Frontier Communications "Testing" To See How Users Respond To Being Ridiculously Overcharged For Bandwidth

from the we-overcharge-because-we-can dept

Last year Time Warner Cable took a pretty severe beating from the press and public for plans to impose not only monthly broadband usage caps as low as 5 GB a month, but also for their decision to charge users up to $2 per additional GB. Given this was a 1,500-2,000% markup above bandwidth costs for the provider, most consumers realized that the already very profitable company was simply making a money grab -- and preparing to better monetize and/or stifle Internet video's impact on TV revenues. The media scuff up wasn't helped by company executives, who issued missives proclaiming that overcharging customers for bandwidth during a recession was only "fair" and that it would "actually encourage more use of broadband overall."

Time Warner Cable eventually backed off the plan, but not before their brand (which they're planning to change) took a lot of damage. One small reason they backed off was because one of the company's few competitors, Frontier Communications, started advertising their DSL service as uncapped in order to gain a competitive advantage. Despite the fact Frontier was previously planning to impose 5GB monthly caps on all speed tiers -- said ads lambasted the cable industry as greedy. Of course now that Time Warner Cable has backed off, Frontier is testing an even more ridiculous overcharging system.

According to a letter being sent to Frontier users in Minnesota, users who consume more than 100 GB a month are automatically having their bills bumped to $99 a month. Users who consume more than 250 GB a month are having their bills bumped to a staggering $250 a month. Users who don't respond within fifteen days get their service disconnected (throwing away a potential customer is always a brilliant business model). Keep in mind that Frontier is one of many American telcos that -- thanks to limited competition -- hasn't kept pace with demand or upgraded their network from last generation DSL technology in most markets. As such, many Frontier users don't see speeds above 3 Mbps to begin with, and that service can cost around $55 a month for a standalone (no voice landline) connection.

As in most of these efforts to overcharge broadband users, the letter being sent to consumers adds insult to injury -- informing users that the changes are being applied to provide "the best possible internet experience." The letter also informs users that anyone who uses over 5 GB of bandwidth a month is engaging in "unreasonable usage" according to the Frontier terms of service. Of course 5 GB is eaten up by one high definition film -- and as multi-user households use an ever-increasing array of services, 100 GB is quickly becoming a low ceiling as well.

These more aggressive pricing models are only employed by carriers who operate in uncompetitive markets (Time Warner's caps never appeared in markets where they competed with Verizon FiOS). While the pricing changes are almost always portrayed as an issue of "fairness" targeting a carrier's heaviest users, the changes eventually wind up hitting all of an ISP's subscribers. After these price hikes are portrayed as some sort of altruism, carriers will frequently try to trot out the argument that if they can't overcharge you for bandwidth, the Internet will simply explode (aka the Exaflood), something we've debunked countless times as the product of carrier lobbyists. Of course all of this is going on while the cost of bandwidth and networking hardware drops.

Frontier's timing also isn't particularly smart, given they're exploring this overcharging scheme just as they're trying to gain regulatory approval for their $8.5 billion plan to acquire millions of Verizon DSL and landline customers across fourteen states. Part of that deal involves a few thousand FiOS customers in Washington State, who'll be thrilled to learn that their state-of-the-art fiber to the home connection is about to get much more expensive and much less useful.



Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Anonymous Coward, Apr 16th, 2010 @ 10:43am

    "who'll be thrilled to learn that their state-of-the-art fiber to the home connection is about to get much more expensive and much less useful."

    Wait a minute, who paid for this fiber? Wasn't some of it funded by tax dollars? If so, does this mean that these corporations get their infrastructure funded by tax dollars AND they get a monopoly on it?

     

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    Anonymous Coward, Apr 16th, 2010 @ 10:53am

    "Frontier's timing also isn't particularly smart, given they're exploring this overcharging scheme just as they're trying to gain regulatory approval for their $8.5 billion plan to acquire millions of Verizon DSL and landline customers across fourteen states. Part of that deal involves a few thousand FiOS customers in Washington State, who'll be thrilled to learn that their state-of-the-art fiber to the home connection is about to get much more expensive and much less useful. "

    Makes no difference, I doubt any restrictions will actually apply to policy makers.

     

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  3.  
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    Batman (profile), Apr 16th, 2010 @ 10:59am

    Doesn't seem right somehow....

    Clearly, corporate greed is ruling the day. In a down economy, who da thunk it?

     

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  4.  
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    Chronno S. Trigger (profile), Apr 16th, 2010 @ 11:08am

    Options, options

    I had this conversation with my roommate when we were talking about Verizon possibly capping our connection. He asked why capping is such a bad thing. I responded with this:

    "You know how much data we send from my server upstairs to the PCs down here. Have you ever seen my network bill go up? Have you ever seen a network bill? That's because once the hardware is in place, there's no extra cost per byte. I just have to configure it every now and again and upgrade the hardware if it's too slow."

    I'd guess it's a little harder then that for any ISP, but that's why they have hundreds of thousands of people paying per month.

    Has Google decided where they're going to put in their FiOs?

     

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  5.  
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    BBT, Apr 16th, 2010 @ 11:09am

    Hey, ACs

    pssst

    Washington State is not Washington DC

    the more you know...

     

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  6.  
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    Karl Bode (profile), Apr 16th, 2010 @ 11:37am

    Re: Options, options

    Your roommate is right. And while there are additional costs for an ISP (support, etc.) there's also a lot of ways to make additional money (behavioral redirection ads, selling clickstream data).

    Google hasn't picked a city yet, but I'm guessing it will be someplace that isn't particularly well served by incumbent carriers. Maybe one of Frontier's less competitive markets like in upstate New York?

     

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  7.  
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    Karl Bode (profile), Apr 16th, 2010 @ 11:38am

    Re:

    Even when they impose conditions for these mergers, they tend not to be enforced anyway...

     

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  8.  
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    :Lobo Santo (profile), Apr 16th, 2010 @ 11:47am

    Re: Re: Options, options

    "Google hasn't picked a city yet, but I'm guessing it will be someplace that isn't particularly well served by incumbent carriers"
    Quick, can anybody name a city that IS well served by incumbent carriers?

