45612019 (banned)
join:2004-02-05
New York, NY |
45612019 (banned)
Member
2011-Aug-15 1:12 pm
He forgot a level.Level 0 - "Bandwidth caps"
There is nothing more evil an ISP can do than this. Censorship can always be bypassed, search hijacking can be ignored, and ISPs handing data over to law enforcement can always be gotten around by encrypting all your activities.
But the evil of bandwidth caps cannot be ignored. There is no solution for this greed and usage limits are the biggest threat to the Internet today. |
|
| |
Dane has talked about bandwidth caps before. My guess is that he didn't bring them up again because he already covered the issue, and because sonic.net doesn't have caps. |
|
rradina
join:2000-08-08
Chesterfield, MO |
to 45612019
I don't know if I would go so far as to call it a threat. While I agree that caps aren't consumer friendly or pro Internet (at least they way they are currently employed), they really just impede progress. For instance, if I come up with the next social networking craze but it eats bandwidth, even though it's free to use it would suffer because folks would meter their activity to avoid the network nanny charges.
However, if we were to really meter bandwidth (no minimum, no maximum, just pay for what you use) and there was a direct relationship between the true cost to deliver that data (plus a decent profit for the carrier), I think all of our costs would go down.
What we have today is kind of like billing for telephone calls in hour increments. It's just crazy. |
|
 Oh_NoTrogglus normalus
join:2011-05-21
Chicago, IL |
Oh_No
Member
2011-Aug-15 1:52 pm
said by rradina:I don't know if I would go so far as to call it a threat. While I agree that caps aren't consumer friendly or pro Internet (at least they way they are currently employed), they really just impede progress. For instance, if I come up with the next social networking craze but it eats bandwidth, even though it's free to use it would suffer because folks would meter their activity to avoid the network nanny charges.
However, if we were to really meter bandwidth (no minimum, no maximum, just pay for what you use) and there was a direct relationship between the true cost to deliver that data (plus a decent profit for the carrier), I think all of our costs would go down.
What we have today is kind of like billing for telephone calls in hour increments. It's just crazy.
It would be impossible to have real metered billing and for an ISP to be profitable. ISPs would not be able to cover all the fixed costs of the physical line and equipment to your house. Those things are not cheaper because you use your connection less. Your internet connection is almost 100% fixed costs, so it makes no sense to have metered billing. Using your connection more or less has almost no effect on the costs of the network. What works is what we have done from 1995 to 2011. Internet should be unlimited and you pay a fixed price for your tier. |
|
|
BlueC
join:2009-11-26
Minneapolis, MN |
BlueC
Member
2011-Aug-15 2:05 pm
While I agree, I think it's still appropriate for residential ISPs to have the contract leverage to (passively) enforce "residential-use only".
I agree that UBB is simply for profit, as it doesn't take into consideration of peak/off-peak usage.
I would disagree that almost 100% are fixed costs. Outside of ILECs, most CLECs and other independent ISPs have significant recurring costs to supply capacity to their network (both WAN and MAN). |
|
rradina
join:2000-08-08
Chesterfield, MO |
to Oh_No
So if I apply your reasoning to a brick-and-mortar retail store chain, Sam's and CostCo are probably the only retailers capable of making a profit. The rest are just cooking their books and doomed to bankruptcy.
If I apply it to car manufacturers, they too are cooking their books because I don't have to belong to a car club that pays for their billion dollar manufacturing plants all so they can build and sell me a car.
I just don't understand that line of thought.
What you need to understand is I don't like metered billing either and I agree with you that we should be able to have unlimited bandwidth for some set, monthly fee. However, that doesn't mean that a truly metered service is IMPOSSIBLE. The cost per byte and average monthly usage needs to be set a rate that pays for all the property, plant and equipment depreciation and maintenance. They could even offer a deal so that the cost per byte drops as you reach certain usage plateaus.
