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fifty nine
join:2002-09-25
Sussex, NJ

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fifty nine

Member

Something has to give.

While I don't agree with regulating them as broadcasters, if internet streaming continues to require ISPs to upgrade to handle the additional traffic, we can't simply expect ISPs to eat the costs without either raising prices or charging back the content providers.

Problem is that we as consumers have expected "free" or "cheap" from the internet since forever. Level 3 vs Comcast showed exactly that, that consumers expect that Comcast should simply eat the cost of more infrastructure to handle netflix.

r81984
Fair and Balanced
Premium Member
join:2001-11-14
Katy, TX

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r81984

Premium Member

said by fifty nine:

While I don't agree with regulating them as broadcasters, if internet streaming continues to require ISPs to upgrade to handle the additional traffic, we can't simply expect ISPs to eat the costs without either raising prices or charging back the content providers.

Problem is that we as consumers have expected "free" or "cheap" from the internet since forever. Level 3 vs Comcast showed exactly that, that consumers expect that Comcast should simply eat the cost of more infrastructure to handle netflix.

ISPs eat the cost???? Really?
ISPs are not eating any costs. In 99% of the US broadband ISPs are monopolies. Their customers pay plenty to pay for the networks and for upgrades. Online streaming is not hurting the ISP business.

FYI, the content providers like google and netflix already pay their ISPs for access to the internet. Only an idiot would even think that google and netflix should pay for other ISP customers internet connections.

$40+ a month is not cheap for internet.
My cable company sells cable for $50 a month and internet for $50 a month. They make a much smaller profit off the tv after they pay content providers than when they sell internet which requires no payment to content providers. They make a killing off internet.

If they want netflix to be a broadcaster than Shaw would have to pay netflix for their customers to access it. So instead of Shaw getting free content to sell internet connections they will have to pay for it.

morbo
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ISPs are getting greedy. That's what this is about.

TechyDad
Premium Member
join:2001-07-13
USA

TechyDad

Premium Member

I think what this is really about is that ISPs that also provide television content see Netflix, Google and other online video providers as a threat. If people get enough of their entertainment from online sources, they'll cut cable (or, at the very least, won't buy those expensive cable add-on packages). This will cut the ISP's revenue. So they either demand that Netflix/Google/etc be regulated (read: "Hey, Government. Save our profits!") or they demand that they be paid for traffic coming across their network. ("We'll be fair and charge everyone... except for ourselves of course. No, that doesn't give us an advantage. Oops, looks like Netflix is slowing down again. Better pay us to watch some TV.")

battleop
join:2005-09-28
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"ISPs are not eating any costs. In 99% of the US broadband ISPs are monopolies"

You clearly have absolutely no idea as to what you are taking about. Please show us where A. ISPs are not taking a hit on this and B. where 99% of broadband ISPs are monopolies.

morbo
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ISPs can raise their prices for internet service if they believe the market will bear it. Adapt or die.

fifty nine
join:2002-09-25
Sussex, NJ

fifty nine to r81984

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ISPs are being told they have to eat the cost. Read Comcast's letter to the FCC regarding Level 3.
kaila
join:2000-10-11
Lincolnshire, IL

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While it 'sucks' for ISP's that consumer bandwidth usage keeps trending upward, it has been doing that since the beginning and should hardly come as a surprise. And based on the average subscriber pricing and usage limits in Canada (US as well), they're either well prepared for the cost of upgrades or making a lot of mistakes with their money.

Singling out Comcast (as your example), their gross profits are 60% with net around 10%. Fairly standard for the industry and a pretty sweet money making model in light of the economy and .29% 1yr T-bills.
Skippy25
join:2000-09-13
Hazelwood, MO

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Right... because what Comcast says is oh so on the up and up.

ISP's do not have to eat any cost. They run an internet service, that requires them to deliver packets their consumers request. This has cost associated with it. Cost they make up for in their rates they charge their subscribers. If they are paying more then they are receiving then they need to raise their rates to their subscribers to make up that difference.

The fight between L3 and Comcast has nothing to do with peering as Comcast claims. It is simply them trying to leverage their large user base against yet another one of their core providers. One person that explains the "issue" very well without picking sides is here. »www.voxel.net/blog/2010/ ··· -and-you

I suggest you read that so you actually know what you are talking about. You will also see how Comcast is trying to get Tata into one of their "peering agreements" by choking their access to Comcast customers.

fifty nine
join:2002-09-25
Sussex, NJ

fifty nine

Member

said by Skippy25:

Right... because what Comcast says is oh so on the up and up.

It's because what Comcast says is the truth, and Level 3 is yet to deny any of their claims. Instead, they're deflecting from the facts with the "evil comcast is protecting their video revenue" claims.

