Will John Sununu And Harold Ford Jr. Agree To Pay Netflix's Broadband Bill Next Month?

from the simple-request dept

Not this again. I thought that we were well past lobbyists publishing op-ed pieces in which they flat out lied about how broadband pricing works. Almost exactly five years ago, we called out (then) telecom lobbyist Mike McCurry (a former Clinton press secretary) for his bizarre and ridiculous claim that Google got its bandwidth for free. We asked, if that was the case, if McCurry would agree to pay Google's bandwidth bill. McCurry never responded, though the astroturf group he ran at the time was clearly reading, since they took other comments of mine totally out of context at a later date.

It looks like we're in for a repeat with some other ex-DC folks-turned-sell-out lobbyists. This time, it's former Senator John Sununu and former Rep. Harold Ford Jr., shilling for "Broadband for America," claiming that Netflix gets its bandwidth for free. There are so many things wrong with this particular op-ed piece, which is so dishonest that the Mercury News should publish a full retraction and apology. But, for now I'll just make the same deal that I offered to McCurry five years ago:
If John Sununu and Harold Ford Jr. really believe that Netflix is getting a "free ride" with its bandwidth and this is somehow socially irresponsible and unfair, will they agree to pay Netflix's broadband bills for the rest of this year?
Perhaps they can trade bandwidth bills with Netflix. I'm sure if they're willing to pay Netflix's bandwidth bill, Netflix would have no problem paying for their home DSL lines. Hell, maybe Netflix will even cover their mobile broadband accounts as well.

As for the rest of the op-ed, it's pretty funny. While they play up how Netflix "saves" $0.40 in postage by not having to use the mail, they ignore the fact that in order to stream movies, Netflix has to pay ridiculously high licenses. With disc rentals, it could buy one disc and rent it out many times. Not so with streaming licenses. It needs to pay a ton for those.

Then there's this bit of economic cluelessness:
Netflix argues that the marginal cost to the network providers of streaming a half-hour TV show to a residential customer is "one penny." This ignores the hundreds of billions of dollars in sunken network investments needed to create that one-penny marginal cost efficiency at the customer's end.
Um, yes, it does. And as most any economics professor will tell you, you're supposed to ignore the sunk costs in understanding how a market prices things competitively. Telling the market to do the opposite is the very definition of an anti-market, anti-efficient solution.
Consumers tend to pay more when they consume more goods and services, and pay less when they consume less.
And, contrary to the claims in the article, Netflix pays more when its users consume more. Again, will Sununu and Ford pay Netflix's bandwidth bill?
The reality is that Netflix and similar services want a free ride on the networks built with more than $250 billion in design, engineering, manufacturing, construction and maintenance -- a system that now provides broadband services to 95 percent of American households.
Hey, you know what? I spent a lot of money building Techdirt. All of you now owe me money. Apparently that's how Sununu and Ford view market functions. If one party spends a lot of money on something, everyone else is just required to pay. Of course, back here in the real world, that's not how things work. Various broadband companies (with massive taxpayer subsidies, by the way) built out broadband networks because they knew it would be profitable to do so. They made their bet and made their deal. Now they're trying to change the deal by pretending that someone's not paying. They're lying. What they really want is for service providers to pay twice for the same bandwidth. Netflix is already paying for its bandwidth. Consumers already pay for their bandwidth. Sununu and Ford (and really, the telcos they represent) are really trying to get Netflix to pay again, pretending that they should pay for the bandwidth that consumers already paid for, even though Netflix is already paying for that bandwidth. This is about trying to double charge.

If broadband providers are so hard up for cash, then just let them raise rates. Nothing is stopping them from doing that. But that's not what this is really about. This is about trying to force Netflix to double-pay for consumers' bandwidth as well.

So, once again, John Sununu and Harold Ford Jr.: since you insist that Netflix is getting a free ride, will you pay Netflix's bills for the rest of the year? Or will you pull a Mike McCurry and simply ignore this simple challenge and go on pretending that Netflix doesn't pay?


Reader Comments (rss)

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    Anonymous Coward, Aug 23rd, 2011 @ 11:14am

    I think where they may be looking is the old "bits in the middle", the infrastructure. Remember, when data transits from one point to another, the two ends are paid for, but the middle bits are supported only by what is paid at the ends.

     

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      Matthew (profile), Aug 23rd, 2011 @ 11:29am

      Re:

      That's a rather generous assumption of ignorance for them. More likely, they are just shilling for the companies that bought them off years ago. I know the saying goes, "Never attribute to malice that which can be explained by incompetence," but I think an exception should be made for obvious corruption.

       

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      Skeptical Cynic (profile), Aug 23rd, 2011 @ 11:31am

      Re:

      So that means there are paid for by the end user and the provider of the product or service like every other product in the world?

       

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      Ninja (profile), Aug 23rd, 2011 @ 11:45am

      Re:

      You have that for electricity. There are places you may pay for the distribution (local low voltage grids), transmission (long distance high voltage lines) and for the generation itself. You may pay either the distribution or transmission too along with it depending on where is the power plant. And there's the Joule effect that makes thing a whole lot more complicated.

      As far as I can see, the ISPs pay for interconnection (ie: if the data leaves the local network) and maybe (just maybe) that's what they are referring to while making an analogy (in their heads) with the electric grid. If you think about it the optic fiber network has little operational cost so the burden falls into maintenance (preventive and corrective). You do have a difference depending on the material the optic fiber network is made of (it'll cause the light inside to hit the walls and be reflected into different angles increasing the total length the data will have to travel but it won't heat the material or cause data loss if the cable is not physically damaged).

