ISPs Are Now Forcing Cord Cutters To Subscribe To TV If They Want To Avoid Usage Caps

from the damned-if-you-do dept

We've noted time and time again how broadband usage caps on fixed-line networks are arbitrary, unnecessary, and harm innovation. They're also a useful weapon against streaming video competitors, and the natural evolution of TV competition. Caps can be used to either punish users who try and cut the cord with higher prices, but they also allow ISPs to exempt their own streaming services from said caps (something currently being done by both Verizon and Comcast), thereby giving these services a distinct and unfair advantage in the market.

But broadband ISPs are now coming up with a new way of attacking cord cutters: forcing them to subscribe to television if they want to avoid usage caps.

Back in January, AT&T announced that the company would be happy to remove usage caps on its wireless network, but only if you subscribe to DirecTV or U-verse TV service. Then last month, AT&T carried this idea over to its fixed-line broadband network, announcing that it would be imposing new usage caps on its broadband users starting May 23. While AT&T says it will generously allow users to pay $30 more per month to avoid usage caps entirely, it also announced that users who subscribe to its TV services will be able to avoid usage caps entirely.

This month, an Oregon company by the name of Bend Broadband followed suit, informing its users that it would be happy to remove its usage caps (ranging from 150 GB to 500 GB), but only if users subscribe to television service. Bend offers up a misleading explanation for why caps are necessary in the first place in a company FAQ:
"The continued migration of Netflix usage from mailed DVD to Internet streaming/download, as well as other data intensive uses of the Internet, are impacting all providers of high-speed Internet service. While we certainly acknowledge and appreciate that content rich services like Netflix make our high-speed offering more valuable to the end user, the volume of data associated with this content drives significant incremental investment in the network and the need to purchase more bandwidth in order to maintain the user experience and this must be funded."
Right, but that's bullshit. U.S. residents already pay some of the highest prices for broadband in the developed world; money that any earnings report will clearly illustrate is more than enough to offset what at this point is only modest network upgrades. As one cable CEO recently noted, most of the heavy investment is over, and the name of the game now is milking these uncompetitive markets for all they're worth until either broadband competition magically sprouts from the ether, or regulators wake up from a deep slumber and shut down the price gouging party.

Usage caps on fixed-line networks are nothing more than rate hikes on uncompetitive markets, and anybody claiming otherwise either has been swindled by a good salesman, or is selling you something themselves.

There's absolutely nothing good about this trend. ISPs are using a lack of competition in the broadband space to impose usage caps. They're then using caps to force subscribers to sign up for TV services they may or may not actually want. It's a mammoth, misleading and anti-competitive abuse of two markets simultaneously, all sold to consumers under the lie that ISPs need even more revenue to keep funding unprecedented investment and innovation. In reality, the entire push may just be one of the largest cons ever perpetrated on consumers in the modern communications era.

Filed Under: broadband, bundling, cord cutting, data caps, isps, tv, tying, usage caps


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  1. identicon
    Anonymous Coward, 13 May 2016 @ 6:33am

    What they are actually saying

    If you keep paying for our legacy service, at whatever tier we decide, we will ignore your usage of Netflix etc., otherwise we will extract as much or more from your wallet by imposing data caps.

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

  2. identicon
    Anomynuos Crowad, 13 May 2016 @ 6:36am

    So far Comcast hasn't put caps in my area. If they do this, I'm going to be pissed. But guess what, I'll have to pay up since there isn't another alternative for internet access for me. Unless you count the abysmal Verizon-now-Frontier DSL service. And since I happen to be in Florida we can't even be sure it's working right now.

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

  3. identicon
    ThatOneOtherGuy, 13 May 2016 @ 7:00am

    Lawsuit time

    Usage caps are extortion, plain and simple.
    Since almost every Cellular and Internet provider are going this way, I think it's time we urge our State and Federal AGs to go after them via the Rico act.

    Extortion is as extortion does, and this is just plain extortion.

    Either you pay us for something you don't want, which will cost you a mega-bundle, or we'll charge you a not-so-mega-bundle for not charging you the mega-bundle.

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

  4. identicon
    Brian, 13 May 2016 @ 7:05am

    AT&T Uverse Doing it

    Just received notice from UVerse that they will be increasing my Internet Data Allowance (yea!) but giving me a $30 credit because I have TV bundled (huh?). So... you have just threatened to raise my Internet rates $30 if I cut the cord?

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

  5. identicon
    Anonymous Coward, 13 May 2016 @ 7:08am

    Isn't this the very definition of Product Tying? Using a monopoly position in one market to force the purchase of an unrelated product?

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

  6. identicon
    Anonymous Coward, 13 May 2016 @ 7:10am

    IMO wireless is a different animal than broadband. Physical and regulatory restrictions put much more limitations on network saturation than fiber.

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

  7. icon
    John Fenderson (profile), 13 May 2016 @ 7:11am

    What's the price difference?

    Let me take off my political hat for a moment and put on my business hat. What's the price difference between paying the $30 monthly penalty and paying for the bundled TV?

    If the bundled TV costs more, then the cable companies are attempting to penalize its customers even more than they originally planned.

    Sounds like a "fuck you" to me.

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

  8. identicon
    Anonymous Coward, 13 May 2016 @ 7:12am

    The wrong person

    I wish they'd eventually piss off a person to the point of committing an irrational, extremist, illegal act against the company.