ISP's do not have to eat any cost. They run an internet service, that requires them to deliver packets their consumers request. This has cost associated with it. Cost they make up for in their rates they charge their subscribers. If they are paying more then they are receiving then they need to raise their rates to their subscribers to make up that difference.

Based on the above, I suggest you take your own advice:

I suggest you read that so you actually know what you are talking about.

fifty nine

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said by morbo:

ISPs can raise their prices for internet service if they believe the market will bear it. Adapt or die.

What if ISPs decided to charge more for certain types of content? Then people would be screaming "net neutrality!!!!!" and run straight to the FCC/CRTC crying about how evil corporations are putting up toll booths on the internet.
fifty nine

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And nothing is wrong with them taking steps to maintain that profitability.

morbo
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ISPs can recoup their costs by charging more. They cannot decide what content users decide to access on their lines. Yes, that is a net neutrality issue. ISPs must be protocol neutral.

Hangmn
Don't Fight It...It's Inevitable
Premium Member
join:2000-04-08
Philadelphia, PA

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said by battleop:

"ISPs are not eating any costs. In 99% of the US broadband ISPs are monopolies"

You clearly have absolutely no idea as to what you are taking about. Please show us where A. ISPs are not taking a hit on this and B. where 99% of broadband ISPs are monopolies.

ISPs CLEARLY gouge customers as the WHOLESALE costs of bandwidth has been on the DECLINE for a DECADE and providers FAITHFULLY increase fees twice yearly..You sir clearly have no idea...oh and not to mention NO COMPETITION

TechyDad
Premium Member
join:2001-07-13
USA

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And how would the ISP charge more for certain types of content? If you read a web page with an embedded YouTube video, would that be Online Video? What if the video was hosted on the web page's own site? Would there be a fee structure with different fees (charged per megabyte) for different sites?

Besides being a network neutrality violation, this would be horribly complex for billing purposes. ISPs that did this wouldn't be able to advertise "get super fast Internet for just $XX." Of course, they could still advertise their "low rate of $XX" and then add in more bogus below the line taxes and fees (e.g. "Online Video Fee", "Streaming Movie Tax", etc.) They wouldn't be able to charge much there, however. I think the FCC would investigate if people were being charged $20 a month in "Streaming Movie Fees."
TechyDad

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As far as B is concerned, most areas in the US have only one or two broadband ISPs to choose from. You have the phone company or the cable company. These two "compete" but just enough to maintain their duopoly. Less lucky areas only have one ISP and people have a choice of going with the only broadband ISP or not having broadband Internet. (Still less lucky areas have no broadband ISPs, but I think that's a different discussion.) Very few areas in the US have 3 or more ISP choices.

swintec
Premium Member
join:2003-12-19
Alfred, ME

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said by battleop:

You clearly have absolutely no idea as to what you are taking about.

Oh hey you must be new here.
backness
join:2005-07-08
K2P OW2

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and if somebody is dumb enough to challenge them and open a third service, they promptly upgrade the area and lower prices to kill the new guys margins.

swintec
Premium Member
join:2003-12-19
Alfred, ME

swintec

Premium Member

said by backness:

and if somebody is dumb enough to challenge them and open a third service, they promptly upgrade the area and lower prices to kill the new guys margins.

Well gee whiz...that sounds an awful lot like...how business works?
LostInWoods
join:2004-04-14

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LostInWoods

Member

If you have a monopoly, it does. You can afford to lower prices for awhile in a small area to kill off new competitors. Then you and raise the prices back again once the blood dries.

I really don't understand some of the people on here who reflexively root against municipal broadband offerings as "unfair government interference in the free market" when the local monopoly or duopoly got established by government franchises with guaranteed rates of return. The removal of those franchises doesn't remove the enormous advantage the original entrenched players have.

When there are only two "competitors", there really is no free market for a local government to meddle in.

TechyDad
Premium Member
join:2001-07-13
USA

TechyDad

Premium Member

And, in some cases, those municipal broadband offerings are in areas the duopoly isn't servicing, but the duopoly opposes it because they might one day decide to enter that market and, if/when they do, they don't want to "compete with the government." So the people continue to get no access and the duopoly ISPs get to keep promising access... sometime... maybe... we'll see.

Guspaz
Guspaz
MVM
join:2001-11-05
Montreal, QC

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Most ISPs in Canada already have caps and overage fees. Bell Canada has a 60GB cap on their standard DSL service, and a $2.50 per gigabyte overage fee.

Doesn't that kind of cover the added costs of greater demand for streaming?

