If You're Going To Meter Or Cap Broadband, Shouldn't You Provide A Meter?

from the where's-the-problem? dept

With various ISPs implementing forms of capped or metered broadband, you would think it would be standard (if not required) that they also provide consumers with the tools to measure their consumption. Otherwise it seems a bit unfair to say you can only use x amount, but you have no way to know when you've actually done so. But, it seems that hasn't really stopped various ISPs. News.com is noticing that despite capping broadband connections at 250 gigs/month for many months (and rumors and screenshots of it), Comcast still refuses to deliver a broadband monitoring solution for users. If that's the case, it makes you wonder how accurate/reliable its own internal monitors are, and how it can guarantee that users actually get the 250 gigs they're promised. Perhaps I'm missing something, but is it really that difficult to measure broadband usage? If so, that would seem to be yet another reason that ISPs might want to stay away from metered broadband: the cost of developing a system to actually track it.

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As Expected, Bill Introduced To Outlaw Tiered Bandwidth Pricing

from the this-won't-go-far dept

As was widely expected, Rep. Eric Massa has introduced a bill that would outlaw metered billing and create a bunch of other regulatory hoops ISPs need to jump through on pricing plans. We're no fans of metered broadband by any stretch of the imagination. It stifles innovation and limits the usefulness of the internet. Contrary to what some broadband providers will claim, it's not at all necessary and has nothing to do with preventing the network from being overrun or to stop part-time users from "subsidizing" everyone else. The Broadband Reports link above walks through how silly each of those arguments are. It also explains why this is a pure money grab. Flat-rate pricing has been quite profitable for the providers, but they want more. Note that nowhere in these usage plans do they talk about cheaper tiers. Beyond just being about a straight money grab, part of the desire is to use this to reduce competition for online video by making it more expensive for anyone other than the ISP to deliver video services.

That said... this bill seems laughable and is unlikely to go anywhere. The real issue here (as it has been all along) is the lack of meaningful competition in the broadband space. Get meaningful competition into the market, and this whole issue goes away. But that's not what Massa's bill does. It just adds regulatory burdens to ISPs without doing much to get at the root of the issue.

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Politicians Defer To Time Warner Lobbyists Who Wrote The Bill They're Pushing

from the funny-how-that-works... dept

Following up on the earlier story of Time Warner Cable going the political route to try to block municipal competition in Wilson, North Carolina, Broadband Reports has a story pointing out two interesting side stories:

1. During hearings about the law to ban such municipal competition, the politicians pushing the bill that would ban municipal competition were asked to clarify, and rather than answer themselves, the politicians "turned to a Time Warner staff member and an attorney who represents the industry to speak on their behalf." In other words, they outright admitted they didn't understand their own legislation and that the corporate lawyers from the company that would benefit from the legislation understood it better than they did. It's certainly no surprise that lobbyists write the legislation that politicians pass, but usually they at least try to hide it a little bit. Here they're basically flaunting the fact that Time Warner Cable wrote the bill, and the politicians just shuffled it through the process without understanding it. Isn't it great to be a servant of the people?
2. Time Warner Cable is complaining about what a huge cost municipal broadband is to the people of Wilson, but leaves out the fact that Time Warner Cable's CEO's compensation from the past two years is greater than it cost the city of Wilson (via a bond measure, so not taxpayer dollars) to fund the deployment of the fiber network. And you have to wonder if Time Warner Cable will end up spending more trying to block this competition than it would have cost to have built out a competitive quality service as well.

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Verizon's Take On Broadband Caps: A Sign Of Competitive Market?

from the hmm...-not-quite dept

Of the broadband providers out there, Verizon has certainly been better than others in terms of actually trying to create a much better product, rather than focusing on ways to just squeeze more for less out of their customers. I've always thought that Verizon made the right move six or seven years ago, when it decided to invest heavily in providing fiber to the home, while other providers said it was too costly. While it was costly, at some point (say: now) it would give Verizon a real leg up on the competition in offering a much better service. While I have plenty of disagreements about some of Verizon's other positions, the company has at least focused on providing value.