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

  9. icon
    NeghVar (profile), 13 May 2016 @ 7:14am

    Re: Lawsuit time

    It will not happen. Too many people in our government are in bed with big ISP for any change to take place. Radical actions may be the only option left.

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

  10. identicon
    Anonymous Coward, 13 May 2016 @ 7:21am

    This sounds like a good reason for advertisers to make a fraud complaint. They pay for advertising based on the expected number of viewers, which is at least partially based on the number of TV subscribers. If people are subscribing to TV just to avoid usage caps then the advertisers are being charged for them even though they will never see the ad. Seems like this may anger people who write very large checks as opposed to the peon subscribers.

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

  11. identicon
    Anonymous Coward, 13 May 2016 @ 8:01am

    Re: The wrong person

    Found the future cause of yet another subpoena to TechDirt! :)

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

  12. identicon
    Anonymous Coward, 13 May 2016 @ 8:07am

    How does data compare?

    So how much data does a digital tv signal make up? How does my internet data compare to a tv signal, other than the internet also transmits as well as receives. How do they justify I can leave my tv on an HD channel and not incur data caps but if I want to watch hulu or netflix then I start wracking up usage caps?

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

  13. identicon
    ThatOneOtherGuy, 13 May 2016 @ 8:10am

    Re: Re: Lawsuit time

    Unfortunately, you may be correct, though I'm not sure what kind of radical action we could take that doesn't turn anyone into "criminals" like the ISP/Cell companies are.

    Finding the names, phone numbers and e-mail addresses of the senior officers and board of directors of those companies and making them public so that "we the people" can make our "displeasure" clear to them might be one way.

    If they start receiving thousands of e-mails and phone calls stating something simple like "We are against your 'usage caps policy' and will continue to call and e-mail until that policy is changed."

    As long as no one gets verbally abusive, and they remain polite on the calls, while a nuisance, I can't believe that the police are going to hunt down every person making the calls / sending the e-mails.

    We could also all reach out to our congress-critters both state and federal levels to let them know of our displeasure.

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

  14. identicon
    ThatOneOtherGuy, 13 May 2016 @ 8:13am

    Re: Re: The wrong person

    you beat me to it...

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

  15. identicon
    ThatOneOtherGuy, 13 May 2016 @ 8:16am

    Re: How does data compare?

    The TV doesn't even have to be on, it's the "cable box" that receives the signals, sends control information, etc..

    If the cable box isn't smart enough to send a "stop" signal to the local distribution hub, it could be receiving the datastream 24x7, which would be a rather large amount of data, even with compression.

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

  16. identicon
    JeffR, 13 May 2016 @ 8:19am

    Monopoly

    Where's the fun in being a monopoly if you don't abuse your monopoly?

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

  17. identicon
    Anonymous Coward, 13 May 2016 @ 8:32am

    Re: Re: How does data compare?

    With cable TV, the same stream on the cable is received by every box, so they only have the same number of streams as TV channels. With Netflix etc. their is an independent stream to each viewer, so it is possible that the same house will have two or ore streams of the same program, just time shifted slightly. Several hundred people streaming video on demand take up as much bandwidth as distributing several hundred cable channels to thousands of homes.
    However, the real issue is cord cutting, and unless the ISPs start insisting on a quota of viewing of their channels, the viewer figures will drop, along with the value to the advertisers, even if they keep up the subscription numbers.

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

  18. icon
    Lesath (profile), 13 May 2016 @ 8:36am

    Yet another reason I will never use AT&T.

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

  19. identicon
    Anonymous Coward, 13 May 2016 @ 8:53am

    Re:

    Broadband is defined by throughput and "always-on". The physical medium used to deliver the bits is irrelevant.

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

  20. icon
    Derek Kerton (profile), 13 May 2016 @ 9:10am

    "Right, but that's bullshit. U.S. residents already pay some of the highest prices for broadband in the developed world; money that any earnings report will clearly illustrate is more than enough to offset what at this point is only modest network upgrades"

    It's not bullshit. You are conflating two things:

    1) There is not enough competition, there is monopoly or duopoly, so ISPs abuse that power to charge high rents. That's also true.

    2) More data traffic does not cost more money for the ISP. That's false.

    The problem, as always, is just #1. US customers pay too much regardless of caps, and we do so because of a lack of viable competition.

    Caps, by themselves, are not wrong. They are just a part of the service offering limiting how many trips you can make to the buffet table. If ISPs want to impose them, that's just their right as they design and shape their product.

    When Taco Bell sells you a 12oz drink to go for $1...it could have been 16oz, or it could have been unlimited fountain drinks. The fact that they offered just 12oz at a buck is a cap, and it's not unfair. It's just the shape of that product offering.

