·Time Warner Cable
|reply to 34764170 |
There is a positive correlation between the speed of someone's connection and the amount of data that they transfer over it, probably because there's a positive correlation between price and amount of transfer used, all else equal.
Yes, caps low enough that people hit them are a revenue source. If you don't like it, you should build your own ISP and find out what the cost of last-mile bandwidth really is. The same economies of scale that make you reluctant to do that also allow Mediacom to come up with a number that represents the overall cost per GB that crosses their network, and it's not as close to zero as you might think.
Also, in an ideal world (not saying this is happening with Mediacom) higher-end users pay for the network upgrades for the node. A bunch of 10M users would probably be just fine with a couple of DOCSIS channels bonded per node. Add in a few 50M and 105M high-end folks and you now need four, six or even eight channels. Those line cards cost money. So Mediacom matches incremental revenue to incremental expenses and makes a profit.
Would they be able to add in as much profit in a more competitive environment? Nope. But it's downright scary to become a new competitor in wireline communications, unless you're coming in with a tech that others can't match without significant effort. Marginal costs for the incumbent, sans upgrades, are just too low. So it takes someone with balls like Google to do this these days.