     

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  9.  
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    TPBer, Apr 16th, 2010 @ 11:55am

    Re: Re: Options, options

    St Louis is one of the test cities, it was all over the local news

     

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  10.  
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    Anonymous Coward, Apr 16th, 2010 @ 12:00pm

    there is no such thing as well served:)

     

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  11.  
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    Anonymous Coward, Apr 16th, 2010 @ 12:10pm

    Re: Doesn't seem right somehow....

    out of curiosity how much stuff do you download "for free" each month that you dont have rights to? personal greed ruling the day, perhaps?

     

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  12.  
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    Anonymous Coward, Apr 16th, 2010 @ 12:11pm

    Re: Options, options

    Ask your friend why this problem only seems to exist in the United States and why other developed countries don't seem to have this problem.

    If anything he will parrot the well refuted "population density" argument, which can then be easily refuted by statistically analyzing the population densities of various U.S. States and comparing their broadband services to the far superior broadband services of (far more or less dense) parts of the world.

     

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  13.  
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    jakerome (profile), Apr 16th, 2010 @ 12:11pm

    Truth in advertising

    I think the simple solution is to require ISPs to advertise their average speed at least as prominently as their "up to" speed in all ads. For example, a 5GB cap comes out to a speedy 18 kbps... that's almost as fast as a top-of-the-line modem from 1995!

     

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  14.  
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    A Steamed Gamer, Apr 16th, 2010 @ 12:20pm

    Re: Re: Doesn't seem right somehow....

    Many of the games available on Steam right now are more than 5GB. Just recently, Steam had a free weekend for Modern Warfare 2... According to their 5GB "fair" bandwidth model, I would have had to pay over $10 for extra bandwidth just to get this "free" game.

     

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  15.  
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    dev, Apr 16th, 2010 @ 12:21pm

    cogeco

    I am paying $1.50/gig over my 60gig bandwidth cap (which includes both up and down). I've been over by 85gigs in some months. I'm going to switch but there isn't a lot of choice.

     

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  16.  
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    Anonymous Coward, Apr 16th, 2010 @ 12:26pm

    Re: cogeco

    Well, until U.S. citizens decide to stand up for their rights and to stand up for decent laws that enable competition we will keep getting scammed. America needs tons of reform.

     

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  17.  
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    Hephaestus (profile), Apr 16th, 2010 @ 12:26pm

    Re: Re: Re: Options, options

    ROFLMAO ...

     

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  18.  
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    DocMenach (profile), Apr 16th, 2010 @ 12:26pm

    Re: Re: Doesn't seem right somehow....

    Well, lets see. Between watching movies and TV shows through streaming on Netflix, TV shows through HULU, and NBA games in HD through the NBA pass I'm looking at somewhere around 150GB per month, all fully authorized and legal.

    You could have just written what you were thinking: "Anyone who uses that much bandwidth must be a pirate and a raporist!" Then your stupidity would have been much more obvious.

     

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  19.  
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    Karl Bode (profile), Apr 16th, 2010 @ 12:31pm

    Re: Re: Options, options

    Well, well, we have "fields and stuff," you know. That's why many of our cities still don't have fiber to the home. Oh wait...

     

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  20.  
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    Danny, Apr 16th, 2010 @ 12:31pm

    Of course 5 GB is eaten up by one high definition film -- and as multi-user households use an ever-increasing array of services, 100 GB is quickly becoming a low ceiling as well.

    Seriously? 5GB's not even enough for enjoying a night of streaming moives over Netflix. I wonder if the people that throw around these numbers actually know how much a GB is...

     

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  21.  
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    Dark Helmet (profile), Apr 16th, 2010 @ 12:31pm

    Re: Re: Options, options

    "Google hasn't picked a city yet"

    True, though I've heard some names that are supposedly heavily in the running, chief among them being Joliet, IL, home of The Blues Bros.

     

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  22.  
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    Karl Bode (profile), Apr 16th, 2010 @ 12:32pm

    Re: Re: Re: Options, options

    Yes I guess I was thinking Google would pick a monopoly market instead of a duopoly one...

     

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  23.  
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    Free Capitalist (profile), Apr 16th, 2010 @ 12:40pm

    Re: Re: Doesn't seem right somehow....

    out of curiosity how much stuff do you download "for free" each month that you dont have rights to? personal greed ruling the day, perhaps?


    I'm about to download an economy of scale and pistol-whip it.

     

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  24.  
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    Designerfx (profile), Apr 16th, 2010 @ 12:41pm

    Re: Re: Doesn't seem right somehow....

    you don't have to have rights to download anything. issue of ethics? absolutely. But the last time I checked, when something was put on a public tracker and downloaded that has nothing to do with rights.

    I don't have rights to a linux ISO, but I downloaded it too.

     

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  25.  
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    Anonymous Coward, Apr 16th, 2010 @ 12:46pm

    Re: Re: Doesn't seem right somehow....

    No one has an inherit right to a monopoly on anything, but everyone has an inherit right to make copies of whatever they wish and to implement any patented idea without paying any royalties to anyone. and everyone is greedy to some extent being that we all want things, it's just that IP maximists are selfish.

     

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  26.  
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    Anonymous Coward, Apr 16th, 2010 @ 12:46pm

    Expensive, but fun easy fix

    My neighborhood is very friendly, and one project that a few of us are working on is running fiber on one side of the street from home to home. Basically, its a daisy chain to connect our servers to share information (the idea came from my kid using a bazooka antenna to get the wireless from his friend two doors down). The bonus of this is that if cable companies do decide to cap our connections, well simply change over to one of us footing the bill for unlimited download and the others will just pay a smaller amount. At the moment, it wont be possible to get it across the street, but wireless might work in that case. Anyway one of my neighbors works for a fiber company and is in the process of purchasing enough fiber to link four homes together and buy the hardware. I already got my nic card. Expensive but we can share anything we want. And since the cable is getting buried in our backyards and under the fence, nobodys going to know. Not sure how its going to work as Im not the network guy. Good way to share huh?

     

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  27.  
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    deadzone (profile), Apr 16th, 2010 @ 12:47pm

    Re: Re: Re: Options, options

    Lafayette, Louisiana.

    It's amazing what happens when the incumbants are faced with a robust municipal FTTH. :) Some of the lowest prices in the country from the incumbants. (At&t and Cox)

     

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  28.  
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    Karl Bode (profile), Apr 16th, 2010 @ 12:58pm

    Re: Re: Re: Re: Options, options

    They tried VERY, VERY hard to prevent that from happening. Lawsuits, weird push polls, etc. But yeah, the pricing there now is very nice -- forced local carriers to drop prices in response. Amazing that whole competition thing...