We don't have metered services today. We have some bizarre money grab from monopolistic/duopolistic corporations whose investors are expecting get-rich-quick schemes. They aren't satisfied with a 5% dividend payout. They want to double their money every three years and any company that doesn't will be devalued and dumped by the market. |
|
1 recommendation |
to BlueC
You can disagree if you want, but a network whether it is running at 0% capacity or 90% capacity has little cost difference. Virtually everything in the network is purchased as a fixed cost.
The ONLY time it is not fixed is when you are dealing with a small provider that does not have good peering agreements and then you are talking about fractions of a penny for large amounts of data. |
|
 rchandraStargate Universe fan
Premium Member
join:2000-11-09
14225-2105
EnGenius EAP1250
|
to BlueC
#include " why ISPs should not be utilities" Let's just say for a moment I were on board with running an I[SA]P like a utility (with UBB). There are any number of models which could be applied, as there are a wide variety of ways utilities bill; it's not just limited to flat rate and pay-per-(prefix)byte-moved. For example, National Fuel, my gas provider, bills some fixed rate every month, which includes some (small) volume of gas. Then there is a charge per (volume, therm, something), which is further broken down into supply, delivery, etc., then taxes and such are added on. So to make an analogy to an IAP, there could be some flat rate charged per month which goes towards equipment and equipment maintenance, optionally including your first (prefix)bytes transferred, and then a hopefully reasonable charge per (prefix)bytes transferred. I further really can't be on board with it though because it's my understanding there aren't companies which charge per-byte-moved anymore, just charge for some CIR. I also am very much opposed to this peak/off-peak notion, simply because I have yet to be shown how it costs the IAP anything more to move bytes during some peak period. Again, if this were the upstream policy, I could relate, and change my thinking on that. But as it is, the costs are relatively stable over the course of a day or week. The only minor variation on that which I can think of is local electrical providers and their darned peak/off-peak billing, and the fact that a non-idle processor (such as in a router) will draw more electric power than an idle one. But I doubt the difference is a large enough percentage of operating costs to even matter. Again, I plead possible ignorance, and I'm thoroughly willing to be told by a credible source that my understandings are wrong. |
|
Oh_NoTrogglus normalus
join:2011-05-21
Chicago, IL |
to rradina
said by rradina:So if I apply your reasoning to a brick-and-mortar retail store chain, Sam's and CostCo are probably the only retailers capable of making a profit. The rest are just cooking their books and doomed to bankruptcy.
If I apply it to car manufacturers, they too are cooking their books because I don't have to belong to a car club that pays for their billion dollar manufacturing plants all so they can build and sell me a car.
I just don't understand that line of thought.
What you need to understand is I don't like metered billing either and I agree with you that we should be able to have unlimited bandwidth for some set, monthly fee. However, that doesn't mean that a truly metered service is IMPOSSIBLE. The cost per byte and average monthly usage needs to be set a rate that pays for all the property, plant and equipment depreciation and maintenance. They could even offer a deal so that the cost per byte drops as you reach certain usage plateaus.
We don't have metered services today. We have some bizarre money grab from monopolistic/duopolistic corporations whose investors are expecting get-rich-quick schemes. They aren't satisfied with a 5% dividend payout. They want to double their money every three years and any company that doesn't will be devalued and dumped by the market.
Sorry, but you can't compare the costs of how an ISP is to things like retail, manufacturing, etc. Of course that does not make sense if you want to try to compare unlike things. If you want to do 100% metered billing and you divide the costs by all the available bandwidth to the byte, then if the network is not maxed out 24/7 then you will not make enough money. If you base your byte rate on 4/7 then those that use their connections more than 4 hours a day unfairly pay more above the cost of the network than others. The easiest thing to do is have no metered billing and just make sure you charge enough to cover the costs of that line so you know everything is paid for. |
|
| Oh_No |
to rchandra
said by rchandra:#include "why ISPs should not be utilities"
Let's just say for a moment I were on board with running an I[SA]P like a utility (with UBB). There are any number of models which could be applied, as there are a wide variety of ways utilities bill; it's not just limited to flat rate and pay-per-(prefix)byte-moved. For example, National Fuel, my gas provider, bills some fixed rate every month, which includes some (small) volume of gas. Then there is a charge per (volume, therm, something), which is further broken down into supply, delivery, etc., then taxes and such are added on. So to make an analogy to an IAP, there could be some flat rate charged per month which goes towards equipment and equipment maintenance, optionally including your first (prefix)bytes transferred, and then a hopefully reasonable charge per (prefix)bytes transferred.