      However, and correct me if I'm wrong, ISPs sell a determined speed and what you can transfer with it. So if unlimited then you have the RIGHT to transfer 100% of the amount (in an 8 mbit connection you'd have like 2.592.000 Mb or roughly 2,5 Tb. It is as if the electric company sold energy by time (ie: you may use up to 10 kW as much time as you want totaling 10824,83 MWh per month if I didn't screw up the calculations and I do screw up frequently). Some ISPs will sell a speed (the 10 kW power) but will limit your amount of data, cap you (instead of 10.824 MWh you can use only 5.000 MWh in the electric example).

      We all know electricity is sold by usage (per kWh used) and I think the speed billing is applied to home users only so Netflix must be paying for bandwidth and not for speed (although the size of the pipe must come as a fixed cost). So the question is: why not equalize your billing if you are going to complain how some1 is not paying for the bandwidth? Or for the sake of simplicity you sell speed for your home customers and now that the online services are booming you found out it was a bad idea and you are trying everything to cope with it, from throttling your home customers to trying to make others pay twice?

      Obviously they know that and they are just trying to pull a stunt instead of proposing a better way of billing.

      Sorry for my long post.. Hope it was somewhat useful..

       

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        Slicerwizard, Aug 23rd, 2011 @ 8:14pm

        Re: Re:

        "However, and correct me if I'm wrong,"

        Will do.


        "It is as if the electric company sold energy by time (ie: you may use up to 10 kW as much time as you want totaling 10824,83 MWh per month"

        10 kW load = 240 kWh per day = max 7.44 MWh / month

        Your figure is 1455 times higher.

         

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        Anonymous Coward, Aug 24th, 2011 @ 9:47am

        Re: Re:

        However, and correct me if I'm wrong

        Your analogy has a fundemental flaw which is--

        - Electric power has a non-trivial cost associated with consumption. Resources are consumed as a direct result of generating 1kW

        - Network connections do not (within reason). There are no direct resources consumed as a result of transferring 1kB, except to say that the transmission lines are in use--but as long as the transmission lines are below capacity there is virtually no difference to the provider whether it is idle or nearly saturated. Costs only come into play for this if capacity upgrade is needed (yes, I know that is a factor in this, but I'm just pointing out the flaw in comparing consumption of each).

        Most agreements at datacenters that I've seen (at the very small level) agree to give you a certain speed, say 1Mb/s sustained with "burst" up to 10Mb/s... the concept (again, from my small level) is that you are sold a certain capacity within the month, you'll get it at 10Mb/s if you want and be at your limit in 1/10th of the time period... or you throttle if you're constantly saturated--but that is not typically the case.

        As a home user I'm sold a 10Mb/s connection, but my ToS has a monthly cap associated with it... so my ISP gets to claim fast speeds, but they are not obligated to provide sustained transfer at that speed 24/7.

         

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      chris (profile), Aug 23rd, 2011 @ 12:31pm

      Re:

      I think where they may be looking is the old "bits in the middle", the infrastructure. Remember, when data transits from one point to another, the two ends are paid for, but the middle bits are supported only by what is paid at the ends.

      this is always settled with a peering agreement. the reason that you pay to connect, and netflix pays to connect, is that those connections go somewhere. the somewhere part is taken care of with peering agreements:
      http://en.wikipedia.org/wiki/Peering_agreement#Peering_agreement

      if the telcos didn't negotiate a decent peering agreement, how is that netflix's problem?

       

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      Berenerd (profile), Aug 23rd, 2011 @ 1:02pm

      Re:

      I wonder if they added in the fact that most of these lines run on public property and that the government gave them billions in subsidies....they always seem to forget that...

       

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      Anonymous Coward, Aug 24th, 2011 @ 9:36am

      Re:

      What's your point?

      You have two customers that want to communicate and are paying their own providers to do it.

      If the providers need 3rd parties to form the connection then they are presumably being compensated--either in direct dollars paid or by peering agreements.

      Once again it comes back to everyone figuring out if their business model makes sense (and profit). If you're a peer between Netflix and it's customers then you are being compensated... if you're unhappy with that, raise your rates--though in a competitive market you'll find that they may just find another peer to use.

       

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        jupiterkansas (profile), Aug 24th, 2011 @ 9:47am

        Re: Re:

        Competitive market! Ha! That's the problem - there is no competition for most providers.

         

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          Derek Kerton (profile), Aug 24th, 2011 @ 3:39pm

          Re: Re: Re:

          That's actually a very interesting tangent. If we agree that Netflix pays for their enterprise network services, and the customer pays their ISP for their Internet connection, then:

          - There IS a great deal of competition for Netflix's business. They could work with a variety of datacenters, core network providers, and CDNs.

          - There is far too little competition for the consumer ISP side of the equation.

          Interesting, then, that the lobby effort is directed at screwing the consumers on the non-competitive side...but their feigned anger is about the customers on the free, competitive market side, Netflix.

          I mean, you don't hear Level 3 or Akamai complaining about all the bandwidth Netflix uses, do you?

           

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      chris, Aug 24th, 2011 @ 6:28pm

      Re:

      That might be what they're thinking but that does not mean it's a valid argument. I'd be like me needing to not only pay the store where I buy something, but all the suppliers in the chain. The point is, they have already been paid. You only ever pay one person in any supply chain. And if the wholesalers were not getting enough money, they would raise the prices to the store.

       

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    Ninja (profile), Aug 23rd, 2011 @ 11:21am

    I bet they are pulling a McCurry. Any takers?

