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Comments on news posted 2013-01-18 10:27:04: For years the cable industry insisted that they imposed usage caps because network congestion made them necessary. ..

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skeechan
Ai Otsukaholic
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join:2012-01-26
AA169|170
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1 recommendation

In other news...

...the Sun rose in the east.



N3OGH
Yo Soy Col. "Bat" Guano
Premium
join:2003-11-11
Philly burbs
kudos:2

Birds flew south for the winter...



espaeth
Digital Plumber
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join:2001-04-21
Minneapolis, MN
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3 recommendations

Yeah, let's just ignore the access charges

If metered pricing were about "fairness," carriers would offer the nation's grandmothers a $5 a month tier that accurately reflected her twice weekly, several megabyte browsing of the Weather Channel website.
The first packet is the most expensive one to deliver, because you have to have all of the necessary underlying infrastructure in place to get it there.

The key problem is trying to time your technology refresh cycle so that it lines up with the next generation of available technology so that you get the most "bang for your buck" when you purchase new hardware for replacement or expansion.

Data caps are an imperfect system to try and shape demand into something that meets that refresh cycle. It's been pretty clear for years that caps are about the business model, not congestion.

We had this whole discussion on this site in 2008/9 when there was news every freaking day about the Comcast network management system. This isn't news.


FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

Cost coverage shift from tiered TV to tiered data

quote:
caps are really about: driving up the cost of data for all users in order to offset the inevitable decline in TV revenues
Or in other more accurate words: " Covering the fixed cost infrastructure of the cable plant as video watching shifts from the cheaper broadcast cable channel method to the more expensive bandwidth intensive point to point streaming method. " So costs will shift from tiered TV plans to tiered data plans based on usage and not speed.
--
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury.


MovieLover76

join:2009-09-11
kudos:1

Genius

Sooo, they switched from the weak network congestion issue, which they were lucky enough that most people don't understand congestion, to a fairness argument, for which anyone can debunk simply by looking at the prices on their website.

Genius lol



MovieLover76

join:2009-09-11
kudos:1

2 recommendations

reply to espaeth

Re: Yeah, let's just ignore the access charges

It's news because a cable lobbyist admitted it, and it's a huge accomplishment that the opposition had so much proof the network congestion was a farce that they finally had to come clean and admit it.

Of course they just switched to a new argument, but that argument is even weaker in my opinion.



IPPlanMan
Holy Cable Modem Batman

join:2000-09-20
Washington, DC
kudos:1

1 recommendation

Well, surprise, surprise, surprise!

»The real reason for the cap ~by IPPlanMan~

I said that caps had nothing to do with addressing congestion back in 2009...

As I recall, some didn't agree with me about that...


WernerSchutz

join:2009-08-04
Sugar Land, TX

Well, the cable lobbyist will just say later that he "misspoke" (lied, in political speech)


elefante72

join:2010-12-03
East Amherst, NY
reply to espaeth

Re: Yeah, let's just ignore the access charges

I might agree, but hasn't Comcast kept the same cap for years? I mean if that is the case, then the D3 upgrade didn't make any bit of difference?

In my neck of the woods, Time Warner nor FIOS have caps and both stream at max rates all the time, especially FIOS. And I only pay $110 for 50/25 and extreme. I think that is perfectly reasonable, and I use about 200-400GB a month (depending upon the kids streaming habits). I would not be happy in a capped world.

What they have to worry about is simple: I drop cable and do only internet. Now I use 600-700GB a month because streaming becomes the only method for getting video. Right now outside of broadcast only 5-10% of the viewing comes from cable. Wife has finally given me the go-ahead to drop cable and save $50/mo.

Also infrastructure costs are often shared w/ the other services (most people actually run TV), so in that case outside the HSI equipment costs, baked into the cost of cable and phone are infrastructure costs.

As we know transit costs (if they have any) --look @ CDN have been plummeting.

So the cost is clearly going down, so why does the price go up every year? Profit, nothing more, nothing less. I don't blame them, they can get away with it for now.