I further really can't be on board with it though because it's my understanding there aren't companies which charge per-byte-moved anymore, just charge for some CIR. I also am very much opposed to this peak/off-peak notion, simply because I have yet to be shown how it costs the IAP anything more to move bytes during some peak period. Again, if this were the upstream policy, I could relate, and change my thinking on that. But as it is, the costs are relatively stable over the course of a day or week. The only minor variation on that which I can think of is local electrical providers and their darned peak/off-peak billing, and the fact that a non-idle processor (such as in a router) will draw more electric power than an idle one. But I doubt the difference is a large enough percentage of operating costs to even matter.
Again, I plead possible ignorance, and I'm thoroughly willing to be told by a credible source that my understandings are wrong.
I would say you keep thinking about it wrong by comparing unlike things. Natural gas can be stored and used later. Nothing is lost when you are not using it. They charge you the fixed amount to pay their pipeline costs, everyone must pay this (even when they do not use gas) or their fixed costs are not covered for the money they spent on the 24/7 connection. Then they charge you usage for what gas you use as it COST them money for the gas separately than their pipelines. Bandwidth cannot be stored, it is use it or lose it. Most ISPs are not paying for bandwidth, they have paring agreements. Your internet connection is basically just made of fixed costs and does not have usage costs. So with internet you would be billed a fixed amount regardless of your usage and the company will be very profitable. |
|
rchandraStargate Universe fan
Premium Member
join:2000-11-09
14225-2105 ARRIS ONT1000GJ4
EnGenius EAP1250
|
rchandra
Premium Member
2011-Aug-15 6:39 pm
One, you've confirmed my suspicions about IAP costs.
Two, I never said that was an exact analogy; it was just to make the point that many, many billing models have been devised. I apologize of you inferred gas service was anything like providing Internet service. I could have equally stated any one of a number of power company billing scenarios (which is arguably more apt since likewise the ability to store electricity on a large scale is rather limited) ranging from peak/off-peak, tiered KWh, and so on; or telephony which likewise on some plans (not mine) has a fixed per month charge, then adds either per call or per minute charges. The analogy (in terminology only, mind you) of the gas company having a base charge per month for installing and maintaining the pipeline is a good one in the sense of installing and maintaining the Internet pipeline.
Three, I'm not agreeing it's just at all. In fact, unless as stated my assumptions are proven wrong, I'm totally against UBB. See the linked BBR post. My main objection is lack of control.
I'm also against it because UBB doesn't magically come into existence. I oppose it, based on quite a potential for my bill to go up because the IAP needs to install and maintain yet another gadget (for billing purposes), and in general, it just complicates the whole mess. |
|
rradina
join:2000-08-08
Chesterfield, MO |
to Oh_No
I don't buy it. By your own logic, your scheme will have the bandwidth hogs pay less than those who just do some light surfing and e-mail. That's why the ISP's claim we all should welcome metered billing.
You can fix that by dropping the price once you go beyond four hours. Don't the electric, gas and water companies do this? Aren't their business models the same? You don't get any free electricity, gas or water. While electricity and gas companies expenses rise with increased usage because there is a cost to create/acquire the raw product they deliver, what about the water company? Where I live they draw water from the Missouri and Mississippi rivers. As far as I know, mother nature doesn't charge a fee and their sanitation costs should be fixed, sans adding chlorine and fluoride, since they build to a certain capacity just like ISPs.
