| Because super-large companies have economy of scale on their side to bring down prices enormously. Besides, they've already paid for the network they laid down years ago. The cost to them is simply based on maintaining and upgrading the network, which is minimal (especially since they spend so little to upgrade it). |
DampierPhillip M Dampier
join:2003-03-23
Rochester, NY | reply to WhatNow
Your first assumption is that because you consume just 10GB per month, your bill will somehow increase because of heavy users. When ISPs raise rates, they tend to raise them for everyone. In Canada, where service is capped and throttled, one company increased rates across the board. TWC has traditionally done the same thing in some divisions, especially for those who don't also have a cable TV bundle.
Time Warner Cable's proposal for our community claimed it would save light users money, but their first proposal provided a tiny bandwidth allowance of just 1GB per month, each additional gigabyte was $2. That didn't include the monthly service charge either.
The question you should really be asking yourself is why the company making $4 BILLION dollars in revenue last year, while spending just $146 million to support their network needs to raise rates for anyone, much less take away the current pricing model.
In the last conference call reporting quarterly financial results, company officials admitted many heavy users already pay more than their fair share with Road Runner Turbo, which is quick extra $10 a month in their pocket. What tier of service eats into their results more? The Lite tier for users just like yourself who consume less and want to pay less. Upgrading their network to deliver faster speeds for those who want to pay premium prices for them will generate even more revenue for the company.
Why should any content provider have to also pay a broadband network to transport their content? They are not their customers. When you receive a long distance phone call, why aren't you paying to receive that call? Because the person making it paid their long distance carrier to handle the call.
It's precisely content like video that drives 11% growth in new customers for Time Warner Cable's broadband product last year. Those customers already pay TWC for that content to be transported.
Remember, TWC is also the same company behind TV Everywhere, which seeks to deliver dozens and dozens of cable network programs over broadband, on demand, to authenticated cable TV subscribers.
In other words, they are complaining about broadband video using too much bandwidth so they are resolving to... deliver even more video content over that network!
Yes, broadband is changing. It's becoming cheaper to provide and easier to expand, if companies seek to make the investments to keep their networks in good shape. Verizon FiOS is doing that, so is Cablevision, all without caps.
Broadband networks are a duopoly in most communities. One cable and one phone company. The reason you don't often see more is that private investors, accustomed to a certain return on their investment based on the duopoly market conditions, feel that a third or fourth competitor will create too much price competition and dilute returns, discouraging them from investing in the first place. Providers also confront pole attachment fees, local franchise requirements, infrastructure installation, etc.
There are tons of transport networks that don't get wired out to individual homes, and competition there is robust.
We're getting to the point where construction of a nationwide fiber to the home network is beginning to make sense, where companies who wish to compete for your business can co-exist on that network platform and let them compete.
Until something like that is possible, it's important to protect consumers from abusive pricing in markets where competition is limited. Otherwise we're destined to repeat Canada's mistakes, where the exact same arguments were made, and the end result was that you would have paid more, I would have paid more, everyone would pay more for either the same speed (or incrementally better) than we had before, except now you also pay overlimit fees and find certain applications are being throttled. Canada finds itself just ahead of Mexico now in broadband pricing value.
What countries have the fastest and cheapest bandwidth with the fewest restrictions? Korea and Japan, where it's not about your usage vs. someone else's. It's about constructing and maintaining a high quality, scalable broadband infrastructure that can meet everyone's needs at a reasonable price.
Why aren't we the world leader on this? |
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