If too many people start dropping cable, then it will start eating into their margins because equipment was sized for distributing cable too. Phone cost is minimal.... That is the balancing act, keeping you signed up for the triple play....



ArrayList
netbus developer
Premium
join:2005-03-19
Evanston, IL
reply to FFH

Re: Cost coverage shift from tiered TV to tiered data

oh it will still be based on speed. no way will people get 100mbps connections for the same price as another person on a 12mbps connection.


Crookshanks

join:2008-02-04
Binghamton, NY

1 recommendation

reply to espaeth

Re: Yeah, let's just ignore the access charges

said by espaeth:

If metered pricing were about "fairness," carriers would offer the nation's grandmothers a $5 a month tier that accurately reflected her twice weekly, several megabyte browsing of the Weather Channel website.
The first packet is the most expensive one to deliver, because you have to have all of the necessary underlying infrastructure in place to get it there.

You hit the nail on the head. The connection itself has a fixed cost regardless of what the actual usage (be it total data or average bitrate) is. Our electric bill costs us $15/mo before we use a single kWh, just for the connection to the grid.

In a fair system, Grandma wouldn't be paying $44.95/mo, but it's equally insane to think that she should be paying $5/mo. Time Warner's tiered option ($5 lousy dollars off your bill for a pathetic 5GB cap) is a blatant rip off, but the point here isn't to save 95% of their customers money. It's to monetize the 95%+ percentile of customers that use the lion's share of the available network capacity.


IowaCowboy
Iowa native
Premium
join:2010-10-16
Springfield, MA
Reviews:
·Verizon Broadban..
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Why should Netflix undercut cable

Comcast owns the lines and infrastructure. They charge a modest price for TV service and that pays the salaries of hard working individuals maintaining the infrastructure that carries TV, phone, and Internet. I don't think Netflix should get a free ride on Comcast's lines as I call that unfair competition. If it was not for Comcast offering TV service, we'd be paying three times as much for Internet. Competition is good, but when you severely undercut a competitor and get a free ride on their infrastructure, I call that unethical competition. I think the FCC should seriously look at IPTV services and make them adhere to the same regulations that cable/satellite/broadcasters must adhere to. I pay a good chunk of money to Comcast each month for my triple play and cord cutters are going to cause that cost to go up as they still have the cost of maintaining infrastructure but are losing the money to pay for it and broadband prices will go up and quality will decline.

I think Comcast should waive caps if a subscriber gets expanded basic or above or Netflix should have to pay Comcast and other pay TV providers for use of their networks.



cableties
Premium
join:2005-01-27

But the tubes!

They are using them up!!!

5% use 95% of the bandwidth.
Then there is the "sandvine" backdoor sniffing patent trolls....
--
Splat



mr sean
Professional Infidel
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N. Absentia
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reply to skeechan

Re: In other news...

And Generalissimo Francisco Franco is still dead...



espaeth
Digital Plumber
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reply to elefante72

Re: Yeah, let's just ignore the access charges

said by elefante72:

I might agree, but hasn't Comcast kept the same cap for years? I mean if that is the case, then the D3 upgrade didn't make any bit of difference?

It started off a decade ago as a "soft" cap where they kicked heavy users off the system. In 2008 it was defined to be a 250GB cap, and then this year they started to expand the cap / look at strategies for being able to use more capacity for a larger monthly fee. See: »Exclusive: Some Comcast Users Will See 500 GB Cap

I think the problem is that infrastructure updates take years, and our culture is now exclusively focused on short term goals/results.


Scree
In the pipe 5 by 5

join:2001-04-24
Mount Laurel, NJ

1 recommendation

reply to skeechan

Re: In other news...

...And we still pay too much for services...



morbo
Complete Your Transaction

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00000
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reply to espaeth

Re: Yeah, let's just ignore the access charges

The problem is that the caps are mostly arbitrary and used in an anti-competitive way to limit competition from streaming content. If the caps were at least updated annually or on a rolling schedule based on average consumption increases then this wouldn't matter.