Try again to convince me why an ISP is so special that it cannot be run like any other business. |
|
| |
to rradina
said by rradina:So if I apply your reasoning to a brick-and-mortar retail store chain, Sam's and CostCo are probably the only retailers capable of making a profit. The rest are just cooking their books and doomed to bankruptcy.
If I apply it to car manufacturers, they too are cooking their books because I don't have to belong to a car club that pays for their billion dollar manufacturing plants all so they can build and sell me a car.
I just don't understand that line of thought.
What you need to understand is I don't like metered billing either and I agree with you that we should be able to have unlimited bandwidth for some set, monthly fee. However, that doesn't mean that a truly metered service is IMPOSSIBLE. The cost per byte and average monthly usage needs to be set a rate that pays for all the property, plant and equipment depreciation and maintenance. They could even offer a deal so that the cost per byte drops as you reach certain usage plateaus.
We don't have metered services today. We have some bizarre money grab from monopolistic/duopolistic corporations whose investors are expecting get-rich-quick schemes. They aren't satisfied with a 5% dividend payout. They want to double their money every three years and any company that doesn't will be devalued and dumped by the market.
Car manufacturers: Once you buy a car, it doesn't cost them anything for that car anymore. ISPs: Setting a cost per byte is not possible because a byte of traffic doesn't COST them anything! Running their entire nationwide network to transfer 1 byte per month would cost the same as transferring 1PB per month. Peak usage is the issue, since the peak determines how much bandwidth they require. If the usage was spread out, the same amount of data could be transferred at a constant rate, and a smaller pipe could be used. But since the traffic all needs to go through NOW from the hours of 5pm-midnight, they have to use a pipe big enough for that. |
|
rradina
join:2000-08-08
Chesterfield, MO |
But that car won't last forever just like an ISPs network won't last forever. Eventually the customer will want another car and just like the ISPs network, the car manufacturers property, plant, equipment and deals with suppliers will all have to be maintained so they can make you a new car. The feedback loop is just in a time warp in that it's much, much slower.
It doesn't matter if their per unit of product costs are zero. They still have to deliver it and they can measure what you use and develop average usage and divide their network maintenance costs + profit by those average usages and establish what they need to charge per metered unit.
I'm just not convinced they cannot take their total bytes served (for residential), divide that into their expenses + some profit margin and derive what each byte costs. Now all you have to do is put a meter on everyone and multiply by the per byte cost.
If that's unfair, you develop a tiered approach where the first 10GB is at the top rate and it drops every 10GB after that until reaching some minimum no matter how much more you use. You could look at this as the opposite of our progressive tax system.
For the life of me I just don't understand why this won't work. Perhaps it's not fair or optimal but why do we think these businesses are so damn special because there are no variable costs per unit served?
Is a rental company the same? They charge by the hour but their variable costs are also zero. Why do they meter costs? Why not just let you keep the damn thing as long as you want for one low price? Granted, there are some temporal problems with that analogy because it cannot be in two places at once but networks aren't that dissimilar. Only their speed provides the illusion that everyone works at the same time.
What about water companies? Why do they meter their product? It seems that they don't have variable costs or minimal variable costs.
In fact the sewer district in my area used to charge flat fees based on the size of your house and acreage. They switched to basing your waste bill off of your inbound water usage in the winter quarter. |
|
Oh_NoTrogglus normalus
join:2011-05-21
Chicago, IL |
to rradina
said by rradina:I don't buy it. By your own logic, your scheme will have the bandwidth hogs pay less than those who just do some light surfing and e-mail. That's why the ISP's claim we all should welcome metered billing.
You can fix that by dropping the price once you go beyond four hours. Don't the electric, gas and water companies do this? Aren't their business models the same? You don't get any free electricity, gas or water. While electricity and gas companies expenses rise with increased usage because there is a cost to create/acquire the raw product they deliver, what about the water company? Where I live they draw water from the Missouri and Mississippi rivers. As far as I know, mother nature doesn't charge a fee and their sanitation costs should be fixed, sans adding chlorine and fluoride, since they build to a certain capacity just like ISPs.