    What I'm saying here is very unpopular on this site, but be sure to understand me correctly:

    a) YES, many ISPs are using caps in an anti-competitive way, to reduce the viability of competing video services that run OTT. This is wrong, an monopoly issue, and fodder for the FTC.

    b) There is nothing inherently wrong with caps, and they even have a fundamental fairness and logic to them, in that: customers that use more should pay more, and should fund the next round of capacity investment.

    c) Of course consumers, and Techdirt readers, don't like caps. Who wants a limit applied to them. But the discussion isn't about what we want or feel. It's about economics and policy.

    d) Yes, caps limit innovation. But so does any resource that is not infinite. Bandwidth is NOT infinite, so the fact that a scarce resource constrains innovation is the correct outcome. It is not the only such limit. Things like Human Resources, money, waking hours, and available technology ALSO limit innovation. Doesn't make it wrong. In fact, much the opposite, treating a scarce resource as "free" would result in the wrong economic allocations.

    e) I agree 100% with Karl that the ISP that caps traffic should not be allowed to exempt their own content from that cap. This is clearly an unfair monopoly practice of service-tying.

    f) I agree that more competition would reduce the use of caps. More competition is needed.

    g) Stop hating on caps. Start hating on any anti-competition use of caps.

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

  21. identicon
    Anonymous Coward, 13 May 2016 @ 9:11am

    Re: Re:

    >The physical medium used to deliver the bits is irrelevant.

    RF spectrum is limited by the laws of physics and the laws of man. You can't create more of it.

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

  22. identicon
    Anonymous Coward, 13 May 2016 @ 9:14am

    Re: How does data compare?

    Digital cable has its own bandwidth allocation and is distributed via QAM, not over the internet. It's apples and oranges.

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

  23. icon
    Derek Kerton (profile), 13 May 2016 @ 9:14am

    It's No Bullshit

    "the volume of data associated with this content drives significant incremental investment in the network and the need to purchase more bandwidth in order to maintain the user experience and this must be funded"
    --Bend Broadband

    "Right, but that's bullshit. U.S. residents already pay some of the highest prices for broadband in the developed world; money that any earnings report will clearly illustrate is more than enough to offset what at this point is only modest network upgrades"
    -- Karl

    It's not bullshit. You are conflating two things:

    1) There is not enough competition, there is monopoly or duopoly, so ISPs abuse that power to charge high rents. That's also true.

    2) More data traffic does not cost more money for the ISP. That's false. There are annual billions spent on infrastructure upgrades, equipment upgrades (CapEx), and truck rolls, energy use, network payments to Tier 1 carriers, staffing, maintenance (OpEx). The amounts spent are related to the amount of data traffic the network carries. MORE TRAFFIC COSTS MORE.

    The problem you're feeling, as always, is just #1. US customers pay too much regardless of caps, and we do so because of a lack of viable competition.

    Caps, by themselves, are not wrong. They are just a part of the service offering limiting how many trips you can make to the buffet table. If ISPs want to impose them, that's just their right as they design and shape their product.

    When Taco Bell sells you a 12oz drink to go for $1...it could have been 16oz, or it could have been unlimited fountain drinks. The fact that they offered just 12oz at a buck is a cap, and it's not unfair. It's just the shape of that product offering.

    What I'm saying here is very unpopular on this site, but be sure to understand me correctly:

    a) YES, many ISPs are using caps in an anti-competitive way, to reduce the viability of competing video services that run OTT. This is wrong, an monopoly issue, and fodder for the FTC.

    b) There is nothing inherently wrong with caps, and they even have a fundamental fairness and logic to them, in that: customers that use more should pay more, and should fund the next round of capacity investment.

    c) Of course consumers, and Techdirt readers, don't like caps. Who wants a limit applied to them. But the discussion isn't about what we want or feel. It's about economics and policy.

    d) Yes, caps limit innovation. But so does any resource that is not infinite. Bandwidth is NOT infinite, so the fact that a scarce resource constrains innovation is the correct outcome. It is not the only such limit. Things like Human Resources, money, waking hours, and available technology ALSO limit innovation. Doesn't make it wrong. In fact, much the opposite, treating a scarce resource as "free" would result in the wrong economic allocations.

    e) I agree 100% with Karl that the ISP that caps traffic should not be allowed to exempt their own content from that cap. This is clearly an unfair monopoly practice of service-tying.

    f) I agree that more competition would reduce the use of caps. More competition is needed.

    g) Stop hating on caps. Start hating on any anti-competition use of caps.

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

  24. icon
    Derek Kerton (profile), 13 May 2016 @ 9:15am

    Re:

    shit. double post. no delete. argh.

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

  25. identicon
    Anonymous Coward, 13 May 2016 @ 9:17am

    Re:

    g) Stop hating on caps. Start hating on any anti-competition use of caps.

    Distinction without a difference.

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

  26. identicon
    Anonymous Coward, 13 May 2016 @ 9:39am

    Re: It's No Bullshit

    More data traffic does not cost more money for the ISP. That's false. There are annual billions spent on infrastructure upgrades, equipment upgrades (CapEx), and truck rolls, energy use, network payments to Tier 1 carriers, staffing, maintenance (OpEx). The amounts spent are related to the amount of data traffic the network carries.,

    Mostly bullshit.
    Infrastructure upgrades is partly driven by demand for the Internet, but is also part of providing a service.
    As for the rest:
    Regular equipment replacement, which automatically upgrades the equipment due the the way electronics develops, is part of the operating costs, and independent of data usage.
    Low power electronics consumes the same power whether is is idle or carrying traffic. and newer equipment uses less power.
    most truck rolls are due to weather events, backhoe incidents, and vehicles hitting poles, and so have no relationship to the amount of data being carried.
    If the usual peering arrangements apply, the ISPs are not charged for excess data delivered to them, but rather the originator bears the cost. Further content delivery networks greatly reduce the traffic on, and costs of tier one network usage.
    Further, as the the "we will not charge you extra if you subscribe to cable" shows, they are more worried about their legacy cable business than the actual cost of providing Internet services.

