition, then there _would_ be
alternatives and no-one would complain about caps, they'd just move to another
provider.

The fact that bitching about the caps is people's only option should tip you
off to the fact that the market is not, in fact, open.

~~~
walkon
There is definitely competition, but even if there wasn't, that would mean
that the existing provider was good enough. What's stopping more alternatives
from appearing besides this? Probably looming legislation more than anything.
If you really hate it, instead of spending your energy lobbying for
regulations, go start your own ISP that gives everyone the world for a lower
flat rate. I'm sure you'll stay in business for a long time.

~~~
henrikschroder
In countries where there is actual competition between ISPs, such as Sweden,
and other parts of Europe, there are no caps. And our ISPs don't seem to
suffer for it. I'm sure they'd love to have caps, but the first one to do it
will just start bleeding customers, and none of them can afford that since the
market is saturated.

I have a throttle cap on my mobile internet though, I can use as much internet
as I like on my iPhone for a flat fee, but if I go over 5GB in a month, they
may throttle my speed for the next month. That's pretty fair, I guess, but
they're building out 4G now with even faster mobile internet, so those caps
are probably going to disappear slowly as people move over to newer technology
with more bandwidth than the current 3G/EDGE systems.

Stop being an apologist.

~~~
jasonlotito
> In countries where there is actual competition between ISPs

How do you define competition between ISPs?

~~~
henrikschroder
Where I am, I can choose between nine different ADSL providers, one cable
provider, and about six different mobile broadband providers. All of them want
me to switch to them, and they differ slightly in pricing, bundling, triple-
play, customer service, speed, etc.

~~~
jasonlotito
That's not what I'm asking. I have multiple providers of DSL internet, cable,
and mobile providers, all with varying services, pricing, etc. Each one
applies caps.

Where you are, are their lies that affect providers in that area? Or is it all
pure competition?

Did those 9 ADSL providers all lay their own line, or is their laws in effect
that make those providers lease their lines out to other providers?

Basically, is it pure competition?

~~~
henrikschroder
The copper network is owned by TeliaSonera, the former state telephone
monopoly, but they were forced to open that up to competitors so anyone could
install DSLAMs in the phone stations, etc. There's competing national fiber
networks as well, so no ISP has a stranglehold on the DSL market.

There's no competition and choice for cable though, you have the cable company
you have, and that's it.

For GSM networks, there's three separate, and two or three 3G networks, so
there's competition there as well.

In a few months my house is gonna be hooked up to the city fiber network, at
which point I can choose from another bunch of ISPs.

------
henrikschroder
What are these "data caps" you people are talking about? We don't have them on
regular broadband, mobile broadband or mobile internet here?

Kind regards, Sweden

~~~
tzs
So what happens if you start using your internet connection at full capacity
24/7, and so do all the other customers of your ISP?

On the kind of fast connections you have over there, you could easily run up
hundreds or even thousands of dollars worth of bandwidth charges for your ISP.
Will they just operate at a loss, or will the government step in and pay the
bandwidth costs, or will they throttle your speed down?

~~~
henrikschroder
I assume you can be throttled if you use too much, and in that weird scenario,
I assume the ISP would throttle everyone to balance costs.

Then again, most of our ISPs are tier1 or tier2 networks, so I assume they
don't worry too much about peering costs.

~~~
jbri
There wouldn't even need to be any explicit throttling - when a site gets
slashdotted or whatever everyone trying to access it slows to a crawl, but
it's not because individual user's ISPs are throttling them. An ISP that was
saturating its outbound links might drop packets according to some algorithm
to ensure "fairness" rather than at random, but that's still not throttling,
that's "our network is too congested to keep up with demand".

------
rickmode
The root problem is a lack of competition.

Ideas like government forcing service competition over the physical lines
along easements granted by the a government should be explored.