Try again to convince me why an ISP is so special that it cannot be run like any other business.
Why do you keep trying to compare unlike things? The costs for eletricity, water, gas are based off a tangible product that can be stored, bought and sold. For an ISP you are just paying for the connection and equipment. That connection and equipment costs the same if you use it a lot or a little. You cannot store bandwidth and the costs of the network are not connected to usage like with those other utilities. I dont have a scheme, but in reality there is no such thing as a hog, you can only use what your ISP gives you. In reality your connection costs almost 100% the same if you use it very little or if you use it 24/7. For an ISP actually who is more profitable is way more based on who calls customer service. The person maxing out their connection 24/7 and who never calls tech support is way more profitable than the customer that only uses email and calls support for every stupid thing. |
|
| Oh_No |
to rradina
said by rradina:I'm just not convinced they cannot take their total bytes served (for residential), divide that into their expenses + some profit margin and derive what each byte costs. Now all you have to do is put a meter on everyone and multiply by the per byte cost. Then there is no guarantee for the ISP to make enough money to pay for their expenses. Bandwidth usage is not predictable and vary widely for each user. What will happen is those that use their connection more pay for the costs of those that use their connection less which is unfair. Those that use their connection less do not pay enough money to the ISP to cover the expenses. It makes no sense to charge by the byte. Should auto manufactures just charge yearly fees to use cars based on mileage so those that use their car less get a car below cost and those that use their car more then pay way more than the cost???? Is that fair? If your goal is to pay expenses and be profitable, then why not just skip the BS and charged a fixed rate so you are guaranteed to pay your expenses and to profit? |
|
rradina
join:2000-08-08
Chesterfield, MO |
Forest for the trees? I agree with you. I've been taking the other side only because true UBB would work better than the twisted hybrid UBB companies operate today. Whether either of these models vs. flat-rate all-you-can-eat models is better depends on who benefits. Clearly, today's UBB is better for ISPS. True UBB and flat-rate models are better for consumers (unless you are an egregious hog).
My main complaint is that we don't have either. My current cell plan charges me $45 for the first 4GB and then $10/GB over that. At this price, apparently $5 is the overhead they need to earn from me to cover their fixed costs.
Of course we know this isn't true but the math is there.
What I'd prefer is that AT&T just charge me $5 for the first byte and then another $10 each time I crest the next GB. My current usage for this month (last day of billing cycle) is 1.9GB. That means I would have paid $25 for my connection this month instead of $45. Of course many believe the extra $20 is a tethering fee but it doesn't matter when I hit my cap, from then on it's $10/GB. I can reduce that somewhat if I agree to an even higher plan (with a higher cap) and lower per GB charges.
What's BS is for $25 I get 2GB but I cannot tether. Why do they care how I use my GBs? |
|
| rradina |
to Oh_No
Why do you keep drawing distinctions based on whether or not the product is physical or some kind of service?
Does a water company have usage costs? Don't they build to a capacity like ISPs and whether or not they deliver 100 million gallons or 100 billion gallons, the raw material they use is free? Do their sanitation costs really rise that much when they clean a lot more or are they relatively fixed sans minor linear relationships in power consumption and chemical treatment costs?
Expenses are expenses and however a business decides to cover those expenses, if they make money, why isn't that a valid model? Why wouldn't I want those that use a lot to pay a lot and if I use a little, to pay a little? I've explained many times that this can be mitigated by progressively charging less as usage rises but you never seem to take note.
True UBB is perfectly legitimate scheme and the maintenance costs for a physical network running by 100 homes is the same whether or not all of them subscribe or 50 of them subscribe. This is a similar risk to having them all subscribe but paying nothing unless they actually use some bytes.
Retail stores live and die by volume. As long as they have sufficient volume to cover their fixed costs, the rest is gravy. Why can't an ISP operate this same way and have the risk that in some months, usage might be too light to pay the bills and in other months it's like Christmas?