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

  27. identicon
    Anonymous Coward, 13 May 2016 @ 9:45am

    Re:

    I'm with Derek on this. After digging into the financials for the parent company of Bend Broadband (which also owns US Cellular, FWIW), I see a company that reinvests a substantial amount of its net cash flow back into its infrastructure. In the first quarter, the company basically had no earnings. Add back non-cash expenses like depreciation and this $9.4 billion dollar company generates an annualized $260 million in free cash flow (not profits). That's about 3% of the company's assets. Not exactly the kind of "excess returns" you'd expect from a price gouger. I can get more than that from an investment-grade bond fund with a helluva lot less risk.

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

  28. identicon
    Anonymous Coward, 13 May 2016 @ 9:50am

    Re: Re:

    I suppose the thought that for a small company, growing the business can be more important than making a profit?

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

  29. identicon
    Anonymous Coward, 13 May 2016 @ 10:17am

    This week I tell AT&T what I think of their caps with my wallet. I'm not paying extra for a tv service I don't have a tv for nor want. AT&T is not giving me something extra but it amounts to an increase of double the price for the service.

    AT&T is not meeting the FCC definitions of broadband. They have over valued their service and it is not worth the price they are demanding to continue service with them.

    I will change to another ISP and tell AT&T where they can put it.

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

  30. identicon
    Anonymous Coward, 13 May 2016 @ 10:18am

    Re: Monopoly

    I think you mean: Where's the fun in being a monopoly if you don't abuse your subscriber base while claiming they have choices?

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

  31. identicon
    Phletch, 13 May 2016 @ 10:23am

    Re: Comcast caps

    We discovered Comcast had capped our service (300GB) last month when we started getting little boxes injected into HTTP responses telling us we were at 90%. Sucks.

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

  32. icon
    NeghVar (profile), 13 May 2016 @ 10:54am

    Re: Re: The wrong person - thought police

    How many people out there have thought or mentioned doing terrible things against those one's hates but do not do it because it is illegal and immorale? I'm sure there are millions of people in which such irrational acts have come to mind but never do them because they are wrong.

    What of authors and movies in which the story portrays such an act? Are they held accountable if someone commits the acts mentioned in the book or movie?

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

  33. icon
    David (profile), 13 May 2016 @ 11:13am

    I just got this in the mail

    I already subscribe to "Broadcast Channels Only" because the TV Reception stinks in my area, and I can only get 1 channel. I don't watch it much.

    I got a notice from AT&T UVerse that I am getting the Unlimited Usage for free, because I have the TV Plan (A $30 value!)

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

  34. icon
    TruthHurts (profile), 13 May 2016 @ 11:26am

    Anyone hit by this needs to contact their States AG

    You pay XYZ, LLC, for XXMb/S download XXKb/S upload bandwidth.
    Multiply each by (( 60 * 60 * 24 ) / 8 ), and that's how much "bandwidth" you've paid for.

    Anything less than that is breach of contract.

    Everyone knows that you'll never hit that number constantly, but it gives a good number to compare to.

    Usage caps below this number illegally limit the service you've paid for.

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

  35. icon
    got_runs? (profile), 13 May 2016 @ 12:31pm

    regulators wake up from a deep slumber and shut down the price gouging party

    Those regulators are on the ISP payroll. No telling how any checks they get in the mail.

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

  36. identicon
    Anonymous Coward, 13 May 2016 @ 12:58pm

    Time to share the account with the neighbours

    Time to share the account with the neighbours.

    In the past we got email, ftp, news and other services on top of the internet access. With gmail, yahoo or startmail, the only thing needed from the ISP is the connectivity.

    Time to share the account with two or three neighbours!

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

  37. identicon
    Anonymous Coward, 13 May 2016 @ 3:31pm

    And then you wonder why the FCC and others want to regulate all wire/wireless services. This will continue to get worse until someone puts the clamps on them. Typical corporate behavior.

    My real problem is that I don't own a TV set. I have 5 PCs but no TV. Don't need one, don't want one. When I had cable TV service I used it on average once or twice per month. Figured it was an unnecessary expense.

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

  38. identicon
    Anonymous Coward, 13 May 2016 @ 3:35pm

    Re: Time to share the account with the neighbours

    You should know better. Each device on the cable has it's own NIC, which must be reported to the ISP to activate it. The only way that's gonna work is if you set up a wireless network at your house, and set your neighbors up as users ON THAT NETWORK! Which gives them access to your machine. Not good.

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

  39. identicon
    Anonymous Coward, 13 May 2016 @ 6:06pm

    Got rid of the phone because of the thieving telecoms and the spooks. I imagine I will survive just fine without the Internet in the house.

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

  40. icon
    AEIO_ (profile), 13 May 2016 @ 6:50pm

    Re: How does data compare?

    I assume you're asking a actual question here. Let's take the long road; the details are insightful. Sorry it's a bad version of "War and Peace".

    TL;DR: they're trying to increase profits because they can, and watching internet "outside" data actually INCREASES their net costs.