~~~
dstein
It's more than just lack of competition. What's happened is all cable
television and phone companies have realized they are completely fucked. The
Internet is way more disruptive than they originally thought. With VOIP and
Netflix/bittorrent nobody needs a phone or television anymore. So there is a
conflict of interest growing among the only companies that are providing
broadband internet.

These companies don't want to be relegated to simple utilities with low profit
margins, and so they are doing everything in their power to keep the cost of
data rising even while their cost of the bandwidth drops by half each year.
With bandwidth caps and usage-based billing at 5000% profit margin they are
simply begging the government to crack down on what ends up being highway
robbery.

------
rick888
Comcast has 250GB/month cap. If you go over it, you are put on the lowest plan
(no matter what you are paying) until they decide you can handle it.

I went over it by about 100GB last month and I got my service turned off. I
wasn't even downloading torrents.

~~~
RyanKearney
That is a lie <http://i.imgur.com/12nWd.png>

Oops that's slightly outdated, here's a new one <http://i.imgur.com/p1ku3.png>

~~~
beedogs
Ah, okay, your experience is different than his, so he's _lying_. Gotcha.

------
pseudonym
And of course, as long as Canada has 2-15G caps, they can always point across
the border and tell us how good we have it. Capitalism!

~~~
MikeCapone
I'm in Canada and with Teksavvy.com -- 300G cap, as long as the CRTC doesn't
take it away...

~~~
noarchy
I'm hoping that a silver lining in the recent Tory victory is that the door
could be opened to greater competition. The big telecom companies in Canada
have had their way for too long, and the quality of our internet service has
suffered mightily for it.

~~~
TillE
"Competition" is a funny old concept. When we're talking about competition
among telecoms, it's usually strongest in countries where the government has
mandated that owners of network infrastructure must allow resale. A hands-off
approach from the government gives you natural monopolies, because that
initial cost of building the infrastructure is so high.

Every supermarket chain in Germany has their own branded mobile network
reseller with prepaid SIM cards, and prices keep going down.

------
marklabedz
One day we'll have a solid wireless option that can compete with physical
lines. It will be just as disruptive as cell phones were to land lines. That's
the only way you get around the massive barrier to entry that is running
physical utility lines. One day.

------
ck2
FCC can't even enforce net-neutrality, they certainly will not be able to do a
darn thing about caps (if they even really care).

250 GB cap seems huge to me though, unless maybe you have a multi-user
household. I have a 50 GB cap but it doesn't seem to be enforced (yet).

~~~
georgemcbay
250 GB is very roughly* about 12 movies worth of Netflix. Higher than the
average user will use but nowhere near "huge" or unreasonable usage.

*(depends upon bitrate, sd vs hd, etc, so YMMV).

~~~
tzs
It's 2.16 GB/hour at the highest bitrate Netflix streams HD. That's 115 hours
to hit 250 GB. At two hours per movie that's 57 HD movies a month.

~~~
sofal
Sigh... I meant to upmod, not downmod.

------
tyng
In Australia, it's more like 95%... unless you pay for the super expensive
Unlimited plan

------
CrazedGeek
How many ISPs actually enforce their caps? Genuine question- my ISP, Cox,
technically has about a 100GB limit, but I know I've downloaded close to 1TB
in a month with no overages, throttling, or anything.

------
MatthewB
I had no idea data caps were this frequent. I am all about net neutrality and
the more selective throttling and data caps our data providers implement, the
less innovation we will see.

~~~
keeperofdakeys
Here in Australia, pretty much EVERY broadband provider has caps (there is
only one I know of that gives unlimited, although I can't get this because the
companies DSLAM isn't in my exchange). Don't even get me started on mobile
internet caps.

------
barrydahlberg
250GB is about my cap for the YEAR.

~~~
beedogs
Well, your ISP is shit.

~~~
barrydahlberg
Typical plans for our ISPs:

<http://www.orcon.net.nz/home/plans/>

------
heyrhett
"This will be my greatest lawsuit since 'The Never Ending Story'!"