There's a reason the day after Thanksgiving is called Black Friday. It's when retailers finally make a profit. Many lose money the rest of the year. Why do we want to view an ISPs business model as requiring an exception to these risks? |
|
Oh_NoTrogglus normalus
join:2011-05-21
Chicago, IL |
to rradina
said by rradina:(unless you are an egregious hog). There is no such thing as a hog. Also you can always tether. ATT has no right to limit the features of your phone that you own. If ATT wants to limit the phones/features you can use they should not use GSM where you connect any phone you want. They dont care about how much GBs you use. All they care about is they set a price that they feel will give them way more money than the fixed rate billing, while letting them pretend they have lower prices up front and those that go over the limits are "hogs" and "evil" and deserve to pay more. |
|
| Oh_No |
to rradina
said by rradina:Why do you keep drawing distinctions based on whether or not the product is physical or some kind of service?
Does a water company have usage costs? Don't they build to a capacity like ISPs and whether or not they deliver 100 million gallons or 100 billion gallons, the raw material they use is free? Do their sanitation costs really rise that much when they clean a lot more or are they relatively fixed sans minor linear relationships in power consumption and chemical treatment costs?
I hope you realize that in some areas they do not charge for water by the gallon, because as you seem to understand it does not make sense when they have plenty of water. They charge everyone a water fee on their property taxes so you have unmetered water and all the fixed costs are paid for. Water can be billed much better by the fixed costs than by usage unless your someone that barely uses water then you would rather have a by the gallon so you do not have to actually pay your fair share of the water system. A retail store could never operate on a fixed fee where you can just take whatever you want as the costs are based on what you buy or use. The costs for an ISP is not based on what you use thus the UBB does not work.What you speak of is not a rule and does not make sense for an ISP. Why would you base your billing on something that has virtually nothing to do with your costs??? UBB is not legitimate if you based the usage prices off of something that has nothing to do with the actual costs. For UBB to work you need to base it on usage that is actually directly tied to the costs. |
|
rradina
join:2000-08-08
Chesterfield, MO |
I'd change the word "work" to the phrase "make sense". That is, for UBB to make sense to the rest of us, it should be based on something tied to the costs. That doesn't stop them from billing in a manner that doesn't make sense and UBB does work even when usage isn't truly tied to incremental costs.
In my area, I get charged based on how much water I use and then the sewer company bases their monthly bill by looking at the quarterly inbound water consumption. The idea is that's the amount you send into the sanitary sewer system since we don't water lawns, gardens, fill swimming pools or wash cars in the winter quarter.
Whether or not billing like this makes sense, they still do it even though both systems are built to a certain capacity and have few incremental costs.
You keep saying UBB doesn't work for ISPs but it does. Whether or not it makes sense or is a raw deal for who receive the bill is entirely different question.
Regarding the retail example, at one point I believe you claimed that UBB would cause ISPs to never make money. I wholeheartedly disagree. As I said, every day a retailer takes the risk that they won't cover their fixed caused with their variable sales. Why is it different for an ISP just because they have limited or no incremental costs? I agree that a retailer can never offer all you want for a flat fee. (They could but the flat fee would be so high, there would be no buyers.) It just doesn't work for them because they have mostly incremental costs. Just because an ISP doesn't have significant incremental costs, why do you think that invalidates a UBB model?
The only thing that invalidates a UBB model is if it's not feasible to measure the usage by which you bill. For instance, charging someone for every hour they wear a pair of sunglasses. It could be done but it's impossible to determine such a metric short of hiring someone to watch you 24 hours a day. Obviously that kills UBB for the sunglasses industry.
I suppose there is one other thing that invalidates a UBB model. If there's competition and it offers a better deal with their flat-rate plans. This is what torpedoed AT&T when it divested the baby bells and was left with the LD business. Competition stepped in and folks realized they'd been getting screwed for years and AT&T was a rotting corpse until it's child yanked it out of the nursing home and asked it to come live with it. |
|