    A) Anything that lets them earn more profit is good. Raising prices or bundling does that, as long as the costs for any new thing doesn't exceed the updated price. (And if so, just raise the selling price.) Alternatively, holding prices steady while cutting costs works as long as everyone puts up with it.

    THAT is the primary crux of their argument. We'll make you buy more and pay more, period. Whatever it is doesn't matter.


    B) NOW to the interesting part. I'll pick on Hulu and Netflix and the Duggars but the comparison is the exact same for literally ANYONE.

    Let's start a isolated home network. Poof, you have computers, routers and (virtual?) cabling connecting everything. The computers can share data between the others, or not. Bandwidth is "free", after you've spent the money to buy and install the cables and routers -- ignoring depreciation/replacement, insurance, and power costs. (Lightening strikes happen, and utilities aren't free. But they're fairly stable and cheap, so let's call these operating costs free. Equipment costs are $HARDWARE/(3*12) or maybe 5*12.)

    Let's assume we're the Duggar family with 24 kids. Each has an hour a day to use their separate computer (and thus the network.) A nice, steady bandwidth load that matches just what we've installed.

    Now let's bring up a media server -- http://plex.tv (Or Emby. Or Kodi, or MediaPortal / Myth / whatever.) Rip your legally purchased DVD/BRs and place the files on a server (and go to jail because that's highly naughty, you bad pirate!) and now you have more to share besides cooperatively editing homework files between adjacent rooms. The kids start watching cartoons an hour a day. Server space for the DVD files increases, network load increases. But it's all good and quite manageable.

    Now you have upgrade growth costs when the kid in the bedroom completely saturates the link to a computer every day. More capital investment in more computers, routers, and wires, and management and maintenance. (But he's only supposed to be watching TV an hour a day, not all 24! He's using 24 people slots, the slacker! Spankings for you!)

    So I have to upgrade my equipment because my kids (customers) are using more than their fair share. If they *all* do, then instead of 24 hour-slots I now have 24x 24 hour-slots. Damn kids, they're not supposed to be using computers while they sleep, only while they're awake and physically ON the computer. (When I originally said "Unlimited Usage" I meant YOU, not your COMPUTER. You're supposed to just know what I meant, even if I change the terms long after the fact.)

    But it's still all manageable. You let bandwidth increase and overload until they kids gripe enough, and then you buy more routers, cables, and servers if necessary. Oh, and more DVDs too. Don't forget you have to provide that media from somewhere -- it costs and takes time to purchase, convert, and so does adding storage space.

    As a matter of fact, that's just SO MUCH of a hassle that you decide to outsource it. You add a special computer connected to a satellite receiver dish that can receive (and then broadcast on your local network) movies that someone else has encoded for you. Heck, they can even start sending real-time video down that pipe that your kids can watch.

    Everyone's happy. The kids are using their computers 1-24 hours a day, network load is manageable with a few peaks now-and-then, your local Plex media server is supplying movies while the dish receiver is feeding the Plex server movies as well as handling real-time shows.


    THIS configuration is IMPORTANT. Notice you have a CLOSED NETWORK: the users can only receive what they themselves can provide AND the media sources that YOU provide. Costs are controlled by what you store on the media server and the dish (what you purchase from your media provider.)


    In particular, notice you're watching a show (ie, copying a file) with a specific size (ignore stuff hat changes the size/quality during transmission) that comes from plex/dish over the wires through the routers to your computer. THAT'S A KNOWN STATIC COST: the purchase of the actual media and the operating costs of running the network. Power isn't $0, and capital certainly isn't $0 either -- buy they're amortized and mostly fixed.

    (Gee, this sounds like Cable-TV 30-odd years ago. I wonder why?)

    Now on to the Hulu/Netflix stuff: let's take our Duggar 24-user home network and add a second router that now goes to: the Internet.

    You're paying for that new outside connection either by: $/byte, or flat fee unlimited usage or ... peering.

    What?!? WTH is PEERING?!!? (http://lmgtfy.com/?q=internet+peering) In a nutshell: it's a gentleman's agreement between big regional internet companies that let's THEM swap data back and forth.

    Why is that important? Because "The Internet" and "The Cloud" doesn't actually exist -- it's just a bunch of independent big, medium, small, and tiny parts all working together, all owned by independent entities.

    (The names below have been changed to protect the guilty.)

    If you're physically in NY watching a movie physically located in LA, your PC connects to your (tiny) home network to your ISPs router, which then sends data from your small (suburb) ISP to it's medium regional (state) provider, which sends your data to IT'S upstream big provider (time zone). Now, this big provider talks to systems within it's own EST timezone. But there's a large pipe between EST and CST, and CST and MST, and MST and PST, and LA's located in PST.

    So the four large timezone providers got together and all agreed: You know what? We all have a whole bunch of data running around. We all talk to each other all of the time. These humongous monthly bills we keep sending and paying to each other is ridiculous. I pay you a heap of money, then you turn around and pay most of it right back to me.

    SCREW this monthly billing money sloshing around, we're tired of it. Everyone keep track of what you send and receive to everyone (Remember, there are only 4 of them in this example, and EST doesn't touch PST. So it's not hard to figure out what goes where: as a provider, if it comes in either I keep it myself or pass it on.) SO: once a month, they all get together, compare and subtract their numbers, and THEN pay for what they've truly used. If EST and CST both ship 5 PB between them, they call it even. If CST ships 1 PB more to MST than it does, MST bills CST for 1 PB of actual usage.