    It's amusing, sad and despicable how every1 jumps in to grab a piece of anything that's working wonders. First MAFIAA then the ISPs. They should be GLAD ppl are paying MORE to stream Netflix. Oh wait, ppl are paying less for streaming since MAFIAA greed took (again) the uphand and made them rise the streaming license fees a whole lot.

    I tell you, I think the problem here is the human being.

     

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    Lord Binky, Aug 23rd, 2011 @ 11:27am

    Damn those costs that have been paid for.....

    It is like I have to pay extra to the taxi because the car is not paid off yet. But then when it is paid off (after huge discounts) I need to pay more again, because they have previously put money into paying for the car....

    But I think this is more like the taxi trying to charge me the full price of the trip before I get in, and then again to let me out.

     

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      Jeremy Lyman (profile), Aug 24th, 2011 @ 6:21am

      Re: Damn those costs that have been paid for.....

      Or if you an an ebay seller agreed to split the delivery fee; and then UPS charges your seller the full amount in addition to the half they got from you.

      Because they had to buy trucks... and stuff. If you hadn't bought the trucks I wouldn't have hired you to transport anything.

       

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    Anonymous, Aug 23rd, 2011 @ 11:29am


    Or will you pull a Mike McCurry and simply ignore this simple challenge and go on pretending that Netflix doesn't pay?


    Of course this is what will happen. Once a politician, always a politician.

     

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    Mike, Aug 23rd, 2011 @ 11:50am

    "Hey, you know what? I spent a lot of money building Techdirt. All of you now owe me money."

    As my dad always said, I'd rather owe it to you than beat you out of it.

    So, you know, you got that going for you...

     

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    Anonymous Coward, Aug 23rd, 2011 @ 11:56am

    Fight lobby with lobby?

    I've been reading a lot of TechDirt lately, on the days when I'm calm enough that the topics covered won't drive me to a HULKSMASH rage (which would likely get me fired).

    It seems like the tech industry is lacking proper representation in the political arena. Aren't we at a point, as a group, where we should have sufficient financial resources to try to influence the politicians in the same manner the telcos do?

    If there's a PAC for the informed tech community, I don't know about it... and neither do the like-minded folks I know. It seems to me that it's important to bring the informed side of these issues into the open, and maybe there should be a lobbying group controlled by the technomasses.

    Just something I've been stewing on lately.

     

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      jupiterkansas (profile), Aug 23rd, 2011 @ 12:08pm

      Re: Fight lobby with lobby?

      The Electronic Frontier Foundation might be the best thing we've got, and Public Knowledge.

      But the tech industry hasn't had a century to embed itself in Washington the way the telecom companies have.

      Go watch "The President's Analyst" from 1967 and learn the truth.

       

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      Anonymous Coward, Aug 23rd, 2011 @ 12:10pm

      Re: Fight lobby with lobby?

      The big problem with lobbying is the money. Even if the tech industry gets lobbyists, who's gonna supply the money?

      Inherently this is what is wrong with lobbying. The average citizen has neither the financial support to do this nor the time when he has to make the bread and butter to support living.

      So Joe 6 pack winds up getting left out because he can't compete either financially from his personal income against a corporation nor can he compete time wise because he doesn't make his living doing lobbying.

      This is one of the source problems with why the nation as a whole isn't getting the attention it needs. The politician is protecting his/her money source by catering to them with the best laws money can buy.

       

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        Anonymous Coward, Aug 23rd, 2011 @ 1:28pm

        Re: Re: Fight lobby with lobby?

        No one should make a living from lobbying they should be capped at $15,080 with only personal dining expenses covered and travel expenses. If you are wondering were I got that number it is minimum wage at 40hrs for 52weeks.

         

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      Josh in CharlotteNC (profile), Aug 23rd, 2011 @ 12:17pm

      Re: Fight lobby with lobby?

      So instead of fixing the problem (corruption), you want to continue and even to contribute to it remaining a problem?

      No. Hell no. Let's fix the problem. It's the only rational response. I don't care about upsetting the apple cart. I don't care about unemployed politicians, lawyers, and lobbyists.

      Political corruption - 100% transparency, and vote them all out, over and over again, until they stop being corrupt. Broadband competition - force the telco and cable monopolies to compete in a real free market. Patents - get rid of them entirely. Copyright - get rid of it, or at least scale it back to something sane for a world where content can be transmitted to every corner or the world in seconds at near zero marginal cost. Companies with broken and obsolete business models - no legislation for you, tough cookies, adapt or die.

      Fix the problem.

       

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        Anonymous Coward, Aug 23rd, 2011 @ 12:50pm

        Re: Re: Fight lobby with lobby?

        "No. Hell no. Let's fix the problem. It's the only rational response."

        I agree, but how do you suppose we fix the problem? It seems like the first step would be to become a part of the system, then game said system.

        "Political corruption - 100% transparency, and vote them all out, over and over again, until they stop being corrupt. "

        THIS DOES NOT HAPPEN. People continue to elect openly corrupt officials, either through willful ignorance or apathy.

        Putting together a consortium of political activists with the intent of impressing up on the politicians and the public the other side of things might be a step towards fixing the mess we've got.

        It's a cleaner option than armed rebellion.

         

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          PRMan, Aug 23rd, 2011 @ 12:59pm

          Re: Re: Re: Fight lobby with lobby?

          "THIS DOES NOT HAPPEN. People continue to elect openly corrupt officials, either through willful ignorance or apathy. "

          Or, "because I'm a Democrat" or "I'm a Republican".

           

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          chris (profile), Aug 23rd, 2011 @ 1:26pm

          Re: Re: Re: Fight lobby with lobby?

          Putting together a consortium of political activists with the intent of impressing up on the politicians and the public the other side of things might be a step towards fixing the mess we've got.

          good luck fitting that on a bumper sticker.