     

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  29.  
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    Anonymous Coward, Apr 16th, 2010 @ 1:00pm

    Re: Expensive, but fun easy fix

    Unfortunately what you're doing sounds illegal. You better

    A: Ensure it's OK with your city officials

    B: Ensure it's OK with your ISP to share your connection with your neighbors (otherwise you might face a lawsuit. Even if you'll win, lawsuits aren't cheap).

    Not to mention that whoever has the Internet connection in their name and provides bandwidth to others might be held liable for the actions of those others.

    but I do agree, you have an inherit right to create your own network in your neighborhood and share things across your neighborhood. The government really has no business interfering, and they have no inherit right to either, unfortunately, they probably will.

     

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  30.  
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    nasch (profile), Apr 16th, 2010 @ 1:04pm

    Unreasonable?

    As such, many Frontier users don't see speeds above 3 Mbps...

    The letter also informs users that anyone who uses over 5 GB of bandwidth a month is engaging in "unreasonable usage" according to the Frontier terms of service.


    If you consistently get 1 Mbps, that means they consider it unreasonable to use their service for more that 11 hours per MONTH. Or about 20 minutes per day. At higher speeds, you get even less time.

     

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  31.  
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    Anonymous Coward, Apr 16th, 2010 @ 1:07pm

    Re: Expensive, but fun easy fix

    Anyways, it would be nice if you can create a website informing everyone of the legal problems that you have to put up with to create your own network in your neighborhood. If you have problems maybe techdirt can announce them and at least this would serve as documented evidence to the fact that it's the legal system, and nothing else, that interferes with our ability to create a high speed widespread communication channel.

    At the moment the main obstacles that we should focus on are the legal obstacles because those are the main obstacles that are preventing communities and America from creating decent broadband and cable services for a decent price. It's nice that your community intends to organize to create a better information communication structure but it would be meaningless if they completely ignore the legal ramifications and have their innovative initiatives destroyed as a result. What America really needs to focus on is developing more organized opposition to the status quo and the laws in place that hinder innovation.

     

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  32.  
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    Rekrul, Apr 16th, 2010 @ 1:27pm

    The one question that never seems to get asked enough in these cases is; Why is the ISP selling bandwidth that it doesn't have?

    Their propaganda makes it sound as if heavy users can magically tie up the entire network and use all the bandwidth that's available, however that ignores the fact that they can't use more bandwidth than their account is provisioned for. If they have a 3Mbit account, that's as much bandwidth as they can use. If they're using "too much", it's because the ISP has provided them with "too much".

    It's like a buffet restaurant advertising a 200 person capacity, but only buying enough food for 100 people and then complaining when they start running out.

    ISPs advertising accounts with bandwidth that they can't support should be charged with false advertising. They should be forced to either provide the bandwidth that they actually advertised, or to reduce the accounts that they offer to speeds that they can actually support.

    Of course some people will trot out the idea that advertising what they can't deliver is technically legal because the fine print says that the speeds are "up to" that amount and that they can't guarantee any set speed. To those people I would say to have a look at the FTC's documents on false advertising. Any ad that intentionally conveys a false impression or that hides the restrictions in non-obvious fine print, can be considered false advertising if a reasonably intelligent person were to be fooled by it. Since most of the general public doesn't know much about the details of network operations, any ISP ad that appears to offer unlimited service at a certain speed, but which actually has various restrictions and slower speeds, would almost certainly qualify as false advertising.

     

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  33.  
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    AnonCow, Apr 16th, 2010 @ 1:49pm

    The group in this whole issue that have, so far, escaped blame is the politicians that locked their constituents into onerous, long-term, competition stifling, monopoly contracts with these companies in exchange for massive campaign contributions.

    I'll bet that if you ran an analysis you would find that the major cities with the slowest broadband also have the highest per capita contribution from the city-sanctioned broadband monopoly holder.

     

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  34.  
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    ChronoFish (profile), Apr 16th, 2010 @ 1:58pm

    Time for PBiNet

    (Public Broadcasting Internet)

    Why not start a not-for-profit (not to be confused with a non-profit) internet (small i).

    Take a look at the current coverage of free hot spots (http://www.skyhookwireless.com/howitworks/coverage.php). Why not build a service that utilizes these hotspots - and let 802.11(a,b,g,n,x) be the backbone rather than landlines.

    I'm up for sharing and broadcasting in a mesh network.... anyone else? Kind of like an Amateur Radio network....

    Thoughts?
    -CF

     

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  35.  
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    Anonymous Coward, Apr 16th, 2010 @ 2:13pm

    Re: Time for PBiNet

    In terms of wireless, the FCC limits signal strength for WiFi devices which makes these sorts of things very difficult to implement. You'll need FCC permission to circumvent these restrictions, and since the FCC is ran by corporate lobbyists good luck with that.

     

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  36.  
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    btrussell (profile), Apr 16th, 2010 @ 2:30pm

    Re: cogeco

    http://www.cogeco.ca/cable/on/en/residential/internet/hsi/explore_hsi.html

    You can double your limit for another $40.

    That is much less than $1.50 X 85

     

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  37.  
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    Derek Kerton (profile), Apr 16th, 2010 @ 2:51pm

    Re: Re: Re: Doesn't seem right somehow....

    Wow, you're a heavy user. All legit, but heavy.

    Would you agree that you should pay more to your ISP than a person who only does email and web browser?

    (Not the aforementioned Frontier overage charges, but more?)

     

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  38.  
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    Derek Kerton (profile), Apr 16th, 2010 @ 2:56pm

    Re: Re: Re: Options, options

    Odd, since Google has just received all the RFI responses, and has barely started the selection process:

    http://www.google.com/appserve/fiberrfi/

     

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  39.  
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    Derek Kerton (profile), Apr 16th, 2010 @ 3:01pm

    Re: Truth in advertising

    Why? Does anybody use their Internet that way? Why confuse consumers with information that is not only technically abstract, but isn't how they consume? That particular data point is better understood as a 5GB cap than as 18kbps/mo.

    A better execution of your idea would be a standard information chart that all ISPs must use to disclose their service, much like the Schumer Box credit cards must show.

    The box should show the max speed, min speed, throughput cap, and the 'average actual max speed' the users get on a given plan.

     

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  40.  
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    Anonymous Coward, Apr 16th, 2010 @ 3:16pm

    Re: Re: Re: Re: Doesn't seem right somehow....

