Time To Face Facts: Broadband Caps Are Really About Protecting Video Revenue

from the not-about-bandwidth-hogs dept

As various broadband providers drool over the idea of implementing broadband caps, they've mainly focused on the claim that they're doing so to make "bandwidth hogs" pay "their fair share." Sometimes they sprinkle this with claims of poverty over having to provide unlimited access to people who actually use it a lot. Of course, none of this is true. The various metered broadband plans almost always end up increasing everyone's bills, and there's little to no evidence that bandwidth hogs are a problem, either technologically or economically speaking.

For the most part, broadband caps are really about protecting video revenue. Many broadband providers these days also provide television, and that business is a total racket these days, with TV companies rolling in cash. Internet TV breaks up the artificial monopolies and the monopoly rents they can extract, so the last thing the broadband (and TV) providers want to do is make it easier for consumers to route around their television programming and access it directly on the internet.

As if to highlight that very point, Canadian telco giant Rogers decreased its already very, very low broadband caps just as Netflix announced that its streaming service was coming to Canada. The timing may be slightly coincidental, but it certainly highlights the point. Rogers doesn't want you streaming videos on Netflix if it means you might not watch Rogers' own TV programming.


Reader Comments (rss)

(Flattened / Threaded)

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    crade (profile), Jul 23rd, 2010 @ 11:58am

    If you don't want to provide unlimited access, then don't.
    As long as they don't claim to, who is forcing them to provide unlimited access? Just sell restricted internet access instead and let us choose someone else for our internet.

     

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      Kingster (profile), Jul 23rd, 2010 @ 1:14pm

      Re:

      All of the big providers have caps looking at the sections under http://www.allisp.info/canada/index.php ...

      Looks like Bell is the chintziest with a whopping 1GB total activity for $20/month??? WTF??? My DNS requests total more than 1GB.

      I guess I'm glad I don't live THERE.

       

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        Migzy, Jul 24th, 2010 @ 2:48pm

        Re: Re:

        I saw the ridiculous low caps for Rogers and was like wtf?!?! Sure glad my caps are reasonable for my 20/10(d/u) mbps internet($32/month after $5 bundle discount) at 110 GB up and 110 GB down. I could transfer 1 TB each way for the biggest plan at 200/200 mbps($340/month).

         

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          Anonymous Coward, Jul 25th, 2010 @ 5:24pm

          Re: Re: Re:

          20/10 for $32/month. What the heck, the most upload I've seen in the U.S. is like 20/1 for maybe $50 a month? Dang, we really need more competition.

           

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      Anonymous Coward, Jul 23rd, 2010 @ 1:18pm

      Re:

      "Just sell restricted internet access instead and let us choose someone else for our internet."

      That's so easy to do, especially when the government intervenes to restrict competition.

       

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      Simon, Jul 23rd, 2010 @ 1:32pm

      Re:

      I get to choose Rogers or Dial-up (and possibly some kind of wireless system)... that's the problem.

       

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      Tony, Jul 23rd, 2010 @ 5:00pm

      Re:

      The problem is twofold. First, for a great many there is no alternative. If you can only get internet from ISP A then you're at their mercy. Second, most ISP's are just waiting to switch to this low usage/high cap billing model.

      Look at what AT&T has done in the states with their wireless data. How long do you think it will be before Verizon joins them? One after the other they will all adopt the same billing model, they are simply waiting for someone brave (or stupid) enough to test the waters. Time Warner tried it with internet in the States, AT&T followed but then TW's greedy paws got smacked by the public and forced them to stop. AT&T very quickly followed suit and stopped their metered billing trials to avoid the negative publicity.

      This lie of a billing model is so the corporate bosses can justify their salaries to the board of directors and investors looking for ever-greater dividends.

       

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    Anonymous Coward, Jul 23rd, 2010 @ 1:02pm

    Welcome to Canada where those that supply the backbones are, surprise surprise ... in the television business!

     

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      TtfnJohn (profile), Jul 23rd, 2010 @ 6:35pm

      Re:

      You must be talking about Shaw and Rogers, both in the cableco buisness as well. :)

      Telus and Bell are just getting into that but only in the largest centres with nothing for smaller areas as we don't count unless we want satellite.

      Telus, as far as I can tell, have no usage caps or throttling in place except in the case of expect overly heavy usage network wide like the Olympics and even then it wasn't very noticable.

      BTW, no one is as horribly, horriby bad as Rogers in the area of customer service or relationships with customers. Guido and his violin case are paragons of virture compared to Rogers.

       

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    Tyanna, Jul 23rd, 2010 @ 1:19pm

    I use to have Rogers.

    First they increased my bill. Then they put a cap on my service to 60GB. Then they increased my bill again.

    That combined with crappy overall service, an unreliable network, and throddling (though they don't openly admit that), made the decision to move to Teksavvy an easy choice. (200GB for $40/month? Yes please!)