           

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          ChronoFish (profile), Aug 23rd, 2011 @ 1:48pm

          Re: Re: Re: Fight lobby with lobby?

          This doesn't happen because even though Congress only gets a 25-30% approval rating, everyone likes "their" congressman.

          The surest way to piss off the American people is to bilk the American taxpayer for billions of dollars.

          The surest way to lose the next election is to leave billions of dollars of federal money on the table.


          -CF

           

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            ltlw0lf (profile), Aug 24th, 2011 @ 10:54am

            Re: Re: Re: Re: Fight lobby with lobby?

            The surest way to piss off the American people is to bilk the American taxpayer for billions of dollars. The surest way to lose the next election is to leave billions of dollars of federal money on the table.

            Done and done...and nobody was pissed off. *WE* paid for that bandwidth, in the form of higher taxes and tariffs, and were bilked out of billions of dollars from the telecom industry that instead spent the money on hookers and blow for the congressmen, and nobody lost their job.

            E911, broadband, information superhighway...all projects where congress handed the telecom companies billions, and their solution is capping our cellphones at 2GB or cable/DSL-modems at 250GB a month.

             

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          chris, Aug 24th, 2011 @ 6:46pm

          Re: Re: Vote them out

          It doesn't happen and I doubt it ever will. There are just too many issues that have to be somehow neatly divided between just two parties. What are the chances that all the issues one might care about are going to be aligned with a single party. Even if you make corruption the only election issue, you'll probably find it fairly evenly split between both parties, because it's a systematic problem. Forming opposing lobbying groups looks like a workable solution.

           

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        jupiterkansas (profile), Aug 23rd, 2011 @ 12:52pm

        Re: Re: Fight lobby with lobby?

        Sounds great! I'll get my lobbyists working on fixing the problem right away.

        Unfortunately none of your proposed solutions, while much needed, will ever happen, because the corruption has been legalized. You can vote them out, but who are you going to vote in? How will they get funded? What will stop them from being swamped by the same lobbyists? Where's the bill that's going to stop lobbying and corporate funding? And is there a single politician you believe when they say they're going to change the system?

        The people who won't take corporate money are the ones that aren't going to get elected.

         

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      Jay (profile), Aug 23rd, 2011 @ 12:29pm

      Re: Fight lobby with lobby? HELL NO!

      "Aren't we at a point, as a group, where we should have sufficient financial resources to try to influence the politicians in the same manner the telcos do?"

      Should anyone in the technology field really do this?

      NO. I have to put emphasis on this because it would be the technology industry becoming the very monsters they're fighting. This already happened to film, which consolidated into the MPAA. They once fleed from Edison's patents. Now they use copyright and legislation to try to control the markets they are in.

      "If there's a PAC for the informed tech community---"

      They become a much worse company overall. Google has lobbying representation on Main street. So does Rapidshare. With Google, it does what's in its best interests, not the consumer. And Rapidshare has since been replaced by other cyber lockers as it pursues an aggressive stance to copyrighted material.

      Of/By/4 by Larry Lessig explains in much better detail the problem of monetary influence affecting our laws.

      Another problem is what the Supreme Court has recently decided in regards to lobbyist spending. There's no spending limit for corporations. So it's no longer about better laws. It's about how much more money can be spent to get the laws your company wants.

      If we want to change how Main Street views legislation, it would have to be with a change in how the rules are made. But becoming a lobbyist will only keep the same system going instead of bring about better laws for society to flourish.

       

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    TDR, Aug 23rd, 2011 @ 11:57am

    Darth Vader "I am altering the deal. Pray I don't alter it any further."

     

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    smoothr, Aug 23rd, 2011 @ 12:04pm

    I would not be buying FIOS if it was not for Netflix

    This commentary completely ignores the fact that I pay "extra" for my FiOs connection to get the 20mbs (slow by global standards) provided to me from Verizon. I am not sure I would even bother with High Speed Internet in my home if Netflix/Hulu+/Pandora did not exist. I cut the cable bill for High Speed internet - I get local channels via digital Antenna for free (In HD) and pay for my broadband FiOs for High Speed Internet. My phone connection is fast enough to look up "yellowbook".

    Verizon would not have me as a customer if it where not for these streaming services so I think Verizon should have to pay Netflix and specifically Hulu for added value to their otherwise worthless service.

     

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      CommonSense (profile), Aug 23rd, 2011 @ 2:03pm

      Re: I would not be buying FIOS if it was not for Netflix

      I second that!!!

      Though, in my case it's Comcast that should pay Netflix and Hulu, because I would have cut them out completely instead of holding on to their Internet offering....

       

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    Anonymous Coward, Aug 23rd, 2011 @ 12:05pm

    This is the same sort of BS that the telecos have been trying to call a reason for caps. You know, the bandwidth hogs as they like to call them. The truth is there are no bandwidth hogs. You can get no more bandwidth than you pay for. You can't take someone elses bandwidth.

    What the real deal is that the teleco's haven't expanded their hardware. So they have oversold their resources. The answer to that is to get the customer to pay more. Either through higher prices or through less use.

    It's like you buy a candy bar but agree to only eat part of it and leave the rest on the shelf for someone else to buy. You see anything wrong with this picture?

     

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      Derek Kerton (profile), Aug 23rd, 2011 @ 1:32pm

      Re:

      While I'm generally on the Techdirt side of this argument, you are wrong.