    "Would you agree that you should pay more to your ISP than a person who only does email and web browser?"

    uhm... People who have heavier bandwidth needs already pay more. You already pay more for a faster connection.

    I don't mind these caps provided there is free competition and the government doesn't restrict competition. They currently do. In the case of free competition, though, if someone restricts bandwidth I will simply switch to a competitor and the end results will be that few will do anything to restrict bandwidth.

     

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  41.  
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    Anonymous Coward, Apr 16th, 2010 @ 3:18pm

    Re: Re: Truth in advertising

    "That particular data point is better understood as a 5GB cap than as 18kbps/mo."

    The point is that it amounts to 18KBpS which is prehistoric in terms of bandwidth capabilities. It's preposterous in terms of bandwidth usage and it merely exemplifies the need for actual competition in America instead of a broken legal system that restricts competition and causes America to fall behind everyone else as a result.

     

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  42.  
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    Anonymous Coward, Apr 16th, 2010 @ 3:22pm

    Re: Re: Truth in advertising

    "That particular data point is better understood as a 5GB cap than as 18kbps/mo."

    If you are given speeds of 100Mb/sec but you are only allowed to download 1 MB/min what does that effectively amount to? 1MB/min, not 100 MB/sec.

    In the long term, the effect is the same, you can only get 18kbs on a monthly basis. That's absolutely ridiculous.

     

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  43.  
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    Anonymous Coward, Apr 16th, 2010 @ 3:23pm

    Re: Re: Re: Truth in advertising

    errr... not 100Mb/sec *

     

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  44.  
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    Derek Kerton (profile), Apr 16th, 2010 @ 3:30pm

    Re:

    "The one question that never seems to get asked enough in these cases is; Why is the ISP selling bandwidth that it doesn't have?"

    Every telecommunication provider must build their network capacity based on statistical forecasts of expected use, and peak use.

    Every telco then sells a user a "best effort", "up to" data plan. You may get up to the stated speed, but if there is contention (ie at peak times, many people contend for the same capacity) then you will get less.

    Networks are NOT built such that each user can use their maximum speed concurrently. To do so would be a tremendous waste, and the bandwidth would sit unused much of the day.

    Be careful what you wish for: If this did happen, we all would be paying business-type rates which are around $300 for 1.5Mbps/1.5Mbps guaranteed service.

    Dude, the above isn't "the telcos out to get ya". It is a mix of basic science, business, and good sense. Expected use models are how networks are built, and will be for the foreseeable future.

    The problem occurs when two different things happen that don't fit with the above natural logic:

    1) Telco and ISP marketing departments overstate what they offer, miseducate the consumer, and claim "unlimited" service.

    2) Consumers prefer everything free, want to increase their use but not pay more, and believed the (1) marketing BS from the ISPs.

    And to show I'm not just making the science up, have a read...
    For reference, the top academic link below does a pretty good job of explaining it in as basic a way as possible. You only need to read the abstract and the intro to get the gist of the importance of trading off capacity with costs.

    http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.41.9762&rep=rep1&type=pdf
    http://userstudy.com/papers/LON_TPRC_092799F.pdf
    http://mitsloan.mit.edu/research/clockspeed/Econ omic_Analysis_of_Telecom__1.doc
    http://en.wikipedia.org/wiki/Telecommunications_forecasting

     

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  45.  
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    Derek Kerton (profile), Apr 16th, 2010 @ 3:38pm

    Re: Time for PBiNet

    Sorry, but you don't understand what Skyhook is or what they do.

    The Skyhook coverage map does not show free hot spots. In fact, it doesn't even show public hotspots. What it does show, is every wireless access point that Skyhook has sniffed the SSID and MAC address of, and mapped that to a latitude and longitude for augmenting the accuracy of GPS in mobile devices. Skyhook actually drives the roads in a WiFi antenna laden car to map these APs.

    The iPhone, for example, uses Skyhook to locate itself by sniffing a nearby AP MAC address, sending it to the Skyhook servers (over AT&T, not the wifi), and getting a Lat/lon in response.

    Some of those may be free, but that is not what the map is showing. It shows every WiFi AP in their database.

    For your public Internet idea, do you know Fon?
    http://www.fon.com/en/

     

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  46.  
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    Greevar (profile), Apr 16th, 2010 @ 3:50pm

    Re: Unreasonable?

    Yeah, it appears that they think people still only use the internet for online shopping and email.

     

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  47.  
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    Stuart, Apr 16th, 2010 @ 4:28pm

    Re:

    Welcome to to the US.

     

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  48.  
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    Anonymous Coward, Apr 16th, 2010 @ 4:31pm

    Re: Re: Time for PBiNet

    So what if I move my router, wouldn't that mess up their results?

     

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  49.  
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    Anonymous Coward, Apr 16th, 2010 @ 4:36pm

    Re: Re:

    "Be careful what you wish for: If this did happen, we all would be paying business-type rates which are around $300 for 1.5Mbps/1.5Mbps guaranteed service."

    and if the government opened things up to competition we would have much more bandwidth (higher speeds and fewer caps, like they have in other countries) at a lower price.

    "Dude, the above isn't "the telcos out to get ya"."

    The fact that they demand monopoly power is evidence that they're out to rip me off. If they didn't get anything in return for their monopoly power then why lobby for it? They lobby for it because they get something in return and what they get in return is at the consumer's expense.

     

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    Anonymous Coward, Apr 16th, 2010 @ 4:44pm

    Re: Re:

    "2) Consumers prefer everything free"

    No, it's that consumers don't want to be ripped off, what we want is free competition and consumers understand that the cableco/telco companies do not deserve and are not owed government restrictions on competition. The consumers aren't the bad guys, the selfish telco/cableco companies that demand the government restrict competition are the bad guys. The public understand that it has a right to build new infrastructure that competes with incumbents and that public property shouldn't be used to store the property of private entities and subsequently allow those private entities to monopolize the use of such property. The public understand that cable companies have no right to restrict competition just because they lobby the most.

    and you prefer the air you breath for free, why don't you pay me for that air you breath.

     

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    Anonymous Coward, Apr 16th, 2010 @ 4:50pm

    Re: Re: Re:

    and not to mention the cableco/telco companies prefer their unearned monopoly rents for free. Sure, they pay something (ie: in lobbying, campaign contributions, and they pay for rights of way), but they prefer their monopoly rents for free and in as much as the cable companies pay for their monopolies, consumers pay more for bandwidth (after all, it's the consumers that fund what the cable companies pay for their monopolies and then the consumers fund their profits).

