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InvalidError

join:2008-02-03
kudos:5
reply to the cerberus

Re: Caps should be outlawed !

said by the cerberus:

But I dont see why the CRTC couldn't decree that caps/month don't accurately bill customers.

Simple: it is not the CRTC's job to tell companies how to pass costs down to customers. If a company decides to average bandwidth costs on a per-GB basis, that is their choice and privilege as a service provider.

This is a bit like capitalism vs communism. With socialism you spread costs across the whole customer base regardless of usage. With capitalism, you seek the most effective method of monetizing your investments.

The per-km charge on car rental does not accurately represent the cost of a km at any particular time and place, it represents the lumped average cost of a km. Similarly, with Bell's new CBB rates, the lumped average cost of a GB to 3rd-party ISPs is around $0.25.

the cerberus

join:2007-10-16
Richmond Hill, ON

said by InvalidError:

said by the cerberus:

But I dont see why the CRTC couldn't decree that caps/month don't accurately bill customers.

Simple: it is not the CRTC's job to tell companies how to pass costs down to customers. If a company decides to average bandwidth costs on a per-GB basis, that is their choice and privilege as a service provider.

This is a bit like capitalism vs communism. With socialism you spread costs across the whole customer base regardless of usage. With capitalism, you seek the most effective method of monetizing your investments.

The per-km charge on car rental does not accurately represent the cost of a km at any particular time and place, it represents the lumped average cost of a km. Similarly, with Bell's new CBB rates, the lumped average cost of a GB to 3rd-party ISPs is around $0.25.

Actually, I wasnt saying they should outlaw caps, like the OP suggested.

I was simply saying the CRTC should either require ISP's to inform the customer that GB/month (cap) doesnt acurratly bill customers, or have information about caps on thier own website.

Then its the customers choice to sign up or not.

I'm not saying that ISP's shouldnt be able to charge whatever they want.

Simply that customers have the right to know its not calculated to accurately bill the traffic that you cause.

InvalidError

join:2008-02-03
kudos:5

said by the cerberus:

Simply that customers have the right to know its not calculated to accurately bill the traffic that you cause.

There is no such thing as a way to "accurately bill" based on the instantaneous usage cost of every single customer since the exact costs vary continuously. The best that can reasonably be achieved is an averaged cost of some sort and averaged costs are everywhere, they aren't anything new.

If everyone was adjusting prices based on a very short term cost fluctuation basis, the price of everything would change on a per-second basis.

If you wanted "accurate cost" billing for electrical power, the rates would vary on a per-second basis due to variations in water levels at electric dams, wind speeds at wind farms, clouds/snow/rain at solar farms, load on the distribution network, losses, etc. but most power companies only update their price once or twice a year based on the lumped average production and distribution cost of a kWh.

"Accurate billing" sounds nice in theory but it is not practical in the real world. Whatever proportional scheme ends up implemented, averaging is always required to keep it practical.


El Quintron
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reply to the cerberus

said by the cerberus:

Simply that customers have the right to know its not calculated to accurately bill the traffic that you cause.

I think honest non-usurious market rates would be fine here... something like X$ for your base speed plus $0.02 to $0.05/GB if we're going to go down that road.

Realistically caps aren't about fairness they're about punishing you for getting services off the internet that are offered by legacy media.
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the cerberus

join:2007-10-16
Richmond Hill, ON
reply to InvalidError

said by InvalidError:

"Accurate billing" sounds nice in theory but it is not practical in the real world. Whatever proportional scheme ends up implemented, averaging is always required to keep it practical.

Nonsense. All you have to do is pass the cost down to the consumer for the traffic they caused. Its very simple.

The examples you gave (1KB on a 1Tbps pipe) wont ever happen in real life.

What teksavvy is doing makes sense, there are times of high load, and low load. real traffic has usage patterns. like rush hour.

in other words, only billing when the user is actually adding to traffic. then figure out the cost of bandwidth during that time.
like el quinton suggests its a max of $0.05/GB.
Then you can add up all the REAL TRAFFIC caused over the month.
Even if there was no usage patterns there is no reason why you couldnt factor in time of day and if there was traffic or not.