In fact, since Bell managed to convince the CRTC to mandate these same fees on wholesalers who lease access to Bell's telephone lines, my DSL bill is going to *triple*. I'd say that covers waaay more than any justifiable upgrades!

r81984
Fair and Balanced
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join:2001-11-14
Katy, TX

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said by battleop:

"ISPs are not eating any costs. In 99% of the US broadband ISPs are monopolies"

You clearly have absolutely no idea as to what you are taking about. Please show us where A. ISPs are not taking a hit on this and B. where 99% of broadband ISPs are monopolies.

You obviously have no idea what you are talking about.
Your monthly fee pays for your internet connection.
How much do you think the physical cable to your house and the routing equipment costs??? Paying $50 a month to to your ISP is almost all profit for them. If it was not then they would go under after paying tv content provider with $50 a month cable plans.

Google/netflix pays their monthly fees to their ISP.
ISPs get money from everyone to pay for the network and can basically charge any price since broadband ISPs are monopolies.

swintec
Premium Member
join:2003-12-19
Alfred, ME

swintec

Premium Member

said by r81984:

How much do you think the physical cable to your house and the routing equipment costs???

Not sure, can you please tell us? How much does the pole rental cost throughout an entire plant, the line maintenance techs and all the equipment including truck and gas, call center buildings, staff, remote buildings for CMTS and associated equipment, advertisements, peering costs to offload the traffic and the list goes on and on and on.

This isnt just stringing a piece of CAT 5 to each house and plugging it into a 80 dollar Linksys router you know.
Skippy25
join:2000-09-13
Hazelwood, MO

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I am going to assume you did not read the linked article as you are still spewing nonsense. You should read it, there are even pretty pictures with color and all to help you understand better.

This has absolutely nothing to do with peering and thus has nothing to do with what Comcast is trying to claim. Comcast is NOT a peering company. They are trying to be more of a CDN just as Level 3 is, but that is not relevant to any of this beyond the fact that Comcast is attempting to profit from others being CDN's to companies they are not by charging a "toll" to have traffic delivered to their customers.

I am not going to continue to dispute this with you. The facts are out there, not just the he said / she said stuff. You trying to ignore them for the benefit of your argument is not going to change that.

elwoodblues
Elwood Blues
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join:2006-08-30
Somewhere in

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said by r81984:

My cable company sells cable for $50 a month and internet for $50 a month. They make a much smaller profit off the tv after they pay content providers than when they sell internet which requires no payment to content providers.

In Canada the cable companies don't pay what we call the "conventional channels" providers (major Canadian networks, the 4 US networks, etc). However the cableco's do have to pay the freight to get the content to their NOC.

When it comes to the specialty channels, the Cableco's also hold all the cards, most channels do no require mandatory carriage, so each "broadcaster" has to negotiate withe Cableco's for carriage, and trust me if they get more then 50c/subscriber I'd be quite surprised.

The cablecos up here are also the major internet providers and at the same time own substantial broadcasting properties. Americans talk about concentration of the media, trust me, it's much worse in Canada.

r81984
Fair and Balanced
Premium Member
join:2001-11-14
Katy, TX

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said by swintec:

said by r81984:

How much do you think the physical cable to your house and the routing equipment costs???

Not sure, can you please tell us? How much does the pole rental cost throughout an entire plant, the line maintenance techs and all the equipment including truck and gas, call center buildings, staff, remote buildings for CMTS and associated equipment, advertisements, peering costs to offload the traffic and the list goes on and on and on.

This isnt just stringing a piece of CAT 5 to each house and plugging it into a 80 dollar Linksys router you know.

I guess you did not read my post.
Providing internet is cheaper than providing cable tv, but yet they basically charge the same per month for each service.
Their plant is already paid for from the cable TV, internet is just a bonus.
They make a fortune off the internet.

battleop
join:2005-09-28
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Just wondering. How long have your worked in the ISP industry at a level where you are part of the decision making process?
gruntlord6
join:2010-06-10
Barrie, ON

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said by battleop:

"ISPs are not eating any costs. In 99% of the US broadband ISPs are monopolies"

You clearly have absolutely no idea as to what you are taking about. Please show us where A. ISPs are not taking a hit on this and B. where 99% of broadband ISPs are monopolies.

ISPs are NOT eating the cost. You obviously do not understand canadian broadband. The lowest tier plans have a 2gb cap, the highest having a 175gb cap. In the case of UBB with wholesalers its even worse. The wholesaler pays the ISP for bandwidth, provides thier own network after the initial transit, and then the consumer gets billed by the wholesaler and the ISP for overages.

Tell me how that is "eating the cost"

battleop
join:2005-09-28
00000

battleop

Member

"You obviously do not understand canadian broadband."

Very true, seeing as how I don't work for a Canadian ISP and this statement was about "US broadband ISPs are monopolies"