MovieLover76

join:2009-09-11
kudos:1
reply to IowaCowboy

Re: Why should Netflix undercut cable

do you understand how the internet works at all? and what the heck makes you think cable cut the cost of internet. If anything they pioneered more expensive internet access.



morbo
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reply to Crookshanks

Re: Yeah, let's just ignore the access charges

said by Crookshanks:

but the point here isn't to save 95% of their customers money. It's to monetize the 95%+ percentile of customers that use the lion's share of the available network capacity.

I'm glad you admit that this is strictly about milking the subset of customers that consume above average resources for no other reason that "we can" and a mistaken understanding of costs associated with the above average use.

rradina

join:2000-08-08
Chesterfield, MO
reply to IowaCowboy

Re: Why should Netflix undercut cable

But what about the providers who don't have triple play revenue, like AT&T and Verizon? (Sure, there's limited FIOS and U-Verse where both are in the TV business but compared to their core wired business of delivering bits, it doesn't compare to cable's success at getting most folks to spend more with them to offset plant costs.) Are AT&T and Verizon subsidizing their wired infrastructure costs with wired revenue? Of course that would be like shooting your own foot since their wired business is still regulated and they are allowed to charge a price that guarantees a set profit margin. In fact, there are actually claims that Verizon is illegally pushing wireless costs into its wired expense column since that's still a regulated monopoly. What about cable companies undercutting POTS service with $19.95 unlimited local/long distance VOIP? What about wireless cannibalizing POTS service?


Crookshanks

join:2008-02-04
Binghamton, NY
reply to morbo

Re: Yeah, let's just ignore the access charges

said by morbo:

I'm glad you admit that this is strictly about milking the subset of customers that consume above average resources for no other reason that "we can" and a mistaken understanding of costs associated with the above average use.

It doesn't matter what the cost differential is, you can't dispute the fact that someone who has an average bitrate of 5mbit/s (just to pick a number) imposes a greater cost on the ISP than someone with an average bitrate of 100kbit/s. The former requires more infrastructure investment than the latter, yet people defend pricing plans that charge them the same amount of money.

From a business standpoint this policy is hard to argue with. They alienate a tiny slice of their customer base, which happens to impose the greatest cost on them, and they either monetize them or get them to reduce their cost/leave the network entirely. It's a win win for the ISP from a business perspective, and I'd probably be doing the same thing if I was running an ISP.


LightS
Premium
join:2005-12-17
Greenville, TX
reply to IowaCowboy

Re: Why should Netflix undercut cable

LOL.
You sound like the European ISPs that want companies such as Google to pay for their network upgrades..

The user chooses what they use their data for. Here in the US of A, that's almost breaching net neutrality...

Netflix already has to pay for their own bandwidth costs. The only way Comcast, etc. would get $$ from Netflix is if they had direct peering in a datacenter and it went straight onto Comcasts network. Do they already do this? Hell if I know. Either way, it's not up to Netflix to pay for Comcasts stuff.



espaeth
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reply to morbo

Re: Yeah, let's just ignore the access charges

said by morbo:

The problem is that the caps are mostly arbitrary and used in an anti-competitive way to limit competition from streaming content.

Yeah, yeah. We've all heard the blanket statement repeated over and over again on this site.

How many services really compete head to head?

At best, online services chip away at sections of what is available via broadcast TV, but there is not a wholesale replacement option. It's not because of bandwidth caps; it's because anyone with a clue about how that infrastructure is built knows that you can't scale to 100+ million simultaneous Internet video feeds using technology available today.

Caps aren't the reason that service doesn't exist, no matter how badly you want that to be cause.

said by morbo:

If the caps were at least updated annually or on a rolling schedule based on average consumption increases then this wouldn't matter.

Technology refresh cycles are 3-5 years, which is about the rate you're seeing access speed increases and bandwidth cap increases.