    I get a letter in the mail every so often form them telling me how much they miss me and how much they want me back. But it's the same old same old.

     

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      :Lobo Santo (profile), Jul 23rd, 2010 @ 1:23pm

      Re: Bollocks

      "I get a letter in the mail every so often form them telling me how much they miss me and how much they want me back. But it's the same old same old."
      In response, use the letter as toilet paper and then send it back to them.

      ; P

       

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        Anonymous Coward, Jul 23rd, 2010 @ 1:30pm

        Re: Re: Bollocks

        Or Tyanna could send a letter back thanking them for being considerate enough to think of her and explaining that she would love to switch back if she could but because she already made the regrettable mistake of signing a two year contract with a competitor she can't. That usually gets them to leave you alone.

         

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          kyle clements (profile), Jul 23rd, 2010 @ 3:11pm

          Re: Re: Re: Bollocks

          You don't even have to do that.

          Just tell Rogers exactly what the competition is offering.
          Then ask them to beat that offer.

          Tell them that you will happily switch back when they can offer superior service at a better price.

          Then, if you want to have some fun, point out that company x's 3mbps is so much faster in actual real-world usage than Rogers' 3mbps service. Ask them about that.

          My Rogers contract is up this month, I'm looking into teksavvy at the moment.

           

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    Anonymous Coward, Jul 23rd, 2010 @ 1:41pm

    Interestingly Canada still ranks higher than the U.S. in this report.

    http://www.itif.org/files/BroadbandRankings.pdf

    Though the report seems rather outdated. I wonder if anyone knows of a more up to date report?

     

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    Anonymous Coward, Jul 23rd, 2010 @ 1:43pm

    i hear bell and telus want to implement a fee per site visited system, buy a package, and what you visit out side the package is charged a extra fee. they want to take control and censor the net, not let you free roam as you can today.

     

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      :Lobo Santo (profile), Jul 23rd, 2010 @ 1:51pm

      Re: Cute

      Yeah, so when the advertisement script on the webpage you're on calls it's way thru a dozen domains to concatenate your annoying flash ad, how much extra does that cost you?

       

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      btrussell (profile), Jul 23rd, 2010 @ 4:12pm

      Re:

      I think you will find they have changed their tune.

      "The ISPs were understandably elated at the decision, yet there was some cautionary wording from the court, which emphasized the ruling was conditional on ISPs remaining content-neutral. Should ISPs play a more active role, their ability to claim mere conduit status would be lost and their role re-assessed."
      http://www.michaelgeist.ca/content/view/5181/135/

       

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    dev, Jul 23rd, 2010 @ 2:16pm

    the caps suck, and i think im switching to teksavy with unlimited.

     

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    Logan2057 (profile), Jul 23rd, 2010 @ 2:52pm

    ROGERS BLOODY SUCKS!!

    I, too, used to have Rogers at one time and got tired of their incessant "GIVE US PRE-AUTHORIZED" in regards to my bill, which I paid the first of each month like clockwork. Didn't matter to these bums. I lost my cable due to being behind on the bill, which I'm not worried about, but my wife got Rogers in her name, only to go thru the same thing with their accounting department in regards to the "Pre-Authorized" dance. She told them she got paid around the end of the month and for almost two years every 13th of each month she had the same song and dance from them about it. Finally she was one month behind and they called, she said she'd have it paid in full the following Wednesday, when she got paid. They said, OK, no problem, then hung up and shut the cable off then and there. She said the hell with and called Bell Express Vue, Aliant's satellite service on Thursday that week. By Saturday we were up and running and have been with Bell Express Vue for almost four years now with no complaints about the service or nags each month about pre-authorized access to our account.
    Despite her paying the damn thing off once she got paid, Rogers still tried to say she owed them over 200.00 and I finally had to get a screen shot of her account at Rogers to make them go away. Now, even tho we've not had this bunch of losers for almost four years, we still get spammed by them in the mail with their offers for their phone, their TV service including their HD service, this despite the fact that once you're not a rogers customer for a year they have to stop sending you garbage mail like their "so-called" great offers, etc. I'm with Bell Aliant and pay the same amount now that I was paying with Rogers for my TV and Internet, plus I have unlimited and no bandwidth caps.

     

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    Jeremy7600 (profile), Jul 23rd, 2010 @ 3:06pm

    I knew this when TW tried to "educate" us last year

    When Time Warner planned to roll out the usage caps, I could see exactly what this was about. I personally dropped my cable television service because I only used it for Speed Channel and Dirty Jobs and Mythbusters. When I realized the extra $60 or $70 a month wasn't worth it, and it came time to shed some bills, cable TV was the first to go. I started watching even MORE shows on my internet connection: Lost, (which ABC gratefully showed all of the first three seasons before season 4 was aired), Fringe, and others on Hulu. I got a netflix sub last year. When TW unveiled the caps idea, I knew that what I was doing was what they wanted to capitalize on. I left cable TV and they wanted the revenue back, and the only way they would get it is if they capped my bandwidth and I exceeded it. With Skype video calling and all the rest, I would chew through their cap in about 2 weeks. That would NOT add value to my service. that would REMOVE value and COST ME MORE. Thank fucking god they backed off.

