

"Very bold or very dumb": data caps don't apply to ISP's own movie service - d0ne
http://arstechnica.com/tech-policy/news/2011/07/very-bold-or-very-dumb-data-caps-dont-apply-to-isps-own-movie-service.ars

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MatthewB
This is exactly what I've been fearing for a while. As soon as we go soft on
the net neutrality issue, ISPs are going to take advantage. Favoring some
traffic over others because they are part of an ISPs product line is
ridiculous and anti-competitive.

With practices like these it will become increasingly rare for startups to be
able to compete with large companies because customers won't want to spend
extra money to use a startup's service.

There is a distinct difference between capping a customer's traffic after a
certain point (which I don't agree with either) and favoring some traffic over
another.

This is bad for everyone.

~~~
IgorPartola
> There is a distinct difference between capping a customer's traffic after a
> certain point (which I don't agree with either)

Why do you not agree with it? Is it because you feel that you have no choice
in the matter, or because you think it is somehow wrong to charge for some
things and not others. Once again, this is the ISP's house, and their rules.
They can charge $10 billion per byte. You don't have to pay of course.

The big problem I see with this is if they deliberately slow down services
like Netflix. Or if by providing their own streaming service, they are
exhausting the bandwidth, thus effectively throttling services like Netflix.
Otherwise, they have a natural advantage: they are transmitting data from a
much closer location. Otherwise, it would be like requiring that your water
company deliver you water sourced in the Alps for the same price as from your
local reservoir.

EDIT: Back to data caps issues: I love them. Because now if there is any
question on what I can or cannot do, there is no fuzzy wording about
"appropriate network use", etc. I get 100GB a month or I do not. Anything
"unlimited" is evil. My big issue is that companies like Verizon, AT&T, etc.
only sell plans that are capped very low: 2GB a month is nothing for the way I
use data. Give me 200GB a month and I'll pay $30-45/mo for the privilege. And
while you are at it, drop the silly minutes notion. Just provide data.

~~~
esrauch
I think the reason why people hate caps is because there is nonobvious how
much data you have used or even are currently using at any moment. Sure you
can typically log in and discover how much you have used but that workflow is
well beyond what the average consumer is willing to do, even if they are
technologically aware enough to know to do so.

This, combined with borderline draconian pricing schemes, makes for horror
stories where someone had a $30/month plan and they end up getting charged
$300 for using 2x their rate.

When you decide to use your hair dryer, you don't have to wonder if it's going
to cost you $0.15 or $15.00. Electricity or water utilities are billed
generally flat per-usage, the pricing schemes that come with bandwidth caps
are not. So you paid $30 for X amount of data, which should indicate that the
cost per data is $30/X, but if you use Y amount of data you have _no idea_
what the price of it will be; it depends on your historical usage (and that of
your teenage kid or neighbor who was on your open wifi or ...)

Bandwidth caps are a perfectly reasonable concept; higher usage actually does
cost the company more to provide. But it is simply _not_ the case that sending
1000 texts costs the company $10 but sending 2000 texts costs the company
$100. It seems extremely likely to me that the plans are deliberately obtuse
so that they can fleece customers of their money without any way of the user
knowing until very far after the fact.

ISPs easily could redirect users to a page that says "You have used your quota
for the month, would you like to continue at our per-byte rate of XXXX?" and
block all their traffic until the user sees the page in the browser and click
yes. I'm fairly certain that anyone who actually uses a capped plan would
greatly prefer having the choice. They do not do this because they don't
actually care about overages, they are being underhanded to trick people into
using an expensive service without their knowledge.

~~~
ams6110
_When you decide to use your hair dryer, you don't have to wonder if it's
going to cost you $0.15 or $15.00._

If you are a commercial customer, you actually might. Often times big
consumers will have tiered rates based on time of day or caps that trigger
punitive rates when they are exceeded.

~~~
halostatue
Not just big customers. Here in Toronto (not in Shaw's jurisdiction, but if
Shaw isn't slapped _hard_ on this very soon, Rogers and Bell will do the
same), we have Time-Of-Usage rates with smart meters. Our usage is still
fairly predictable because there's three time bands, but we pay 5.9c/kWh at
low price, 8.9c/kWh at mid price, and 10.7c/kWh at high price
([http://www.torontohydro.com/sites/electricsystem/residential...](http://www.torontohydro.com/sites/electricsystem/residential/smartmeters/Pages/TOURates.aspx)).

~~~
lutorm
Same in California, with PG&E we had an gas & electricity rate that increased
quite steeply if you went beyond "normal household" amounts.

------
MatthewPhillips
My ideal ISP: Providing internet access is their only business. They thrive at
providing as fast service as they can. If they have to have data caps that's
fine; but they don't advertise unlimited unless that's what they provide. They
don't inspect packets.

It seems that few of my ideal ISPs exist. My question is: why? Does the market
not favor this type of ISP? Or does the other type have a competitive
advantage that prevents my ideal ISP from thriving (and if so, what is it?)?