So, I was hopeful that when Verizon weighed in on the whole "broadband cap" debate, it would take a much stronger position than simply claiming that broadband caps are a sign of "highly competitive markets with companies trying to come up with more value, innovation and differentiated offerings to help them attract customers." While the discussion does make it clear that Verizon is focused on investing in adding more value, it's a bit disingenuous to claim that the caps are somehow a sign of a competitive market. If anything it's the opposite. The public reaction to the caps shows that the problem is the lack of competition, allowing these providers to move forward with such plans, knowing customers in many cases can't switch to a competitor. Also, it's difficult to see how providing less service for more money is "coming up with more value [and] innovation."

So, Verizon is right to point out (as it does), that it's more focused on providing higher quality service, rather than caps, but it's not being entirely honest in saying that this is a sign of competition. It's not.

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Is AT&T Doing Bait & Switch On Broadband Caps?

from the not-surprising,-but-not-good dept

You would think with the PR nightmare surrounding capped broadband that forced Time Warner Cable to at least temporarily back off limiting broadband, that other broadband providers would be a lot more careful. However, Gigaom reports that some AT&T U-verse customers are discovering the broadband that AT&T is selling them is capped with low limits, but they're not being told about these limits until after they're locked in. It would seem like this is the sort of thing that the FTC has been known to frown upon -- not to mention it's also the type of thing that gets people pretty upset in a hurry. It really is amazing how hamfisted the broadband providers seem to be when it comes to marketing their broadband plans.

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Time Warner Backs Off Metered Billing... Until It Can Figure Out A Way To Not Look So Stupid Presenting It

from the we're-sorry-for-the-misunderstanding dept

After a few weeks of getting hit back and forth by pretty much everyone concerning its plans to expand metered broadband with incredibly low caps and ridiculously high profits (even as its own costs were dropping, and the growth rate of broadband was slowing), Time Warner Cable has now agreed to back off from implementing the plan... for now. From the wording, it's quite clear that the company isn't backing off because it realized that it was a bad idea, but it's retreating because it wants to rethink how it pitches the caps:

It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption based billing. As a result, we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met.

Translation: because you crazy consumers were being so loud, we need to make it look like we're listening to feedback, and hopefully we'll get to roll this out at a later date when you're more focused on other stuff, maybe by calling it something that sounds more innocuous.

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Law To Ban Broadband Caps Moves Forward

from the not-the-best-solution... dept

We've already noted that NY Congressman Eric Massa believes broadband caps raise First Amendment issues, though we have trouble understanding exactly what those issues are. We're not fans of the caps by any stretch of the imagination -- and, in fact, think that they're bad for innovation and bad for everyone (including the broadband providers implementing them). However, that doesn't make them First Amendment issues. Still, Massa seems committed to introducing new regulations against caps, which may be as misguided as the caps themselves. The real issue shouldn't be whether or not the caps exist; it should be how we can enable more competition in the broadband space, such that caps are no longer an issue. Massa claims his bill will "seek to increase competition among broadband providers," but didn't provide any explanation of what that actually meant. It would be great to see more competition, but it seems unlikely that what's being cooked up here will do the trick.

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Look At That: Competition Helps Stop Broadband Caps

from the it's-all-about-the-competition dept

For years, many people have been pointing out that the real problem with broadband in the US isn't an issue of net neutrality or broadband caps, but the lack of competition. While having only two providers in a region usually isn't enough to ensure reasonable broadband practices, it may actually be working in upstate NY. While Frontier Communications has been talking about really low usage caps, it seems that now that Time Warner Cable has decided to launch capped broadband in one of Frontier's regions, the company may be thinking about going in the other direction, potentially even running a whole ad campaign about why TWC customers should switch to avoid the caps. Of course, given Frontier's previous statements about caps, it's difficult to believe that customers will be all that well protected from an eventual capped broadband anyway. But, still, this demonstrates that competition can sometimes keep these things in check. But, what you really need is more than just two players.

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Frontier DSL Stands By Its Caps... Even As It Decreases Broadband Speeds

from the that's-called-not-investing dept

Frontier Communications last year was a big supporter of capping broadband usage at 5gigs (both up and down). The company is still hyping this up, claiming "It is important that customers that use less don't subsidize those that use the most." That sounds nice, and we'll be hearing that a lot from various broadband providers over the next few months and years -- but there's no proof that it's true. For example, no one seems to be offering cheaper plans for those customers who use "less." So if they were subsidizing the high end users before... what's happening to that money now? It certainly doesn't appear to be going into infrastructure improvements. As Broadband Reports points out, many Frontier customers have recently had their broadband speeds decreased from 6Mbps to 3Mbps.