    Makes sense? The big-a$$ providers, who swap data between themselves all day long, have a THIRD way of paying for their usage. Even though they might be sending Petabytes of data per second, as long as they receive the same amount from the same source they just call it even.

    (Up until a year ago, the Duggars could probably enter a peering group on their own recognizance. Not anymore though. Oops -- fame is so short-lived.)

    Back to the Duggar's net internet link.

    Let's watch a brand new show: "Forget About the President: The Stupidest People in Congress Talk to Their Even Stupider Electorates." It's an hour long with 535 episodes, each one taking exactly 1 hour and 1 GB of space and bandwidth.

    If it comes in over the dish link, we're just paying known standard media and transmission fees, and each computer receives exactly 1 GB of show over our internal network.

    If we've stored it on our media server, we've paid to receive the show and have to pay for the physical storage to store it. (And this media server, Plex or whatever, allows us to watch Video On our computers whenever we want or even on ... Demand. Gee, does a Video On Demand service sound familiar within an ISP?)

    But notice that actually watching the show uses 1 GB over the internal routers and network while payment for the media is done once and is effectively "free" from then on (And then maybe a yearly charge for longer access for popular shows -- shades of movies Net and Leaving Netflix anyone?)

    Notice that bandwidth cost ISN'T free -- $0 -- but it's mostly a static cost. More hardware = more capital tied up = more installation charges = more bandwidth cost, but it's still mostly a static cost. You provision up to the average load, and allocate more when necessary / tired of complaints about sluggishness. Or, maybe not.



    AND NOW COMES THE FUN PART: LET'S WATCH HULU. (You've been waiting for this, haven't you -- right? Anyone still here? Hello???)



    Same show, same 1 GB size. But notice the route: suddenly we're hitting that new Internet router. HEY WAIT! They're BILLING us for that! The more we use the more they want to bill. What, do they think we're made of money? And even worse: it's not even a static bill -- it changes over the amount people watch.

    So now I'm PAYING for a service that I provide (you can watch the show on my server, if it's still there, that is) and I'm not even getting anything out of it. Any payment there goes to Hulu -- NONE of that goes to me, and I'm even PAYING for them to access it. That's not right; that's just not right. Hulu is completely ripping me off -- and my kids/customers? They're not giving me any money either, they want bandwidth to support this thing. And they tell their siblings, and now THEY want even more bandwidth. Ungrateful whelps.

    Let's put that exact show on Netflix. And the exact same thing happens, they're absolutely no change to anything except that the name on the outgoing check still isn't to *ME*, the one that provides all of their bandwidth.

    Netflix, though, in the past tried to be a good neighbor. Netflix, at their own expense for a large enough provider, will set up and remotely manage a Netflix media server: one that holds tens of thousands of movies. There's still some internet access -- Netflix has to update the movies there somehow -- but it's only once per show, not one per time. The people (and computers) watching shows on Netflix talk to this box if possible, and fail back to Internet-Netflix if the show isn't available.

    So our 1 GB Politician show now runs over our local network again. Netflix is using our internet bandwidth to update their boxes, the users are using our internet bandwidth to watch non-popular shows, everyone's ALWAYS using our internal bandwidth, and we might not be making any money on this Netflix deal but we're not losing it as much as over Hulu, who ALWAYS goes out and accesses The Internet.

    So: Netflix mostly only uses the ISPs internal bandwidth while Hulu always uses The Internet and forces egress charges.

    So in summary for watching our special 1G show: A 1GB show ... is a 1GB show ... is a 1GB show.

    As long as the data is stored (sourced) somewhere on our internal network, the cost to us is effectively $0. And you pay for access!

    Netflix, even though it's on our internal network, uses our internal bandwidth, some of our internet bandwidth and doesn't bother to pay us anything -- the losers!

    Hulu ISN'T on our internal network and forces an Internet egress charge on every show that gets watched. Not only are they not paying us money, they're effectively CHARGING us for the privilege. Same with YouTube. Gaaa! THIEVES, ALL OF YOU!!

    The Internet is only to be used for blogs and emails and Facebook. Something nice and small and not-heavily used, with text and static pictures even better.

    High bandwidth things like movies need to be locally sourced and stay only on our internal networks and not egress outbound that costs money.

    Anything that costs us money is bad if it doesn't have a corresponding profit source. We've worked hard for our monopolies, and any high-bandwidth thing actually located on the real internet is costing us money. Even Netflix, located ON our internal network, is costing us money by using our local bandwidth by not paying us for the privilege.

    Sigh ... so how can we keep the users from internet egress? USAGE CAPS!

    We can't make the internet media companies pay us to support access to them, so we'll make the users do so in their stead. If they want to go outside our network and NOT use our local services, they'll pay us for the privilege to do so. We charge more than it costs, so that's all good.

    And if we can coerce them to purchase a bundled plan, we're now providing a extra service and of course can charge more. After all, the original cost of the system, while expensive, is negligible; the media costs, while expensive, are static. The only wild cards are internet media usage which use our internal bandwidth for free and even make us pay for egress access to their media.



    Now, **THAT** is exactly why 1GB "network-local" HDTV is not 1GB HDTV from (10% egress) Netflix or not 1GB HDTV from (100% egress) Hulu.