K00laid

@bahnhof.se
reply to IowaCowboy

Re: Why should Netflix undercut cable

said by IowaCowboy:

Comcast owns their lines and infrastructure. They charge a modest price for TV service and that pays the salaries of hard working individuals maintaining the infrastructure that carries TV, phone, and Internet. I don't think Netflix should get a free ride on Comcast's lines as I call that unfair competition. If it was not for Comcast offering TV service, we'd be paying three times as much for Internet. Competition is good, but when you severely undercut a competitor and get a free ride on their infrastructure, I call that unethical competition. I think the FCC should seriously look at IPTV services and make them adhere to the same regulations that cable/satellite/broadcasters must adhere to. I pay a good chunk of money to Comcast each month for my triple play and cord cutters are going to cause that cost to go up as they still have the cost of maintaining infrastructure but are losing the money to pay for it and broadband prices will go up and quality will decline.

I think Comcast should waive caps if a subscriber gets expanded basic or above or Netflix should have to pay Comcast and other pay TV providers for use of their networks.

Comcast owns the lines and infrastructure. Comcast's subscribers pay inflated flat rate pricing for residential and commercial services that cover costs associated with bandwidth, maintenance of infrastructure, and capex, while still generating additional revenue for operations/labor and shareholder's dividends.

Comcast subscribers ALREADY paid for their bandwidth. If a Comcast internet subscriber chooses to pay for Netflix out of their own pocket, Comcast has no right to impede or otherwise interfere with a competitor's traffic or services requested by and routed to a Comcast internet subscriber. Comcast has no right to demand anything more.

silbaco
Premium
join:2009-08-03
USA

Who cares.

Who cares what the reasons are or supposedly are. All that matters is that they exist.



IowaCowboy
Iowa native
Premium
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Springfield, MA
Reviews:
·Verizon Broadban..
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reply to LightS

Re: Why should Netflix undercut cable

While I think the concept of Netflix is a good idea, I just think they should play fair competition with cable and not be the reason for the hundreds of thousands of cord cutters every quarter. What I am also saying is they should have to adhere to the same regulations as cable such as the public access requirements and community programming. What I don't think is fair that cable has a lot of regulations and Netflix has none. And cable employs people who live in your community, Netflix probably has their servers overseas.

I subscribe to cable, and always will.

Final thought: either deregulate cable or make IP video services adhere to the same regulations as broadcasters and cable providers. What I don't like is Netflix's ability to seriously undercut traditional TV providers that own infrastructure.

Comcast charges more if you have Internet only to make up for the lost TV revenue. Comcast still has the same labor and cable plant costs if you are an HSI only subscriber or subscribe to their Xfinity Triple Play Complete (their highest level of service) although the programming costs vary based on the number of subscribers of that channel.



LightS
Premium
join:2005-12-17
Greenville, TX

I think our opinion regarding Netflix differs though - I personally like Netflix (even though I'm not a subscriber anymore) because it's different. I could care less how much it costs - I like that there are options, that you can stream movies on demand, and no ads.

As far as that goes - Netflix is not a cable ISP. They entered this business to provide IPTV & frankly, they're doing a good job.

Also - It's pure greed IMO by the ISP. They made contracts with content providers - if everybody cuts cable, who's fault is that if they lose revenue? Not the consumer, that's the ISP. They then need to figure out a way to recover their subscribers. If they can't, they deserve to not be a provider any longer.


silbaco
Premium
join:2009-08-03
USA
reply to IowaCowboy

It is similar to the Internet radio vs. broadcast radio battle. One has few regulations, the other has considerable regulations. It won't change anytime soon, probably never. The older technologies were supposed to serve the community. The newer ones have no such obligations.


silbaco
Premium
join:2009-08-03
USA
reply to LightS

It is the content owner's fault more than the cable operator/ISP's. The content owners make the rules. Operators can't do anything about it. Cable operators would like for their rates not to go up as much as their consumers, but that's not an option when content owners want double and sometimes as much as 5 times what their previous contract required.


pittpete1

join:2009-06-12

This made me laugh

Comcast owns the lines and infrastructure. They charge a modest price for TV service and that pays the salaries of hard working individuals maintaining the infrastructure that carries TV, phone, and Internet.