      There are bandwidth "hogs", although I don't like to use the negative "hogs" because, like you, that currently is fair use according to their contracts. But there are people who use waaaay more than the average. And, yes, they can "take someone else's bandwidth." That's because for any given time, there IS a finite amount of bandwidth going to your CO or cable trunk line. If one user is using the max constantly, other users will see reduced speeds. I think reasonable caps or tiers of service are a legit, honest way to separate the heaviest users from the lightest.

      "Telco's [sic] haven't expanded their hardware." Such bollocks. Why do freelance consumer advocates, such as you, completely ruin their credibility with such demonstrably false lies? Do you have a citation? An educated view? Because, you're totally wrong. How did Sprint go to WiMAX without investment? How did cable ISPs go to DOCSIS 3? How did Verizon offer FiOS? FiOS originally cost $700 per house to connect (after upgrading core functionality). AT&T invested $19 Billion in networks in 2010. So STFU with the "they never invest" nonsense. Network operators such in so many true ways, there is no need to invent false ones.

      Here's a citation: http://www.neowin.net/news/atampt-to-invest-up-to-19-billion-on-network-upgrades

      "so they have oversold their resources".
      Yes. That is what all network providers MUST do in order to offer an affordable service. Think of the roads. We don't pave enough roads for everyone to drive at once; we make estimates of future usage, and try to build capacity to handle normal use, and to minimize congestion during peak hours. That is how telecom networks are built. This is not evil, it is engineering.

      With all that fail, I can't believe I'm on your side of this debate, but I am.

       

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        ChronoFish (profile), Aug 23rd, 2011 @ 1:57pm

        Re: Re:

        Screw fair use....If you advertise "unlimited" then you can't be mad because some uses it in an unlimited fashion. Period.

         

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          Derek Kerton (profile), Aug 23rd, 2011 @ 2:34pm

          Re: Re: Re:

          Never said different.

          But many ISPs have started to offer capped, not unlimited. Many offer different tiers. And more will go that way. I just hopes the caps are reasonable.

          Also, "unlimited" as it is normally sold is still "best effort", so if you're neighborhood is congested, you will experience less speed than sold.

           

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            Anonymous Coward, Aug 23rd, 2011 @ 5:52pm

            Re: Re: Re: Re:

            Thank God that only happens in America and third world countries(i.e. Canada) that lack proper competition in other places no ISP would dare do such a thing they would be left in the dust of history by their competitors.

             

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              Derek Kerton (profile), Aug 23rd, 2011 @ 6:49pm

              Re: Re: Re: Re: Re:

              Yep. We need more competition. THAT is the right way to keep companies in check.

              And don't assume that no capped packages would be sold in a totally competitive market. One would expect greater range of choices to meet customers' needs, some capped and some of which are unlimited. Unlimited would, of course, cost more than the capped ones.

               

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      •  
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        btrussell (profile), Aug 23rd, 2011 @ 2:39pm

        Re: Re:

        So, my internet comes through with the tv cable. Are people who leave their tv on all day bandwidth hogs?

         

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        •  
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          John Fenderson (profile), Aug 23rd, 2011 @ 3:38pm

          Re: Re: Re:

          No. Same cable, completely different system. Cable TV is broadcasting. There is not a unique cable TV signal just for your TV. It's the same signal sent to everyone. Two people watching the same channel don't use twice as much bandwidth in total. They use exactly the same amount. The person leaving the TV on all day isn't using any more bandwidth -- he's just displaying a portion of the signal that is already, always coming into his home. Just the same as watching broadcast TV or listening to the radio.

          Internet is different. Each user is unique and has a dedicated data stream. Twice as many users use up twice as much bandwidth.

           

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        •  
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          Derek Kerton (profile), Aug 23rd, 2011 @ 3:39pm

          Re: Re: Re:

          I've seen you around here plenty, you're not this ill informed, is ya?

          People who leave their TV on are no more bandwidth "hogs" than people who leave their FM radio on. Or people who leave it off, for that matter. Broadcast signals are sent, and consume the channel whether you pay attention to them or not.

          Unicast, or On Demand, or Streaming media uses the channel differently, consuming capacity on the shared network legs for one subscriber's payload.

          You'll note, for example, that streaming services like Pandora will throw up a prompt every hour or so with "Are you still listening? We pay for rights and bandwidth to offer you music, so we want to be sure you're still there."

           

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            btrussell (profile), Aug 24th, 2011 @ 2:47am

            Re: Re: Re: Re:

            I'm no expert like you. I'm just a dummy trying to learn too much.

            I've had disruptive service for months while ISP makes improvements. From their letter:

            "New Rates: We've enhanced your high speed internet service for a better internet experience.

            High Speed Internet Changes.

            Service name current:Standard New name: Turbo 14
            Download speed ~ up to 14Mbps New=same
            Upload speed ~ up to 1Mbps New=same
            Max GB included per month 60GB New=80GB
            Max over usage charge $30 New=$50
            Over usage rate/GB $1.50 New=same"

            This is the second time in two years my rates have gone up with them claiming improvements.

            The first time I called them up and asked them to name one benefit I received with even one of my three packages:TV, phone, internet(all three saw price increases). They could not provide one, so I dropped the tv. They then gave me reduced rates on the other two packages(they had seemed to think I was joking when I first told them I didn't watch tv. This is last year in Canada before netflix).

            So what did I get this time? For $2 more/mo. I can have unlimited bandwidth for $50 extra/mo. Before the improvements and the $2 increase/mo, I had unlimited bandwidth for $30 extra/mo. Fucking A! What a bargoon for this dummy!