    You thief. Quit stealing our precious internet bandwidth and pay us more for the privilege, why don't you already?

    And this is why "Net Neutrality" is doomed: internet egress will never be "neutral" since it costs them money while providing absolutely 0 revenue in return. Hell, except for a mandatory bullet point ("We're the internet") it's probably negative revenue.

    "We never stop working for you" -- sorry, I meant to say stop thinking up ways to charge more and provide less. Netflix in CA? Sorry, too many users, that's all bottlenecked at egress points. Never mind that Netflix wants to install hardware solutions for free.

    "Thank you for your business; your call is very important to us, please hold" -- that's why don't hire enough call-center workers and waste your time: because you put up with it.

    I'm a Plex user, but that's as far as it goes.

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

  41. identicon
    Anonymous Coward, 13 May 2016 @ 8:37pm

    Re: Re: Time to share the account with the neighbours

    They make these devices called switches that help connect multiple users. I've heard that there are even things call VLANs that can separate network segments on said switches.

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

  42. identicon
    Anonymous Coward, 13 May 2016 @ 9:57pm

    I've collected enough data to tell me Centurylink is intentionally messing with Netflix traffic. No idea why, but Netflix just suddenly became almost completely unwatchable one day. Prior to this, I could get 4K streams without a problem... the next, max 675kbs. Yeah, that's pathetic. Oddly, about the same time I started seeing advertisements all over online for their "Prism" TV service. WTF? No, I pay you for a 40mbs connection, I want what I paid for.

    FWIW, I'm an engineer, I design, build and test networking equipment. I've also done plenty of IT projects.

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

  43. identicon
    Anonymous Coward, 13 May 2016 @ 10:15pm

    Re: Re: Re:

    The problem there is a conflation of two issues. Limited bandwidth (actual RF bandwidth real estate to move the information on) and limits/caps being put on total data through-put.

    If a tower lacks the backhaul to support a fast connection then it is reasonable that users would be throttled or experience some QoS management. Most people can accept that. The problem is that users are also being (over)billed and/or throttled based on Total amounts of data transmitted, which has nothing to do with congestion.

    Caps on wired connections is even more criminal. Past the capital costs of making the actual connections and maintaining equipment there is almost no difference between the costs of a heavy user and someone who checks their email weekly. Data is not a limited resource like electricity or water.

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

  44. identicon
    Peter, 14 May 2016 @ 8:05am

    Re: Lawsuit time

    Rico act... Interesting point, since what the cable companies are doing does fall under the definition of racketeering.

    My service isn't subject to a data cap (yet), but I would love to see a class action lawsuit against big ISPs and against the municipalities that grant them exclusive access.

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

  45. icon
    Derek Kerton (profile), 14 May 2016 @ 12:11pm

    Re: Re: It's No Bullshit

    "If the usual peering arrangements apply"

    Peering is just for Tier 1 to Tier 1 carriers.
    Smaller carriers, like Bend, must pay the Tier 1.

    Since traffic demand per customer keeps growing year after year, it DOES cost annual money to continue meeting that demand.

    My argument is those that consume significantly more traffic should pay somewhat more than those that consume the norm or less.

    "Further, as the the "we will not charge you extra if you subscribe to cable" shows, they are more worried about their legacy cable business than the actual cost of providing Internet services."

    Yes, but like Karl, you're now conflating two things. The caps themselves are not evil. They are being used anti-competitively. It's like a 2x4 board. It's not evil. It holds up my house. But if you hit me on the head with it, I perceive it as bad. Really, though, the problem is you hitting me on the head, the board is neutral. Our US problem is that, due to the state of competition, most of our exposure to caps is when the ISPs hit us on the head with them. This is why you and Karl misinterpret the cap.

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

  46. icon
    Derek Kerton (profile), 14 May 2016 @ 12:16pm

    Re: Re:

    I pointed out the difference.

    The problem with your perception is that in the US, caps are pretty much ONLY used anti-competitively. That's to be expected, since we have too little competition.

    Caps are not anti-competitive. They are part of a service offering. In the US, all fast food chains let you fill and refill your soda cup. If Taco Bell offered caps on their drinks of one fill-up per cup, is that anti-competitive? No. But, you might go to Burger King instead. So the cap is just part of their offering. The only difference is that the customer has options.

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

  47. identicon
    Anonymous Coward, 14 May 2016 @ 1:16pm

    Re: Re: Re: It's No Bullshit

    The thing with data caps is that they do little to solve the real network capacity issue, and that is instantaneous congestion at popular times for using the Internet in an area. That requires quality of service management to provide a fair allocation of the bandwidth. I will make the obvious observation, data caps do nothing to reduce viewing of the most popular streaming programs, and therefore nothing to reduce congestion during those shows.
    Also, due to content delivery networks, the demand for tier one use does not scale with increasing demand for streaming video.
    These offers are purely an attempt to protect their cable subscription number. However, when people subscribe but ignore the cable service, just to get the unlimited Internet data, the Nielsen rating for show will drop, which impacts their adversing revenue. What will they do then, require a minimum number of hours a day of cable viewing to qualify for unlimited Internet data?