    You know, I already paid for my service. It's the $45 a month I pay my bill to TW. If I remember correctly, TW was adding more customers each year on internet, Revenues were up and so were profits. I thought we were straining the system so bad they were losing money? Guess they thought people wouldn't go looking into their financials. And grandma can't afford cable? Big wh00pdeed00. She can get $10 dial up or $20 lower tier DSL. Oh wait, those aren't TW services, are they? Pity.

     

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    Adam Bell (profile), Jul 23rd, 2010 @ 4:28pm

    Cable Service in the Maritimes

    After reading the comments here, I'm really pleased with my service here in Nova Scotia. Eastlink provides Cable TV, Phone, and Internet for a bundle fee with 30Mb/sec down and ~2Mb/sec up and I've never detected a cap.

     

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    Brett Glass, Jul 23rd, 2010 @ 5:28pm

    Total BS

    The article above -- like most anti-ISP tirades -- is total BS. I am an ISP, and I don't provide television service. But I must use throttling and similar techniques to prevent bandwidth hogs from taking over the network and keep prices reasonable. I doubt the author has ever MET an ISP, much less done anything remotely resembling providing broadband for a living.

     

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      Mike Masnick (profile), Jul 23rd, 2010 @ 5:52pm

      Re: Total BS

      The article above -- like most anti-ISP tirades -- is total BS. I am an ISP, and I don't provide television service. But I must use throttling and similar techniques to prevent bandwidth hogs from taking over the network and keep prices reasonable. I doubt the author has ever MET an ISP, much less done anything remotely resembling providing broadband for a living.

      Brett, we've discussed this with you multiple times in the past, and I have to say that if you perhaps spent less time trolling blogs to post angry comments, and more time serving your customers' needs, you wouldn't have so many problems. It's amazing to me how many blog posts about net neutrality all seem to have comments from you. My only surprise here is that you don't blame Google, which is your standard move.

      Yes, if you have a shitty network, bandwidth hogs may be a problem. So, I'm guessing that's the problem with your service. Perhaps work on that. But many others have shown that if they actually invest in the network, there's no problem. And despite your insults and insinuations against me, I have spoken about this issue, in detail, with various high level technical folks at very big ISPs.

      But, I guess if you don't have a real argument you focus on shooting the messenger, huh?

       

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      Anonymous Coward, Jul 25th, 2010 @ 6:41am

      Re: Total BS

      Brett, I'm assuming you're a WIRELESS ISP? Smaller amounts of bandwidth are available on wireless networks, and it's painfully expensive to upgrade capacity because of wireless equipment costs, especially for a small provider. If that's the case it's understandable that you need to throttle your bandwidth somehow. But WIRED (DSL, Cable) ISPs have no such excuse.

       

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        TPBer, Jul 25th, 2010 @ 12:29pm

        Re: Re: Total BS

        He is a very small time provider in Laramie, Wyoming, what do you expect his response is. I did not even know the interwebs reached out there.

         

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      BigKeithO (profile), Jul 26th, 2010 @ 10:22am

      Re: Total BS

      What is a "bandwidth hog" exactly? Someone using what they paid for? I feel zero sympathy for ISP's who get all upset that people are actually using what was sold to them. I bought the use of a 15/2 Mbps connection, I fully expect that I can use it as advertised. If you don't want people to use it don't sell it.

       

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        Derek Kerton (profile), Jul 26th, 2010 @ 4:00pm

        Re: Re: Total BS

        A "hog" is common parlance for somebody who uses a larger portion of the shared resource than the others. The term is not about how much you use in absolute terms, but it is about the "hog's" usage relative to average.

        Yes, you're right that you, or any so-called "hog" should be able to "use what you paid for" with no shame or repercussions. If the ISP sells unlimited, you should be unlimited.

        But your argument is a tautology:

        1) the ISP sold me unlimited
        2) therefore I should be able to use unlimited bandwidth
        3) and if I have bought an unlimited plan, the ISP must sell me an unlimited plan. Go to 1).

        The #3 step in your argument is false. The seller is free to change the pricing on their service, or the amount offered.

        The Canadian ISPs in question want to change from selling you "unlimited" to selling capped service. In that case, "what you paid for" would have changed.

        ISPs were dumb to ever sell "unlimited". They should have sold capped services with high caps right from the start. But like most of us, their marketing dept. used short-term thinking. So now, when they are finally trying to honestly market their service, people are upset.