~~~
natnat
When all you do is provide a dumb pipe, you're a commodity. When you're
selling a commodity, and there is any competition at all, your margins will
race down to virtually nothing pretty damn quickly. No one wants to invest
billions of dollars to build up the infrastructure for a barely profitable
ISP.

~~~
RyanKearney
>No one wants to invest billions of dollars to build up the infrastructure for
a barely profitable ISP.

Google does.

~~~
tedunangst
Providing internet access is not Google's only business.

------
dstein
It's not bold or dumb in Canada. Expect to see similar plans from Rogers and
Bell very soon. The Canadian telecom industry, backed by the CRTC, has
operated as a public cartel for a very long time now. These are the same folks
responsible for giving us the highest cell phone rates in the world, no such
thing as nation-wide long distance plans, maximum data caps that dropped from
95GB to 80GB over the past 5 years (at least on Rogers), and basic cell phone
plans don't even come with call display or voice mail (those are extra
features).

Unless a government rolls in and breaks the ISP portions off into independent
companies I don't see anything on the horizon stopping this syndicate.

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soneil
I'm in mixed minds about this.

For as long as I remember, Australian linux users have been able to download
isos from their ISPs own mirrors, without it counting against their cap. Which
makes total sense, because it's internal to the ISPs network, so it costs them
zero in peering fees.

It's hard to argue that this is a bad idea.

Now Shaw do the same thing, and it's .. awkward. It smells anticompetitive &
self-serving. But it's essentially the same thing.

~~~
decadentcactus
iinet (at least) also gives free quota to 3FL gaming servers, as well as a
large portion of Steam downloads. Which I've definitely never had a problem
with it (still being able to play games when capped = :D)

------
alex_c
This is what data caps have been about all along, at least in Canada - I
sincerely hope no one is surprised. I'm just a bit surprised to see Shaw
leading the charge, and not Rogers or Bell.

This is what happens when all the major ISPs in a country also happen to be
the major TV companies. There's no reason to expect them to just roll over and
die while the Internet eats their lunch.

~~~
halostatue
Shaw is smaller than Rogers or Bell. If they can get away with it, you can bet
that Rogers and Bell will be chasing quickly behind.

Stephen "Friend to Big Businesses and Media Conglomerates" Harper won't bat an
eyelid about how bad this is for consumers and competition.

------
naner
Comcast appears to be aware of the net neutrality concerns since they don't
give their Xfinity streaming service any preference[1]. Their VOIP, however,
doesn't count against your quota. They claim that is because it uses different
infrastructure.

1:
[http://customer.comcast.com/Pages/FAQViewer.aspx?seoid=Frequ...](http://customer.comcast.com/Pages/FAQViewer.aspx?seoid=Frequently-
Asked-Questions-about-Excessive-Use#otherusage)

~~~
alsocasey
This is actually an interesting point - Shaw's VOIP service similarly doesn't
count towards cap. As mentioned in the update to the ArsTechnica article, the
movie service not counting is apparently because it is delivered via different
infrastructure -

"Shaw's existing video-on-demand QAM cable infrastructure. When users access
Movie Club through a computer, they will access an IP-based version of it
delivered over the Internet—and this will affect monthly data caps."

but surely the VOIP phone data is delievered over the internet...

~~~
afiler
The VOIP data is probably not delivered over the internet for local calls. The
calls probably come out of the cable network and hit a softswitch in the same
city. For local calls, they probably have a TDM interface (T1s/DS3s etc) to
the incumbent carrier and possibly other CLECs too.

------
eoinmcc
This has been happening in Australia for a little while now. 2 of the biggest
providers have struck deals with all sorts content providers (IPTV, music,
etc) to provide unmetered access. Most people see this as a good thing (data
caps are pretty high here, reasonably priced for 100GB/month), but as more and
more content starts coming via the internet, 100GB won't last very long.

Here are the 2 "freezone" or unmetered offerings by bigpond and iinet in
Australia <http://www.bigpond.com/unmetered/> <http://freezone.iinet.net.au/>
(Freezone Partners at the bottom).

Very clever..

------
rickdale
At college I worked close to the networking department. It was common
knowledge that whenever a computer went to do a speed test, the user would get
more bandwith, thus showing a higher speed. It was also the case that faculty
got more bandwith during the day. The internet was shoddy and this was just 2
years ago..

------
Splines
Taking this even further, what if an ISP partnered with
Google/Facebook/Twitter/whatever to expose their services on an "internal"
box, and thusly provide an extreme "basic internet" ISP package that didn't
allow you to leave the ISP's network?