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

  48. icon
    John Fenderson (profile), 14 May 2016 @ 2:09pm

    Re: Re: Re:

    I agree. The problem isn't with caps per se, the problem is with how they're being used and marketed. But the difference is subtle enough that it's hard to talk about the issue without using the imprecise shorthand of "usage caps".

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

  49. icon
    John Fenderson (profile), 14 May 2016 @ 2:12pm

    Re: Re:

    Even if the financial need is genuine, this method of getting the additional revenue is offensive. It would be better if they just raise rates. At least that would be honorable and honest.

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

  50. identicon
    Anonymous Coward, 15 May 2016 @ 9:29am

    Re: Re: Lawsuit time

    Impeach them all!

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

  51. identicon
    Anonymous Coward, 15 May 2016 @ 9:55am

    Mandatory TV

    So, let's see:
    1. I don't own a TV set, so I have to buy one, and something for it to sit on.

    2. I have a free ISP-supplied cable modem, but no "set-top box", which I must rent from them.

    Gonna take a long time to amortize those costs against the "savings"!

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

  52. identicon
    Anonymous Coward, 16 May 2016 @ 5:46am

    Re: There is nothing inherently wrong with caps

    Yes there is: reliability, and predictable billing cycles.

    Caps are implemented in one of two ways. Either surprise overage billing, or throttling. Both cases cause market uncertainty for the end user. The end user never really knows when it is time to upgrade until it is too late, and their business may be harmed as result. Add the fact that a request for upgraded service is as likely to result in an outage as a successful upgrade, and you start to see why customers are so pissed off.

    Usage capping is shitty customer service. Period.

    Competently run networks don't need it. The cable cabal is already switching at layer 4, (yet another dick move) so it isn't like they don't already have equipment in place that COULD run more user friendly QOS strategy. Though it would be less privacy intrusive, and cheaper to do this at lower OSI layers. This has been true for many years now.

    Network management is about improving reliability and performance. Usage capping is just going out of your way to fuck people for an extra nickle. If there was competition in these markets, they wouldn't do it. And that is how you know that usage capping is an anti-trust activity.

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

  53. icon
    Derek Kerton (profile), 16 May 2016 @ 9:33am

    Re: Re: Re: Re:

    True dat. And I agree, that's what the readership here sees.

    But I think Karl is competent enough that at least HE should make the distinction, yet I don't think he agrees.

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

  54. icon
    Derek Kerton (profile), 16 May 2016 @ 9:39am

    Re: Re: Re: Re: It's No Bullshit

    "The thing with data caps is that they do little to solve the real network capacity issue, and that is instantaneous congestion at popular times for using the Internet in an area. "

    You are correct. Caps are a blunt tool. They are an over-simplified method of demand management, and they don't directly address the peak load problem.

    But they do indirectly address it. And the alternative, that ISPs give you complicated windows of time when you have different traffic allocations is...too complicated, and consumers would reject it.

    So, the blunt tool is what is used because customers will tolerate it, but would not tolerate the more precise management of demand.

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

  55. identicon
    Anonymous Coward, 16 May 2016 @ 4:05pm

    Re: Re: Re: Re: Re: It's No Bullshit

    You are correct. Caps are a blunt tool.

    There are better ways of handling the peak load problem via QOS management of capacity given to heavy users, and/or video streams. However from the story:-


    Back in January, AT&T announced that the company would be happy to remove usage caps on its wireless network, but only if you subscribe to DirecTV or U-verse TV service. Then last month, AT&T carried this idea over to its fixed-line broadband network, announcing that it would be imposing new usage caps on its broadband users starting May 23. While AT&T says it will generously allow users to pay $30 more per month to avoid usage caps entirely, it also announced that users who subscribe to its TV services will be able to avoid usage caps entirely.

    Which makes it clear that network congestion is NOT the problem they are trying to solve, but rather the loss of cable subscriptions to streaming services, especially when wireless caps are removed if someone subscribes to a cable service. Given what the companies are offering, it looks very much like you are using abstract arguments to justify a blatant manipulation of a market.

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

  56. icon
    Derek Kerton (profile), 18 May 2016 @ 12:12pm

    Re: Re: Re: Re: Re: Re: It's No Bullshit

    re your last para:

    I've been extremely* clear that I agree with that point. So, no, I'm not "using abstract arguments to justify a blatant manipulation of a market."

    But this point does not mean that caps are bad. Just that they are a tool that's being used anti-competitively in this case.

    *See point 1) and point a) in my original comment, where I VERY specifically not that it is market manipulation. I mean, come on! I wrote it at the top of each fucking list!

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

  57. identicon
    Anonymous Coward, 2 Jun 2016 @ 4:56am

    Re:

    b)
    It is fair and logical that a few should fund what the many will reap.

    It is fair and logical to slow down your speed, creating congestion by keeping data in the pipe longer, when you choose a lower data plan.

    It is fair and logical that these companies have billions of dollars to acquire other companies. Obviously they can already hardly cover expenses.

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

  58. programvb.com

    If you had these equipments you would not have to send out letters or have a representative from TVLA to visit these vacant properties and properties that does not have a TV.


    http://www.programvb.com/2017/03/Channel-Frequency-alhafez-TV.html
    http://www.programvb.com/2017/0 3/channel-frequency-daleel-tv.html
    http://www.programvb.com/2017/03/channel-frequency-tarteel-tv.html

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


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