    So, in effect, the cable companies are getting these monopolies for free, just like they want. The consumer funds the lobbying, campaign contributions, and money necessary to buy underpriced rights of ways (they would pay more had the property been privately owned) and then the consumer funds the profits that these cableco/telco companies gain from these monopolies.

     

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    Anonymous Coward, Apr 16th, 2010 @ 5:28pm

    Re: Re: Re: Re: Doesn't seem right somehow....

    "Would you agree that you should pay more to your ISP than a person who only does email and web browser?"

    If someone is using the bandwidth during non peak times they are not unreasonably hindering anyone else's bandwidth much and so the ISP can afford to allow them to use said bandwidth being that it doesn't cost much extra.

    and during peak times, the ISP can simply slow down everyone's bandwidth to compensate for greater overall use. The person who uses his bandwidth during non peak times can just as well use it during peak times, just with lower speeds like everyone else, but the fact that someone used it during non peak hours doesn't really affect anyone's use during peak hours.

    So I don't really have a problem with someone who uses it more paying the same as someone who uses it less, being that, in a sense, everyone has an equal right to it at any given time and someones usage at one time doesn't really affect anyone else's usage at other times.

    but in a FREE market (this is key, we currently do not have a free market, we have a market where the government restricts competition) I also don't have a problem with internet service providers charging different customers different amounts of money based on their desired bandwidth speeds and usage.

     

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    JoeMama, Apr 16th, 2010 @ 11:28pm

    This is like the AMT (Alternative Minimum Tax). Initially meant to hit only the wealthy, it will consume us all one day soon.

     

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    Niall (profile), Apr 17th, 2010 @ 5:38am

    Re: Re: Re: Re: Doesn't seem right somehow....

    In the UK, we pay a yearly tax to have access to the roads. Mostly we all pay generally the same, although in recent years it has moved away from some small variation with engine size and now factors in levels of polluting. Even so, it is broadly similar, and for two owners of an identical car, they are paying the same money. However, one of these drivers might only drive 2000 miles a year, and the other 24,000 miles, but they both pay the same. Similarly, one might drive more at peak periods when they help to snarl up the roads more, while the other may mostly drive at quieter times, when they have less impact on other road users.

    (And yes I know this is leaving out the more indirect but fairer taxing via fuel duties.)

    Most people see this as fair - you have equal rights to use the road, it's down to luck or timing how clear the roads are, but otherwise you pay the same. Lots of businesses work by charging users similar amounts for differing usage needs (whilst balancing it elsewhere), such as the insurance industry. So it's not unreasonable to have people paying broadly similar amounts - and a lot of the annoyance in the US seems to centre arround the total lack of competition and the ridiculous prices charged for riduculously low broadband speeds/amounts. Truly a third-world service! Even former Eastern European countries have much better services...

     

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    Anonymous Coward, Apr 17th, 2010 @ 7:23am

    Re: Re: Doesn't seem right somehow....

    Troll.

     

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    Anonymous Coward, Apr 17th, 2010 @ 7:30am

    Re: Re:

    2) Consumers prefer everything free, want to increase their use but not pay more, and believed the (1) marketing BS from the ISPs.

    You, uh... you DO realize WE ALREADY PAID FOR THIS, right?

    A few billion dollars of tax payer money got sunk into supposed "network development" -- so if anything, they owe US money.

    Get out of here with your ignorant blithering and/or astroturfing.

     

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    hxa, Apr 17th, 2010 @ 7:34am

    Re: Options, options

    The network is a limited resource: it has to be shared carefully -- i.e. paid for and allocated competitively.

    If there is overcapacity, then of course everyone can use as much as they want. But capacity costs money, so the ISPs aren't going to pay for more than they need -- what can be covered by subscriptions and what is sufficient for users. Overall, the average subscription fee has to pay for the average usage.

    If an ISP had super overcapacity, all their users would be paying more than they needed to. Most users -- who don't use much -- would be sensible to go elsewhere and pay less.

    I am not saying I like usage caps/pricing, but it is the economic reality given the current network infrastructure etc.

     

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    hxa, Apr 17th, 2010 @ 7:38am

    Re: Re: Options, options

    I'm not sure if I am sorry or glad to inform you, but usage caps are standard in Europe. 5GB is low but not unusual. Generally, the more transfer allowance, the higher the price.

     

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    hxa, Apr 17th, 2010 @ 7:50am

    Re: Truth in advertising

    Speed and transfer allowance are very different things usage-wise. A light user can watch a couple of TV programs a week on 5GB allowance, but I don't know what kind of video could be streamed at 18kbps. You need to know the transfer allowance so you can see how much you have left for the rest of the month. Converting it into a notional rate is not very useful.

     

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    Anonymous Coward, Apr 17th, 2010 @ 11:08am

    Re: Re: Doesn't seem right somehow....

    All of it.

     

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    Rekrul, Apr 17th, 2010 @ 2:06pm

    Re: Re:

    Every telecommunication provider must build their network capacity based on statistical forecasts of expected use, and peak use.

    Every telco then sells a user a "best effort", "up to" data plan. You may get up to the stated speed, but if there is contention (ie at peak times, many people contend for the same capacity) then you will get less.

    Networks are NOT built such that each user can use their maximum speed concurrently. To do so would be a tremendous waste, and the bandwidth would sit unused much of the day.


    That might apply when the network is first built, but what about now? As far as I know, the ISPs are still making a profit, not losing money. So if they claim they're running out of bandwidth, they now have detailed statistics of how much bandwidth they actually need and can upgrade their network to that level. Then the customers are happy, there's no more bandwidth problems and while the company is out the money for the upgrade, they'll make it back. Happy customers are loyal customers.

    Unfortunately what happens is that every time ISPs upgrade their networks to a level that can handle their currently load, they immediately start offering faster accounts, selling bandwidth that they don't have.

    I have a 6Mbit account with AT&T U-Verse. In AT&T's usage capping trials, the limit for 6Mbit accounts was 80GB a month. So in effect, they're saying that their network can't handle 6Mbit users using their accounts. Why then did they turn around and offer an 18Mbit account? If bandwidth is so tight that they have to limit 6Mbit users, where are they magically getting the bandwidth to offer 18Mbit accounts?