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Why Internet Companies And Content Companies Should Oppose Broadband Caps

from the it's-going-to-stifle-innovation dept

I've been on record for quite some time as being opposed to metered broadband caps by ISPs. Plenty of others -- including some of the other Techdirt writers -- disagree, insisting that they will work fine allowing ISPs to "differentiate" service levels. I find that to be quite optimistic, as most of the examples we've seen so far have really only involved ISPs putting in ridiculously low caps in order to squeeze excess money out of people. And, before anyone says it, there's no evidence that ISPs "need" to cap usage to avoid a bandwidth crunch. Such things have been disproved time and time again.

But, my biggest reason for opposing broadband caps is that it will stifle online innovation in a variety of ways. First, bandwidth caps don't give ISPs much real incentive to invest in more bandwidth (contrary to their claims). That's because the more "congested" they can show their network is, the more they can charge more for basic usage. It sets up incentives for the ISPs to want more congestion, rather than less. Second, it will greatly limit the adoption of new and innovative services. Suddenly there's an additional "bandwidth" cost to testing out certain types of apps. This makes people less willing to even bother, and basically knocks out any (relatively) high bandwidth service before it can even get started.

For example, look at Larry Lessig's recent experience while traveling in New Zealand. He's apparently "subscribed" to the TV show House via iTunes. So, at the hotel in New Zealand, he paid for expensive broadband service that mentioned, in the fine print, that his access was limited to a grand total of 1 gig. He logged in and started checking email. In the background, iTunes started downloading the latest (high def) episode of House which itself ran 1.5 gigs. So half an hour later, not only is his broadband cut off, but a message pops up telling him he's being fined for "violating ethical rules." It's troubling enough that the provider somehow thinks it's an ethical violation -- but this shows how bandwidth caps can easily stifle perfectly legitimate activities and aren't (as many have implied) about "stopping pirates."

And, it's for this reason that many entertainment companies should also reconsider their support of caps. Many in the entertainment business have supported caps as one (of many) ways to combat "piracy." But now, as more and more legitimate, authorized content services are available online, these caps are going to do serious harm to their online business as well. Now, perhaps some of them (stupidly) think that this is okay, because it will just drive people back to the "old way" of doing things, that's unlikely to happen. It's just going to piss people off. Once you've shown them that they can do something, people don't tend to like having that option taken away from them.

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On The Importance Of Unfettered Broadband

from the it-goes-beyond-just-movies dept

A little over a year ago, I tried to explain why metered broadband or capped broadband slows down innovation. However, many have responded that as long as the basic caps are reasonably high, it shouldn't be a big deal, because, "how much bandwidth do you really need?" People note that the only ones who might be using up the 250GB caps announced from Comcast can only be downloading non-stop movies. But that's not really the point. The real question is what innovations are we not seeing because of limited bandwidth. Not so long ago, the very idea of something like YouTube was preposterous, but thanks to abundant bandwidth it became possible. But something like YouTube is just a tiny way down the path to what's possible.

Tim Lee has a great post making the point that it goes well beyond just "how much bandwidth does a single person need" or even looking at what specifically they're downloading, to recognizing the change in tradeoffs for creating applications if bandwidth is effectively unlimited. As he notes, in any engineering situation, there are resource tradeoffs. If you're building an application, there are tradeoffs to making a client side app vs. a web-based app, for example. However, if bandwidth is truly abundant, the very nature of those tradeoffs change and it allows for entirely different types of development, often in ways that are difficult to fathom right now.

Lee gives a few random examples of what unlimited bandwidth might allow as the tradeoffs change:

People with cable or satellite TV service are used to near-instantaneous, flawless video content, which is difficult to stream reliably over a packet-switched network. So the television of the future is likely to be a peer-to-peer client that downloads anything it thinks its owner might want to see and caches it for later viewing. This isn't strictly necessary, but it would improve the user experience. Likewise, there may be circumstances where users want to quickly load up their portable devices with several gigabytes of data for later offline viewing.