        If people don't like the pricing from one provider, the correct choice is to leave and buy alternates. The sad thing is that consumer have little recourse, since there is inadequate competition.

        So don't complain about a business putting in sensible pricing plans. Complain about a lack of competition.

        "If you don't want people to use it don't sell it." Isn't that what Rogers is doing?

         

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    smogcheckdeals.com (profile), Jul 23rd, 2010 @ 6:32pm

    Any limit won't work

    No regulation can stop Technology

     

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    Jambalaya, Jul 23rd, 2010 @ 8:00pm

    LL

    If you are one of the sheep still with rogers, you deserve what you get

     

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    Anonymous Coward, Jul 23rd, 2010 @ 9:17pm

    There is not such a thing as hog's.

    Ask for statistics from the network and they all shy away you will only hear the silence.

     

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    KnightHawk, Jul 24th, 2010 @ 12:10pm

    What's the excuse? They don't want hogs or the network can't handle all the use? UPGRADE the network greedy bastards. New company in my area is just starting and they have unlimited. Just have to wait for them to get setup around me.

    http://www.itv-3.com/index.php

    If they can do it why can't the big providers do it?

     

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    DanVan (profile), Jul 24th, 2010 @ 12:17pm

    This idea of capping people is an absolute joke

    If companies want to be extremely high caps, I guess I am fine with that but now we have companies giving caps that even email-checking users can hit with a few youtube-HD vids or Netflix

    Their excuses are an even bigger joke

     

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    Kevin Costain, Jul 25th, 2010 @ 7:51am

    Really,

    I find all this fairly discouraging, at the very least. Being in Canada and a customer of Rogers - I can't help think that the ISP industry here is about really to implode on itself.

    Here are some incredibly troubling things I have observed:

    1. The hate for Rogers and Bell as ISPs is almost universal. So much so, that a representative of Rogers came to my door last week and EXPECTED hate. They expect it. It is therefore it is likely that ISPs could care less about making customers happy in a climate like this.

    2. The CRTC is supposed to regulate and make providers server US. Last I heard the board is comprised of MOSTLY Govt or business insiders:

    http://www.crtc.gc.ca/eng/about/commissioners.htm

    I see no reason for Canadians to have confidence in these folks.

    3. Clearly lowering caps will cost us more, but underneath this, there are other shady things happening.
    -> A customer support person is likely FORCED to place you on a new plan (lower caps) if, for any reason there are changes in your account with Rogers. This is generally enforced in such a way that the person on the phone with you has no way to override this using the software at their desk.
    -> When you are close to your CAP, you are indeed given a notice by way of some sort of packet injection. The notice, however is extremely vague. it says that you are, for example, at 85% of your usage and some other things. You are NOT told at that moment how much usage you have taken, how much usage is left, and probably the most important detail - how much time before the next billing cycle. You'll have to hunt for other tools to get that information. In the meantime, this likely works in Rogers' favor.

    4. ISPs like Bell and Rogers have also lead a years-long charge to become MORE monopolistic, not less. From buying up ISPs, to controlling access to the Internet - most of the things I see happening with them seem to move towards less competition, not more (I have to admit, I don't study every move - so this is not an exact science).

    As a Canadian Internet customer - things are not pretty.

     

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    anonymous, Jul 25th, 2010 @ 10:26am

    My ISP is rolling out whole-home PVR soon which is going to REDUCE my downloading because I will be free to watch television shows when I want to watch them rather than when the broadcaster thinks I should. That's the absolute only reason why I download shows at all and most people I talk to think the same.

     

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    Anonymous Coward, Jul 26th, 2010 @ 10:45am

    i feel soory for yuh canadians, ay?

     

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    Nick Waye, Jul 26th, 2010 @ 7:19pm

    It will end soon

    The Rogers move was a prick move, but an move that we all knew they would make. All of this data cap nonsense will eventually when Hollywood and the Big ISP's realize no one can afford there services or too poor to ever do so. They'll stifle the internet and wonder why revenues are decreasing. Flat pricing will return when this starts to happen. However, I feel we'll be too broke to care.

     

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    Ryan Winingnear, Jul 26th, 2010 @ 7:56pm

    By Golly, if I was running a broadband company, that capping sh*t would not fly. When someone pays for their broadband each month, they deserve to have access to it. Besides Netflix is getting very big with the streaming and websites are becoming heavily loaded with flash and java more and more. In case you do not no, EVERYTHING you do on the internet with one of these plans adds counts on your limit. Including every page that that you load. Not fair, but the cold truth.

     

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    Lyla Burns, Mar 16th, 2012 @ 1:46pm

    Wow, I didn't know that all this 'cap' business was going on. I'm surprised they still have as many customers as they do. I own an auto repair hollywood ca, and I wouldn't do something like that to my customers. To each his own I guess.

     

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