Alternatively, should ISPs be charging for P2P traffic that stays within the
network?

~~~
lmz
There are already "basic packages" like that where I live: free access to
Facebook using Facebook Zero. Also BlackBerry access packages that only give
you email & chat / Facebook access only, without web browser access to the
entire Web.

------
Maci
Slightly offtopic perhaps, but would IPv6 + multicast use substantially lower
the cost for ISPs and Content Providers ?

By that same token, wouldn't that be a reason to push IPv6 more into the
market place as everybody wins in the end ?

~~~
wmf
Multicast doesn't (currently) work in the Internet due to router state cost,
and is orthogonal from IPv6. In a hypothetical Internet where multicast works
and is free, I could see pirates adopting it but anybody who can afford to pay
would probably stick with unicast — bandwidth isn't _that_ expensive these
days.

~~~
Maci
Merci.

------
kefs
__This article is incorrect. __

<https://twitter.com/#!/ShawInfo/status/91924351456260096>

~~~
jmreid
If you watch shows through their set top box it doesn't count towards any
limit. So, kind of like standard cable going to a TV, where the TV channels
are on a dedicated 'connection' to the provider and watching TV doesn't
utilize the broadband connection.

I'd like to know if their set top box utilizes the same pipe and throughput
going to your house, and if watching a show through their set top box would
diminish throughput speeds for others on the line. If it does, then that's
bogus. If their box utilizes a separate dedicated connection to Shaw, then
that's fine and I say fair.

However, in practice, it's hard for average folks to understand why Shaw's box
doesn't count towards a limit when the Apple TV, Netflix-enabled Blu-ray box
or whatever DOES count towards the limit. But I'm not sure Shaw is in the
wrong here if their box has a dedicated 'line' to them.

~~~
jsz0
It utilizes the same pipe insofar as it uses the same cable HFC
plant/infrastructure to deliver the signal to your home. On the wire however
typically VoD services on set tops do not use the same DOCSIS channels as
cable modems delivering IP video via Netflix, Hulu, etc. Cable VoD typically
is just a block of regular video channels. Your set top requests a program and
one of those video channels is allocated for this program. It's a bit old
fashioned but it works. It is however possible to do this over DOCSIS which
starts to blur the lines.

------
digamber_kamat
This thing is very common in India. Check out
<http://emergic.org/2009/02/17/we-versus-vodafone/>
<http://emergic.org/2009/02/18/we-versus-vodafone-day-2/>
<http://emergic.org/2009/02/18/we-versus-vodafone-day-2/>

------
shaunfs
I understand the argument that traffic from your current network is cheaper
and therefor enables cap-less ISP services but I think it's nieve to believe
these ISPs don't intend to control as much of your purchase and viewing
activity as possible. Cable companies do this now with traditional cable and
telephony services and it makes them a fortune. Any ISP owner worth their salt
would always prefer to have an unfair advantage instead of an even playing
field. Capping your competition is an unfair advantage and too good to pass up
if legal.

First it's the direct media (movies, music, etc), then it could be gaming
networks, VOIP services, cloud file storage and so on. It's entirely
conceivable that we would be financially forced to use the lower quality
services of an individual ISP instead of a higher quality alternative. Then
the real competition would be ISPs fighting over physical turf while online
services look to parter with those ISPs instead of focusing on innovative
products.

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mwsherman
I’m afraid this demonstrates how ad-hoc the definition of net neutrality is.
No packets are being blocked; none are being slowed down. The ISP is not
charging any content provider a special rate.

(If having the content “homed” on the ISP’s network is a problem, then any CDN
would be a problem.)

I am not saying that the ISP isn’t taking advantage for their own benefit. I
am not saying it’s not shady.

I _am_ saying that the behavior is not a violation of any previous technical
definition of neutrality – maybe the “spirit” of it, but technologists don’t
believe in spirits, one hopes.

~~~
argv_empty
_No packets are being blocked; none are being slowed down._

Sure they are. If I try to watch _n_ GB of movies on NetFlix, then the last
_n-m_ GB get blocked, whereas on the ISP's service, none do (where _n_ > _m_ =
data cap).

 _maybe the “spirit” of it, but technologists don’t believe in spirits, one
hopes._

This is a pretty silly equivocation.

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mwilcox
We've had things like this in NZ for several years now

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jcromartie
This is what net neutrality was all about. They said it would never happen...

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smutticus
How is this not a violation of Sherman anit-trust legislation?

Sometimes metaphors for the internet/cyber world don't map well to real worl
past examples. But this instance aligns very well to Standard Oil's transport
rebates for their own oil. Oil is to content as railroads are to networks.

IANAL but until the US starts enforcing anti-trust legislation this kind of
thing will continue to happen. Net neutrality doesn't stand a chance against
these kinds of behemoth ISPs and their lobbyists.

~~~
joshwa
Because they're in Canada.