Finally, and probably most importantly, higher bandwidth allows us to economize on the time of the engineers building online applications. One of the consistent trends in the computer industry has been towards greater abstraction. There was a time when everyone wrote software in machine language. Now, a lot of software is written in high-level languages like Java, Perl, or Python that run slower but make life a lot easier for programmers. A decade ago, people trying to build rich web applications had to waste a lot of time optimizing their web applications to achieve acceptable performance on the slow hardware of the day. Today, computers are fast enough that developers can use high-level frameworks that are much more powerful but consume a lot more resources. Developers spend more time adding new features and less time trying to squeeze better performance out of the features they already have. Which means users get more and better applications.

The same principle is likely to apply to increased bandwidth, even beyond the point where we all have enough bandwidth to stream high-def video. Right now, web developers need to pay a fair amount of attention to whether data is stored on the client or the server and how to efficiently transmit it from one place to another. A world of abundant bandwidth will allow developers to do whatever makes the most sense computationally without worrying about the bandwidth constraints.

So the question is not how much bandwidth does any person really need. It's how will the entire ecosystem of what we can do change when bandwidth is completely abundant?

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Please Stop Telling Us How Many Emails Fit Under A Broadband Cap

from the it's-really-avoiding-the-point dept

Earlier this year, we pointed out that if you're a broadband provider implementing some kind of broadband cap, and you're hyping it up by showing off just how many emails can be sent under the cap, there's a problem. Obviously, ISPs are using the number of emails as a criteria because emails use up almost no bandwidth -- so no matter what the cap is, the answer is "a lot." But, of course, the number of emails you can send is meaningless. There's no big email epidemic that is what has ISPs claiming they need to put in place limits. As Broadband Reports notes, it's all incredibly demeaning to focus on the number of emails you can send:

Those would all be relevant measurement criteria, were we all idiots.

People don't care about how many emails they can send. They want to know if they'll actually be able to download more than half an HD movie. Focusing on emails is like telling someone that a full tank of gas in their car will allow them to travel six hundred million millimeters. That's meaningless for someone who wants to know if they can actually get from San Francisco to Los Angeles on a single tank of gas. If these ISPs really feel the need to implement caps, at least be honest about what it means for customers.

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AT&T Jumps Into The Metered Broadband Game

from the not-too-surprising dept

As was widely expected, AT&T has officially jumped into the metered broadband game, initiating a system in Reno, with caps ranging from 20 to 150 gigabytes per month, depending on tier, and overage fees at $1/gigabyte. These caps are significantly lower than Comcast's caps, though higher than we've seen elsewhere. At this point, it's become pretty clear that all of the major ISPs seem to want to adopt such tiers and overage fees, which I still think will come back to bite them. It would be an opportunity for others to offer more competitive offerings if the FCC hadn't done everything possible to kill off competition in the broadband space.

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Even Light Users Would Look For Alternatives If Their ISP Uses Broadband Caps

from the would-certainly-help-if-there-was-competition dept

Longtime readers know that I'm no fan of metered broadband or it's half-sibling "broadband caps." They're not the worst thing in the world, but they set in place the wrong incentives, making an internet connection a lot less valuable. There are certainly those who disagree, but we've lived in worlds with metered internet access and phone systems before, and it leads to decreased overall usage -- and that's not a good thing. It acts as disincentive to creating the next great internet service that could be a boon to the economy.

Customers recognize this implicitly. They hate the idea of any sort of mental transaction cost associated with "watching" their bandwidth usage -- especially since they have no clue how much bandwidth they really use. A recent study highlights this pretty clearly. 83% had no idea how much bandwidth they use -- with many not even having an idea of how much data one gigabyte represented. 81% of those surveyed stated they were against the caps, and 51% said they'd look for alternative providers if their ISPs implemented such a cap. Interestingly, even light users were against such plans. That seems to go against what ISPs tell everyone, claiming that light users would be able to get cheaper access. Yet, those light users recognize that it would more likely end up with them keeping the same price, but with more limits.