    If ISPs ran your local grocery store, They'd only order 30 of each item and every customer would only be allowed to buy 1 of each.

     

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    Anonymous Coward, Apr 17th, 2010 @ 11:31pm

    Re: Re: Options, options

    "would be sensible to go elsewhere and pay less."

    News flash, the government restricts competition.

    "but it is the economic reality given the current network infrastructure etc."

    So lets change the economic reality and the current network infrastructure by allowing the introduction of competition.

     

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    Kaotik4266 (profile), Apr 18th, 2010 @ 2:28pm

    You want bad broadband plans at stupidly high prices? Come to Australia.
    http://www.bigpond.com/internet/plans/adsl/plans-and-offers/
    That's Telstra Bigpond's list of plans and it's really hard for anyone to provide significant competition because they almost exclusively have to rent from Telstra!

     

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    TechNoFear (profile), Apr 18th, 2010 @ 10:29pm

    Got to read Telstra's fine print to see how bad it is

    Note that;

    Data is counted for both up and down.
    Extra data is Au$150/Gb! (capped at Au$300)
    Some accounts 'shape' once the cap is reached (slowing you to 64Kbit/sec or dial-up speed).
    Min term is 12 months and early exit is Au$360 pro rata.
    That you have to have voice services with Telstra to pay the lower prices (change check box above prices).

    Also note that there is no minimum speed requirement or legisltation/protection.
    I have had a fault on my line (8Km from a state capital's CBD) for the last 4 years that slows me to a max speed of 1500Kbs (Telstra has refused to repair the fault, even if I pay).
    Because I need to send data (faster than 256Kbit/s) I have to pay for a ADSL2+ connection (up to 20% extra).

    The funny part is that these are Telstra's recent NEW IMPROVED prices!

     

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    Kaotik4266 (profile), Apr 19th, 2010 @ 12:38am

    Re: Got to read Telstra's fine print to see how bad it is

    Yeah, up until a few years ago I had a plan with Bigpond (quite an old one, granted) for 256/64kbps, 12GB/month at $59.95 per month! And that plan was called something like "Liberty-unlimited". Yeah. So I switched to Internode. A very good move! That said, by American standards it's still shocking...

     

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    Derek Kerton (profile), Apr 19th, 2010 @ 3:38pm

    Re: Re: Re: Time for PBiNet

    Yes.

    Once their system notices the anomaly, they have algorithms and processes to ignore that data point, unless they can re-validate it at a new location.

     

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    Derek Kerton (profile), Apr 19th, 2010 @ 3:42pm

    Re: Re: Re:

    Why switch the topic?

    I agree that we need more competition in the US telecom space, I agree that the incumbents want to retain as much market power as they can.

    So what does that have to do with "Every telecommunication provider must build their network capacity based on statistical forecasts of expected use, and peak use."

    That's EVERY telecom provider, from AT&T, to Wanadoo, to China Unicom, to your company's IT guy on his LAN.

     

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    Derek Kerton (profile), Apr 19th, 2010 @ 3:45pm

    Re: Re: Re: Re:

    Have you said anything in there that refutes "2) Consumers prefer everything free"?

    I sure couldn't find it. And yet you contest a fairly obvious statement. You rant at the ISPs, sure, OK. Relevance? Don't let your (possibly valid) hatred of the telco oligopolies cloud your common sense.

     

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    Derek Kerton (profile), Apr 19th, 2010 @ 3:50pm

    Re: Re: Re:

    Learn to differentiate astroturfing with simple reasoning, from a neutral perspective.

    If I were astroturfing, I would come off as a fair bit more pro-incumbent. If you think an astroturfer would write: "1) Telco and ISP marketing departments overstate what they offer, miseducate the consumer, and claim "unlimited" service." then you are not very clever.

    Just accept some reality. Consumers always want more for less. There is no good nor bad in it. It just IS. A lot of economics is based on that simple notion. You guys are funny trying to blame me for writing it down.

     

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    Derek Kerton (profile), Apr 19th, 2010 @ 4:04pm

    Re: Re: Re:

    I'm with you for your first paragraph.

    And can answer:
    "Why then did they turn around and offer an 18Mbit account? If bandwidth is so tight that they have to limit 6Mbit users, where are they magically getting the bandwidth to offer 18Mbit accounts?"

    You are talking about two different things as if they were the same, peak speed and throughput. It's like comparing number of miles driven with top speed. Your state probably limits your top speed, but not your number of miles driven per month - they can address them separately because they are different metrics.

    I don't know how well your Uverse works, but if you pay for 6Gbps and can get that speed when you want to move data, it seems they CAN deliver 6Mbps. If they limit you to 80GB throughput, then that speaks to the throughput you buy.

    Perhaps one of the reasons they can deliver 6Gbps or 18Gbps is *because* they have a throughput cap. Their statistical models indicate that if customers consume within their caps, they can deliver the required speeds x% of the time.

    And since people seem to think I'm a telco shill, let me explicitly say there isn't enough competition in US ISPs, which drives up prices. But I haven't written that over and over in the comments above, because it's irrelevant to the fact that telcos MUST oversell capacity using statistical models, because that is the only way any telecom business makes sense with current technology.

     

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    Derek Kerton (profile), Apr 19th, 2010 @ 4:16pm

    Re: Re: Re: Re: Truth in advertising

    Balderdash.

    Using the common scenario of the proverbial gramma that just looks at a few web pages and does email, and gets a few photos from the kids each month, there is a very real difference between 18Kbps and a 5GB cap.

    This person will enjoy a snappy internet experience all the way up to their cap. Many people would never hit a 5GB cap.

    That said, many people would hit a 5GB cap, so I'm not saying such a low cap is "right". I'm just pointing out what should be obvious, and that is you don't describe a cap as a throughput that assumes steady 24/7 consumption, when that is NOT how the Internet is commonly used.

     

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    Derek Kerton (profile), Apr 19th, 2010 @ 4:29pm

    Re: Re: Re: Re: Re: Doesn't seem right somehow....

    When I ask the question:

    "Would you agree that you should pay more to your ISP than a person who only does email and web browser?"

    and you answer:

    "uhm... People who have heavier bandwidth needs already pay more. You already pay more for a faster connection."

    Why do you assume that? Do you not think that a lot of those people pay the same as you today? And why does everyone I am debating with on this thread keep assuming that speed and throughput are the same thing? They are different. They could be sold as different metrics in a broadband plan.