            You go on and on about how caps are effective. I've already received my 85% and 100% usage notices for this month. Again. You seem to think $1.50/GB is stopping me from using internet for the rest of the month. Meanwhile, everyone on my ISP has caps enforced from 1st to last of month. It does not coincide with my/their bill payment date. So forcing everyone off at end of month, when obviously they could handle the traffic at the beginning of the month, saves bandwidth and ensures everyone gets same service? I don't see it. How do they handle all the traffic at beginning of month when everyone is worry free about caps?

            What about February when, looking at my plan, everyone gets almost a 1/3 of a GB more/day? 80GB in February, using average, is almost the same as 90GB in March. How do you explain monthly caps when months fluctuate by @ 10%?

            Can they handle 80GB in February? If yes, then why can't they handle 90GB in March?


            I have to add that I do get great service. My speeds check out at almost any time of the day, any day of the month.
            Having already surpassed my cap:
            http://www.speedtest.net/result/1447601414.png

             

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            •  
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              Vincent Clement (profile), Aug 24th, 2011 @ 1:28pm

              Re: Re: Re: Re: Re:

              The best part about that notice from Cogeco is that before the change that 20GB increase in the cap would have cost you $30 in over usage charges. After the change, the extra 20GB costs you a measly $2 more each month.

              And they have the nerve to continue to charge $1.50/GB of over usage, when they just increased your cap by 20GB for $2.00.

               

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              Derek Kerton (profile), Aug 24th, 2011 @ 2:54pm

              Re: Re: Re: Re: Re:

              Sorry. I interpreted your question as rhetorical.

               

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              Derek Kerton (profile), Aug 24th, 2011 @ 3:14pm

              Re: Re: Re: Re: Re:

              On the subject of my defense of caps, you say I go on and on...and I do...but you'd have to read some of what I wrote if you want to understand it.

              I defend tiers and caps as concepts, because there is nothing inherently unfair about them, nor even customer-unfriendly.

              However, they can be implemented well, or they can be implemented terribly. Usually, an ISP or telco falls closer to the latter than the former.

              Here's a list:

              Caps should not be hard caps. If you hit it, you should be able to continue using the Net at acceptable speeds, sufficient for VoIP and 911 calls. Say 128Kbps at least. That's called throttling.

              ISPs should be extremely proactive in notifying people of hitting thresholds like 50%, 80%, 90%, 100%. Their data on your current usage should be up to date (they are very weak at this), and you should have tools to tell you where you are (website, plugin, taskbar, widget, SMS, email).

              When you hit your cap, they should notify you of your options. They should NEVER block your Internet access. Options should include: buy up to next tier, use throttled speed for billing cycle, buy up for one month, pay per GB for overage.

              Overage GB prices should NOT be punitive (i.e. they should be LESS than the price for the first GBs). It should be a volume discount, not a penalty. It should be in increments NO BIGGER than 1GB. They should not force people to buy 30GB of overage when they go over their cap by 2MB.

              Caps should go with the billing cycle, not the calendar.

              People who use very little Internet should see their bills drop as a result of tiered services. AT&T did this right when they capped the iPhone data plans.

              -----

              So, my point is, caps CAN suck and be unfair. But caps can also be totally fair, and can help allocate the costs of re-investing in network enhancements to the people who use the network the most. In so doing, the network operators will have better incentive to improve the networks.

              And as for your personal ISP, it sounds like the recent changes are fair. They raised your cap by 20GB for $2/mo - that's a good deal (for anyone who uses it...a minor bad deal for someone who uses 5GB/mo). Your overage is $1.50/GB, which is probably near the $/GB you pay for the first 80GB, although you didn't say your rate. Not punitive, though. Your total liability for overages is limited to $50, which is worse than before. Obviously, their trying to make the heaviest users pay more.

               

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                btrussell (profile), Aug 24th, 2011 @ 5:29pm

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

                "What about February when, looking at my plan, everyone gets almost a 1/3 of a GB more/day? 80GB in February, using average, is almost the same as 90GB in March. How do you explain monthly caps when months fluctuate by @ 10%?

                Can they handle 80GB in February? If yes, then why can't they handle 90GB in March?"

                You didn't even look at this. At least didn't address it.

                "Caps should not be hard caps. If you hit it, you should be able to continue using the Net at acceptable speeds, sufficient for VoIP and 911 calls. Say 128Kbps at least. That's called throttling."
                I have no throttling of any kind. I am over my monthly limit already for this month. I posted my speed above. Are they gouging me for more money or are they slowing me down because of traffic?
                Here is another test, just after 8pm here:
                http://www.speedtest.net/result/1448834802.png

                So again, gouging me or shaping traffic? Since both my upload and download are above stated speeds.

                "ISPs should be extremely proactive in notifying people of hitting thresholds like 50%, 80%, 90%, 100%. Their data on your current usage should be up to date (they are very weak at this), and you should have tools to tell you where you are (website, plugin, taskbar, widget, SMS, email)."
                I get 85% and 100% notices. There is a website for checking usage. It is not as easy to access as it was a couple of years ago before they started charging for overages. Nor is it up to date. It is updated daily at @ 1pm, compared to before charging for overage when it was practically real time.

                "Overage GB prices should NOT be punitive (i.e. they should be LESS than the price for the first GBs). It should be a volume discount, not a penalty. It should be in increments NO BIGGER than 1GB. They should not force people to buy 30GB of overage when they go over their cap by 2MB."
                I am quoted a price in GB for overage, but they prorate it. If I go over by 1MB, it costs me $1.50/1024

                BUT, I did just get an extra 20GB/mo for $2, but overage is $1.50/GB.

                "Caps should go with the billing cycle, not the calendar."
                But it goes with the calendar, so is that effective? Not unless it is to gouge, then it is effective.


