

Cable Industry Finally Admits That Data Caps Have Nothing To Do With Congestion - louhong
http://www.techdirt.com/articles/20130118/17425221736/cable-industry-finally-admits-that-data-caps-have-nothing-to-do-with-congestion.shtml

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fjorder
Re: Pricing Fairness

The article claims that if the Cable industry offered pricing based on what is
fair, it would offer very cheap plans for little old ladies who barely use
their connections. This definition of "fair" assumes that what you pay is
proportional to how much you use it.

The real world almost never works this way.

Does a new car cost less if you drive it less? Perhaps a little in terms of
maintenance and gas, but the initial cost is still the same. Does a banana
cost less if you only eat half of it? Does a comb cost less if you're bald?

This leads us to the other definition of "fairness", which is also not often
closely associated with real-world prices. i.e. What you pay is proportional
to the cost of producing it. If Cable plans were priced this way, a Granny
plan would be just a few dollars cheaper than the super-high-use plan. Why?
Bandwidth is _cheap_ compared to last-mile installation and maintenance costs.
The cost of getting the first bit to grandma is astronomically more expensive
than getting the last gigabyte to a heavy bandwidth user.

So how does the real world work? In the overwhelming majority of cases,
companies charge whatever people are willing to pay. This price frequently has
little or no correlation to actual cost. This is why airlines typically lose
money while cable providers do pretty well for themselves. The NCTA's claims
that "fairness" is the motivation behind usage-based billing is complete BS.
People who use more bandwidth are willing to pay more. That's the reason for
usage based billing. Fairness has nothing to do with it.

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rlpb
It should be made clear that this problem does not necessarily exist outside
the US. Here in the UK, I'd say that we have healthy competition in the ISP
industry, due to a sensible regulatory system. ISPs have a variety of
different pricing models here.

If you want to fix the problem, look at what's happening outside the US.

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maxharris
They have a right to offer whatever terms they want, and you have the right to
accept or reject those terms.

If you can't find a company that will grant you the service you want on your
terms, you have the right to _attempt_ to form your own company and find
customers.

One thing you do not have the right to do is to try to assemble a mob and get
them to vote a new law into place that would force the company to bend to your
ideas on how it should be run. That kind of unlimited democracy is precisely
the sort of tyranny that killed Socrates, and I say that is morally wrong.

~~~
idan
I have a precious "right" to complain to my government that monopolies are
causing me to be underserved, especially since those same monopolies are often
the beneficiaries of government assets (rights-of-way, spectrum, money from my
taxes, etc. )

Don't see what is "morally" wrong about that.

I live in Israel, which passed strict regulations about contract term limits,
number portability, service bundling, and even SIM locking (all devices must
be sold unlocked by law). As a result, cellular service prices plunged due to
competition here—not because they were regulated to be lower, but because they
were regulated to compete vigorously.