    And I agree with you that we don't have adequate competition. Competition would make all of these discussions, and net neutrality moot, as the market would sort out the correct pricing and plans. Without that, we can only speculate on what would be fair/right.

     

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    Derek Kerton (profile), Apr 19th, 2010 @ 4:33pm

    Re: Re: Re: Re: Re: Doesn't seem right somehow....

    Agreed.

     

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    Derek Kerton (profile), Apr 19th, 2010 @ 4:45pm

    Re: Re: Re: Re: Re: Doesn't seem right somehow....

    Yeah, but isn't that because it's historically been hard to charge different amounts for different users. As we get ways to charge different amounts, we do - or rather the market supports it.

    And in fact, there are many examples, primarily on your side of the pond, where there are pay-for-increased-use models for road-space consumption:
    - many toll roads, especially freeways
    - London's Congestion Charge Zone
    - Very high fuel taxes, as you noted
    - safety cameras (pay for speed, very common chez vous)

    and you mention insurance companies. Well, every one I've ever had in the US and Canada has asked me how many miles I'll be driving per year before they bid my price.

    I think your analogy more supports MY point that while people can start from a similar base price, it's fair enough that increased use leads to increased payment.

     

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    Rekrul, Apr 20th, 2010 @ 5:16pm

    Re: Re: Re: Re:

    You are talking about two different things as if they were the same, peak speed and throughput. It's like comparing number of miles driven with top speed. Your state probably limits your top speed, but not your number of miles driven per month - they can address them separately because they are different metrics.

    They may be two different things, but they are inexorably linked. Top Speed x Given Time Period = Maximum Throughput. In your analogy, the top speed set by the state does limit the number of miles you can drive in a month. Unless you're breaking the law and driving faster than the limit (not possible with internet accounts), there's no way to exceed X amount of miles. Sure, you could drive to another state, but then you would be limited by the top speed that they impose.

    Reduce the speed and the maximum possible throughput also drops. Increase the speed and the maximum possible throughput rises.

    Each account an ISP sells already has a built-in usage cap. That usage cap is; Speed x Month = Throughput.

    ISPs are selling accounts that have X amount of throughput (based on their speed) and then saying "We can't support the account we sold you, so we're imposing a lower, artificial throughput cap."

    I don't know how well your Uverse works, but if you pay for 6Gbps and can get that speed when you want to move data, it seems they CAN deliver 6Mbps.

    It seems to work quite well for me and I can get those speeds. My friend had a completely different experience with it in his town though.

    If they limit you to 80GB throughput, then that speaks to the throughput you buy.

    So far, they've only imposed those limits in a couple cities on a trial basis. Which is corporate speak for "We're testing to see how loudly our customers will complain when we eventually impose this nation-wide."

    Perhaps one of the reasons they can deliver 6Gbps or 18Gbps is *because* they have a throughput cap. Their statistical models indicate that if customers consume within their caps, they can deliver the required speeds x% of the time.

    A 6Mbit account, working at top speed, will take approximately 37 hours to transfer 80GB. Which means that with an 80GB throughput limit, users can only use their accounts at the stated capacity for about 1.25 hours a day. Or they can spend a day and a half transferring data non-stop.

    I don't know about you, but that seems pretty deceptive to me. When an ad promises speeds "up to" a certain number, it's normally understood that the company will do its best to deliver that speed, but might not be able to due to factors beyond their control. Nobody reads such an ad and assumes that the reason they won't be able to use that level of speed all the time is because the ISP will intentionally limit their ability to do so. That's like a store advertising a sale with a limit of "up to" five of each item and then telling customers that they're only allowed to buy two even though there's a whole pile of them. Technically, the ad is true, but I doubt you'll find a single person who wouldn't feel ripped off by such a tactic.

    People pay for faster accounts not to make web pages load faster or to download photos of their grandkids. They pay for such accounts because they want to be able to quickly transfer data. Be it illegal downloads from a file sharing network, or streaming movies from NetFlix. The throughput limits that ISPs are imposing, make doing these things impractical. They know that users are enticed by the promise of faster speed, but then they impose limits that will prevent the users from using that speed for the very purposes for which they decided to buy the account for.

    If that isn't a classic bait and switch scam, I don't know what is.

    And since people seem to think I'm a telco shill, let me explicitly say there isn't enough competition in US ISPs, which drives up prices. But I haven't written that over and over in the comments above, because it's irrelevant to the fact that telcos MUST oversell capacity using statistical models, because that is the only way any telecom business makes sense with current technology.

    The problem is that ISPs are allowed to continue doing this over and over and over. Once the required capacity to support a given level of service is known, why don't ISPs upgrade their networks to be able to provide that level of service? Instead, each network upgrade is accompanied by the offer of even faster speeds, which the company oversells, constantly extending the problem, rather than fixing it.

    In what other business is a company allowed to consistently oversell the item or service that they provide? Can a mail order company take your money for four copies of an item and then send you only two because they're running low and have to impose limits? Can a painting company quit after painting only half your house because it claims that it's taking too long to paint the trim? If you sign a contract with someone to cut your lawn once a week, can that person just skip doing it some weeks because your yard is bigger than most and he says that it uses up too much gas?

    Then why are ISPs allowed to oversell their service? And even if it makes sense at first, why are they allowed to continue to do so, rather than upgrading their network to realistically support what they offer?

     

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    thomas, Apr 22nd, 2010 @ 9:44am

    Capitalistic Pigs

    All hail Capitalism, right?

     

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    Anonymous Coward, Apr 22nd, 2010 @ 9:59am

    Re: Expensive, but fun easy fix

    You better read the fine print on your ISP contract.
    It's illegal to share your internet connection with your neighbors.

     

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    Derek Kerton (profile), Apr 22nd, 2010 @ 5:31pm

    Re: Re: Re: Re: Re:

    "In what other business is a company allowed to consistently oversell the item or service that they provide"

    I bought a bicycle that I can ride 30mph. But I only ride it twice a month, and at 15mph. Do I complain to the bike maker?

    I paid $75 for a ski lift ticket for the whole day, but quit at 2PM. Do I complain? Do I get a refund for the last 2 hours?

    I bought access to an unlimited buffet, but was limited to the amount I actually wanted to eat. Was the buffet really unlimited? In fact, those jerks didn't even have infinity food at my disposal, should I have wanted it.