                "People who use very little Internet should see their bills drop as a result of tiered services. AT&T did this right when they capped the iPhone data plans."
                I've never seen anything but tiered service. I have been with Cogeco for eight years minimum. Tiers from the beginning, caps very recent.

                 

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                •  
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                  Derek Kerton (profile), Aug 24th, 2011 @ 8:27pm

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

                  Your first point,"1/3 GB more per day" etc. Sorry. I can't address that. I just don't understand what you're getting at.

                  I dunno what type of cap enforcement your ISP gives you. For now, most have a pretty bad policy of letting it ride for a month or three (that's good) but then sending a nasty letter implying you're a bad person, and that you should spend more with them or go away. They clearly are not throttling.

                  Sounds to me like Cogeco, like most others, has a fairly bad implementation of policy around their caps.

                   

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                  •  
                    icon
                    btrussell (profile), Aug 25th, 2011 @ 3:53am

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

                    "Sounds to me like Cogeco, like most others, has a fairly bad implementation of policy around their caps."

                    I guess that depends on what their goal is. If it is to limit heavy users as you claim, then yes it is poor. If it is to gouge, like I am saying and the reason why I disagree with you, then it works perfectly.




                    I can't explain the difference between the number of days in each month any better.

                    I am tired of pecking here to hear you dismiss my argument with "bad implementation." You are right, it isn't about money at all.

                     

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                    •  
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                      Derek Kerton (profile), Aug 25th, 2011 @ 1:44pm

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

                      Well, for me, and the general Techdirt editorial stance, a policy that treats customers badly or punitively is a bad business policy. Gouging customers fits that bill.

                      Business are tempted to gouge to meet short-term goals, get their bonuses, hit the numbers Wall Street (or Bay Street in your case) expects of them. However, we generally feel that that is BAD policy that harms the business long-term.

                      Pissing off your customers just ensures that your time as their vendor will be limited. As soon as another option pops up, your customers will leave you. They'll even leave for worse deals just out of spite.

                      I've been there. I worked at Ameritech (a Baby Bell) when the FCC opened the former monopoly local phone market to competition. There was an exodus.

                      "I am tired of pecking here to hear you dismiss my argument with 'bad implementation.'".

                      If you were hoping I could act as Cogeco customer service, or fix your beef with them in any way, you were barking up the wrong tree!

                       

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                      •  
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                        btrussell (profile), Aug 25th, 2011 @ 3:44pm

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

                        "If you were hoping I could act as Cogeco customer service, or fix your beef with them in any way, you were barking up the wrong tree!"

                        Who the fuck are you? Stephen Harper?

                         

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          •  
            icon
            btrussell (profile), Aug 24th, 2011 @ 3:01am

            Re: Re: Re: Re:

            "Dear Pandora Visitor,

            We are deeply, deeply sorry to say that due to licensing constraints, we can no longer allow access to Pandora for listeners located outside of the U.S."


            If you say so.

            You can tell them Canada is still here.

             

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      •  
        icon
        btrussell (profile), Aug 24th, 2011 @ 4:46am

        Re: Re:

        Reduce congestion.

        If everyone's commute takes one hour, how can we reduce congestion?

        How about we up the speed limit, thereby reducing time on the road by half. Now people are on the road for 1/2 hour, not an hour. Half the traffic on the road. Or move twice the traffic. Take your pick.

         

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  •  
    identicon
    Anonymous Coward, Aug 23rd, 2011 @ 12:13pm

    I saved money this week using Netfix's scheme!

    ... they play up how Netflix "saves" $0.40 in postage by not having to use the mail,

    By sending e-mail to my girlfriend instead of mailing her letters, I saved $12.60 this week alone!

     

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  •  
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    HavaCuppaJoe (profile), Aug 23rd, 2011 @ 12:33pm

    This whole argument is infuriating. The last mile bandwidth does NOT belong to the ISP. It belongs to the CUSTOMER WHO PAID FOR IT. They just want to sell the same bandwidth twice.

    In other industries there's a term for selling the same goods or products twice. The term is FRAUD.

    Discussing methods to perpetrate fraud as a group has a term. It's call CONSPIRACY.

    People who collectively discuss the perpetration are called CO-CONSPIRATORS.

    Sununu and Ford should keep this in mind when writing public documents advocating for fraudulent practices.

     

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  •  
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    Jeffrey Nonken (profile), Aug 23rd, 2011 @ 12:46pm

    Free rides

    By not paying for the roads, Ford Motor Company gets a free ride every time I drive my car.

    By not paying for the wires, poles and meters, GE gets a free ride every time I turn on a light.

    Eljer gets two free rides every time I flush the toilet. Bonus! Of course after trying to digest stuff like this it tends to get clogged. More free rides! Ace Hardware gets free rides too, they sold me the plunger.

    How much you want to bet John Sununu and Harold Ford Jr. never have to flush?

     

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  •  
    identicon
    dev, Aug 23rd, 2011 @ 12:51pm

    tubes

    the internet is a series of tubes, and netflix pays to put stuff into the tubes, and customers pay money to get stuff out of the tubes. Also customers and netflix paid taxes, some of which which was given to build the tubes.

     

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  •  
    icon
    AR (profile), Aug 23rd, 2011 @ 1:15pm

    Politicians are a joke

    Thats why they were Politicians and are now lobbyists. They dont have enough common sense to be politicians and enough business sense to make it in the real world.

     

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  •  
    icon
    viperfl (profile), Aug 23rd, 2011 @ 1:31pm

    A medium sized retail company I use to work for was paying around $50k a month for broadband services. This was broadband access for the corporate office, linking to all the stores, retail website, and warehouses.