Now, some will be quick to respond that of course people surveyed will hate broadband caps. It's like asking people if they want to get less for the same price. But the key point here is how many people would look for alternative providers, combined with the fact that, for most users, there really aren't many choices. Once again, this highlights the key problem with US broadband: there's almost no real competition. You have the duopoly of the telcos and cablecos, and not much else that represents real competition. Most of the biggest providers (Comcast, AT&T, Time Warner Cable) have made it clear that they intend to cap broadband. The only really big holdout is Verizon, who is betting that its FiOS offering won't require similar caps. But FiOS is still limited in its footprint, and it will be worth watching what happens over time. So while there are plenty of skirmishes about things like net neutrality and broadband caps, don't lose site of the real issue: the lack of significant competition for broadband in most markets.

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Comcast Officially Caps Broadband That It Had Already Secretly Capped

from the fair-enough dept

As was rumored back in May, Comcast has finally come out and officially announced that it's capping its broadband at 250 GB per month as of October 1. Despite earlier reports, there was no confirmation of any overage fees for those who go beyond that. While I still think that tiered broadband is an overall mistake, Comcast's plan is a lot better than most other ISPs who are putting in broadband caps that are often ridiculously low. And, since Comcast has already had a secret cap, all this new plan does is finally reveal what that cap is. So, realistically speaking, this is a step in the right direction, in that Comcast is actually revealing what its secret cap is and it's made the cap so high that it shouldn't impact most users.

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Time Warner Cable Using Incentives And Fine Print To Lock Customers Into Broadband Caps

from the read-the-fine-print dept

Back in January, Time Warner Cable admitted that it was considering adding usage caps and overage fees to broadband users. It recently started signing up new customers for these offerings (sometimes with absurdly low usage caps). Of course, it knows it can't just change existing customers over to such plans, realizing they'd be in for quite a set of lawsuits for selling people one thing and then completely changing the terms. However, it's now working on a way around this: trying to convince existing customers to upgrade to special triple play packages with "locked in" pricing for a year and then burying in the fine print that they also agree to the usage caps. Sneaky. Soon it won't be long before you won't be able to change anything on your plan without also agreeing to the new usage caps.

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When You Measure Broadband Caps In Terms Of How Many Emails, Something's Wrong

from the that's-not-broadband dept

We've already talked about how low it appears some ISPs are making broadband "caps." Doing so seriously destroys the value of a broadband connection and will likely backfire on the ISPs who provide it. But, for those companies that are putting in place such low broadband caps -- a small suggestion: when discussing how much the caps allow, listing out how many emails you can send or receive under the cap is probably a bad idea. If the cap is so low that the number of emails is even worth mentioning, you've got a serious problem.

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Japanese Broadband Caps Compared To US Broadband Caps

from the take-a-look-around dept

With various US broadband firms implementing usage caps sometimes as low as 5GBs/month, we are quite concerned about how these moves will hinder innovation by effectively placing much greater mental transaction costs on using any kind of application online. In defense of these caps, some have pointed out that even Japanese ISPs (sometimes used as an example of a much better broadband system than in the US) are also implementing caps.

Broadband Reports now has the details on some of those caps, and they're much higher than in the US (just like Japan's broadband speeds). The cap is 30 gigs per day of upload. There are no download caps. So, yes, the Japanese caps (that some want to use as an example of why caps are necessary) are many times greater per day than what some US firms want to offer per month -- and it's only for upload, rather than download. Suddenly, I get the feeling we'll be hearing the example of Japanese broadband caps a lot less frequently.

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Time Warner Cable Tiered Broadband Test Begins

from the if-only-there-were-competitors dept

Earlier this year, the story came out that Time Warner Cable wanted to experiment with capping its "unlimited" broadband, trying to force the heavy users to pay more. Even worse, it appeared to want to use exceptionally low caps that would discourage innovation. Despite all of the concerns, Time Warner Cable is moving forward with the test as planned.

The end result will be taking away value from customers -- not just in limiting how much bandwidth they get, but by adding a huge mental transaction cost. Basically, what Time Warner is doing, is adding a huge overhead in terms of whether or not users are willing to actually use the bandwidth they signed up for. Just the fact that people need to think about how much they're using will decrease usage significantly. While that may be what TWC wants, what it really does is annoy customers. This would never actually happen if there were real competition, but with very little competition out there, TWC can try out this plan. Any other broadband provider competing against TWC in areas where this test is going on should be hitting on the limits in any advertising campaign. TWC is free to do whatever it wants, of course, but it's never a good business move to take away features from customers -- especially if in doing so you add an annoying mental transaction fee.

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