    Porsche sells cars that can do 190mph. But they can't go that fast non stop. They need to fuel up occasionally, get maintenance, and eventually break down. Do you complain about that?

    Nope, because, like the case of ISPs, that's JUST NOT HOW THE PRODUCT IS USED. You keep talking about how you might want to use your full bandwidth speed all month long, but you don't. People use it different amounts. So it makes sense that the ISP could sell different plans based on those different amounts.

    For those people that DO want their full bandwidth 24/7, they are not in the market for consumer broadband. A guaranteed, constant bandwidth connection is what is called a "leased line" or a T1. It is a business-class service, and is available in a much more competitive market than home broadband...and is much more expensive.

    Believe me, you don't want what you are asking for. The main reason consumer broadband can be so much cheaper than business-grade is that the ISP has the knowledge (based in a statistical model AND on observation of reality) that people don't consume their full bandwidth all the time. Thus, they can re-sell existing capacity multiple times on a best-effort basis.

    If it sounds evil, it isn't. It's just network planning using limited resources. Just go to your IT guy, and ask him how he designs HIS LAN at work. There are many, many similarities, although his statistical models just may be "gut checks". He, too, will build a network with the sensible assumption that not each node will be using it's full speed at any given time.

    Speed of connection and monthly throughput are two different things. Two different metrics. Insisting that they be considered as the same thing is not logical.

     

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    Anonymous Coward, Apr 22nd, 2010 @ 10:50pm

    Re: Re: Re: Options, options

    I have no complaints about the offering available in my area (NY metro area) where Verizon FiOS is competing with Cablevision Optimum Online. FiOS has 25/25, 35/35, 50/20 tiers (down/up, all in Mbps). Cablevision has 16/2, 30/5, 100/15. No caps for either. I personally have the FiOS 25/25Mbps Internet in a bundle with Extreme HD TV and phone for ~$101.95 per month with all taxes/fees included.

     

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    Rekrul, Apr 27th, 2010 @ 8:06am

    Re: Re: Re: Re: Re: Re:

    Damn, I thought I had replied to this...

    I bought a bicycle that I can ride 30mph. But I only ride it twice a month, and at 15mph. Do I complain to the bike maker?

    I paid $75 for a ski lift ticket for the whole day, but quit at 2PM. Do I complain? Do I get a refund for the last 2 hours?

    I bought access to an unlimited buffet, but was limited to the amount I actually wanted to eat. Was the buffet really unlimited? In fact, those jerks didn't even have infinity food at my disposal, should I have wanted it.


    All of the above examples are self-imposed limitations, not limitations imposed by the businesses.

    If you paid $75 for an all-day ski lift ticket, can they kick you out at 2PM because you're "hogging the lift"?

    Porsche sells cars that can do 190mph. But they can't go that fast non stop. They need to fuel up occasionally, get maintenance, and eventually break down. Do you complain about that?

    That's a practical limitation, not a company imposed one. Once you buy the car, you're free to use it at the top speed that the law allows. If there's a race track where you can run it at full speed, you're perfectly free to run it flat out until you can no longer afford to buy gas for it. Nobody from the company is going to show up and claim that you're using your car too much, or going too fast with it.

    You keep talking about how you might want to use your full bandwidth speed all month long, but you don't. People use it different amounts. So it makes sense that the ISP could sell different plans based on those different amounts.

    I've downloaded at least 300GB in the last two weeks.

    For those people that DO want their full bandwidth 24/7, they are not in the market for consumer broadband. A guaranteed, constant bandwidth connection is what is called a "leased line" or a T1. It is a business-class service, and is available in a much more competitive market than home broadband...and is much more expensive.

    Tell me this; Exactly what do the ISPs think consumers are going to use a 6-15Mbit internet account for? Do they actually think that people today will pay $30-50 a month just to watch videos on YouTube, or to occasionally download a couple of songs? What purpose does a fast internet account serve, if not to download large amounts of data?

    Believe me, you don't want what you are asking for. The main reason consumer broadband can be so much cheaper than business-grade is that the ISP has the knowledge (based in a statistical model AND on observation of reality) that people don't consume their full bandwidth all the time. Thus, they can re-sell existing capacity multiple times on a best-effort basis.

    And when that existing capacity proves to be insufficient, they impose limits rather than upgrading capacity to match actual usage.

    If it sounds evil, it isn't. It's just network planning using limited resources. Just go to your IT guy, and ask him how he designs HIS LAN at work. There are many, many similarities, although his statistical models just may be "gut checks". He, too, will build a network with the sensible assumption that not each node will be using it's full speed at any given time.

    What happens when his "gut" turns out to be wrong and the network can't handle all the traffic that the users are putting through it. Does he simply start imposing limits on all the users, or does he upgrade the network to handle the amount of traffic that he now knows it will be used for?

    Speed of connection and monthly throughput are two different things. Two different metrics. Insisting that they be considered as the same thing is not logical.

    Not the same, but connected.

    Limit speed and you limit maximum throughput. Raise the speed and you raise the maximum throughput. It's that simple.

    Nobody buys a faster account thinking "Gee, with this new $65 a month account, I'll get done in half the time." They think "Gee, with this new new $65 a month account, I can download twice as much."

    Are you honestly telling me that ISPs are too stupid to realize this?

     

    reply to this | link to this | view in thread ]

  81.  
    identicon
    That Wierd guy, Jul 27th, 2010 @ 7:27pm

    Spoke with pioneer about the 5GB limit

    Being in Indiana which just switched over to this company I called them today 6/27/2010 and asked if the 5GB limit on the dll rate using fios was being put into affect to see if I would be charged per GB extra seeing as I dll and upload roughly 1-2 Terabytes per month, the response was plain flat out no. Got my first bill today from them and I wasn't charged for that at all so I think that we can rest easy.... for now. If this is put into effect I would most certainly be canceling service with refusal to pay the extra. I encourage other people to do the same thing if something like this does go into effect especially if your paying for something like the 25Mbit up and down ratio.

     

    reply to this | link to this | view in thread ]

  82.  
    identicon
    FTR, Jan 28th, 2012 @ 7:47am

    Frontier is 10X better than the other telcos, sure their standalone runs $50 a month or so including the wireless modem, but they have dsl w/ a phone line where the dsl is only 14.99 or $20 p/mo, leaving you with a total bill (including phone and modem) of 30-40 + taxes

     

    reply to this | link to this | view in thread ]


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