    It's the basic analogy, "Did the chicken come before the egg?" Without the ISP, would there be an internet? With internet content, would there be an ISP?

     

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    •  
      icon
      John Fenderson (profile), Aug 23rd, 2011 @ 3:43pm

      Re:

      Without the ISP, would there be an internet? With internet content, would there be an ISP?


      There waas an internet before there were ever any ISPs. I was there, I remember. "Internet Service Providers" were invented to facilitate opening the internet to public use. Back when it was all government and universities, there were no ISPs.

      ...but there certainly was content!

       

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  •  
    icon
    benthic (profile), Aug 23rd, 2011 @ 1:37pm

    Dividends

    I demand that all the Internet Service Providers pay each and every tax payer a royalty check for their use of the technologies that are the basis of all their businesses, without which none of them would be in business and all of which were developed with taxpayer money.

    I also expect back payments all the way back to the founding of said companies along with interest on royalties and licenses fees that have not been paid to date.

    If any of these companies are associated with the MPAA or RIAA then they should be subject to additional penalties for "stealing" the afore mentioned technology.

    I think $750 per TCP/IP packet transmitted is fair based on the RIAA's own per infringement demands. http://ca.reuters.com/article/technologyNews/idCATRE7274O520110311

    $100,000 per infringement is clearly ludicrous and we are all reasonable people, I think $750 per infringement is clearly fair.

     

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    icon
    ChronoFish (profile), Aug 23rd, 2011 @ 1:39pm

    Just flip the argument

    When ever I hear this argument (that NetFlix, Google, et al) are getting a free ride, I like to flip the argument.

    How much should Google, NetFlix, etc, charge the ISP for access to their content?

    How dare ISPs connect to all this content and services, web sites, and web apps - FOR FREE!!!???

    Content providers should be charging the ISPs by the bitload!

    -CF

     

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    icon
    Derek Kerton (profile), Aug 23rd, 2011 @ 1:42pm

    The Whole Product

    In our MBA marketing courses, we learned about a concept called "The whole product".

    http://en.wikipedia.org/wiki/Whole_product

    The idea is that, for example, if you are an ISP selling Internet connections, there is NO VALUE to that product/service 'in and of itself'. However, because other companies are willingly offering complementary products, like content streams and websites, the "whole product" the ISP offers includes the content.

    Thus, the value of the ISPs' product/service is vastly augmented by the contribution of the content services. In short, ISPs owe companies like Google, Pandora, Yahoo, Amazon, and millions more a debt of gratitude for offering compelling services that make it worthwhile for consumers to pay ~$50 for a monthly broadband subscription. If it weren't for these great websites, people would have stayed on their $15/mo dial-up AOL accounts!!

    No consumer pays to connect to the middle of the Internet. They pay to connect to another end point, like Hulu. Meanwhile, the content companies are paying for their bandwidth. So we've already got a double dip scenario for the ISPs.

    Therefore, the ISPs are charging twice for their service, AND getting a free ride from the content companies who are building their whole service. They should sit down and be quiet.

     

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    ArkieGuy (profile), Aug 23rd, 2011 @ 1:43pm

    AOL "Capped" Bandwidth

    Of course we have to keep in mind that the current providers of Internet are not likely to be the providers in 20 years.... Think about it, AOL (for those that don't know, used to be an ISP of sorts) capped bandwidth in the early '90s. Who would consider them an ISP today?

    If service providers don't keep up with technology, some newer more agile company will (Google fiber maybe).

     

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  •  
    icon
    Derek Kerton (profile), Aug 23rd, 2011 @ 1:49pm

    Mike, Raise The Ante

    Mike,

    To make the offer a little sweeter, and the hypocrisy a little more obvious, why not offer money to Sununu or Ford. You see, of course Netflix has an Internet bill...even the average Joe pays $35/mo. Why should Sununu pay somebody's bill? Just because you challenge him, it doesn't show his dishonesty because nobody can see why he has any incentive to accept your offer.

    So to make the point, OFFER Sununu $1,000 if he simply pays Netflix's "free" ISP bill. Heck, I'll even go $500 of that if you go the other half.

    In fact, why not do a fund-raiser using some of the crowdsource tools you know. Set an upper limit, say $10,000. Then offer Sununu the $10k to pay their bill. Let everyone get involved. Then, it will be more obvious that he is lying if he doesn't take the "easy free money". Netflix might even get involved, or put a grand towards the "prize".

    If Sununu accepts (unlikely), but Netflix doesn't get involved, or doesn't accept the money, then we could plan to offer it to the EFF or such. Either way, I think our money will be pretty safe!

     

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  •  
    icon
    Pwdrskir (profile), Aug 23rd, 2011 @ 3:05pm

    Helpful Tweet

    @OpenSecretsDC OpenSecrets.org

    '8 in 10 lawmakers lack education in economics' according to new study,
    @politico reports: http://politi.co/ndzayO

     

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  •  
    icon
    That Anonymous Coward (profile), Aug 24th, 2011 @ 7:02am

    Someone please explain to me why this group needs to worry about teh interwebs.

    Architectural Ceramic Products
    Maybe they want us to go back to ceramic insulators on the lines?

    I was looking over the membership list of Broadband for America which is the group these 2 people are fronting for.

    I wonder how many of them we could tick off from the pile of astroturfed letters that get sent out on letterhead of "concerned groups" that they keep in a file.

    http://www.broadbandforamerica.com/about/members

     

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  •  
    icon
    jupiterkansas (profile), Aug 24th, 2011 @ 7:26am

    Most of them look like business associations or telecom companies.

    but the Ohio Soybean Association?

     

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


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