InvalidError

join:2008-02-03
kudos:5

said by the cerberus:

Nonsense. All you have to do is pass the cost down to the consumer for the traffic they caused. Its very simple.

What teksavvy is doing makes sense, there are times of high load, and low load. real traffic has usage patterns. like rush hour.

Even if there was no usage patterns there is no reason why you couldnt factor in time of day and if there was traffic or not.

So you are telling me that Teksavvy's $0.50/GB rate is "accurate" even though this is around twice their back-end costs (including Bell's CBB) and applies regardless of whether that extra usage occurred during an actual cost-driving peak or not? lol.

As I have already said, the "real cost" of individual subscribers varies on a second-by-second basis, there is no practical way to "accurately" bill usage based on fractional contribution to cost-driving factor so companies have to choose simpler, more practical metrics to average/distribute costs on. Whatever model and rates get chosen, someone will inevitably find reason(s) to protest.

bt

join:2009-02-26
canada
kudos:1
reply to the cerberus

said by the cerberus:

said by InvalidError:

"Accurate billing" sounds nice in theory but it is not practical in the real world. Whatever proportional scheme ends up implemented, averaging is always required to keep it practical.

Nonsense. All you have to do is pass the cost down to the consumer for the traffic they caused. Its very simple.

in other words, only billing when the user is actually adding to traffic. then figure out the cost of bandwidth during that time.
Then you can add up all the REAL TRAFFIC caused over the month.
Even if there was no usage patterns there is no reason why you couldnt factor in time of day and if there was traffic or not.

That would require significantly more complex tracking systems than are currently in place, and even more significantly staffed call centres to deal with the customers who don't understand the usage portions of their bills.


El Quintron
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said by bt:

That would require significantly more complex tracking systems than are currently in place, and even more significantly staffed call centres to deal with the customers who don't understand the usage portions of their bills.

Access charge + usage charge would work fine in this case, as long as both were reasonable.

The problem with Caps isn't the overage charge itself, it's the fact that it's designed to be punitive, which is anti-innovation, and protectionist.
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bt

join:2009-02-26
canada
kudos:1

said by El Quintron:

said by bt:

That would require significantly more complex tracking systems than are currently in place, and even more significantly staffed call centres to deal with the customers who don't understand the usage portions of their bills.

Access charge + usage charge would work fine in this case, as long as both were reasonable.

The problem is that as the cerberus was explaining it, the usage charge per unit of measurement would be variable, depending on how much everyone else was using it at the time.

Just imagine the people that have trouble figuring out what they've used now... they'd never figure out a system that also factors in peak loads.


El Quintron
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said by bt:

Just imagine the people that have trouble figuring out what they've used now... they'd never figure out a system that also factors in peak loads.

A system that measures peak loads although technically correct, may be logistically unfeasible, due to the complexities you just mentioned, that's why I proposed something that I considered to be a fair, non-punitive UBB.

The "caps system" for lack of a better name, is designed to be punitive... this needs to stop, and ISPs have to get back into the business of moving bits, not protecting TV, and their other legacy businesses.
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InvalidError

join:2008-02-03
kudos:5

said by El Quintron:

The "caps system" for lack of a better name, is designed to be punitive... this needs to stop, and ISPs have to get back into the business of moving bits, not protecting TV, and their other legacy businesses.

How low would the UBB rate need to be for you to not consider it "punitive" anymore? When I tried calculating the all-inclusive real cost of a GB a few years ago, I came up with a lower bound of $0.025/GB and upper bound of $0.05/GB. While much cheaper than Bell's ~$0.25/GB with CBB, even $0.025/GB would still be somewhat chilling to people who are allergic to paying anything extra.


El Quintron
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said by InvalidError:

While much cheaper than Bell's ~$0.25/GB with CBB, even $0.025/GB would still be somewhat chilling to people who are allergic to paying anything extra.

The "chill" comes from the fact that there's a usage compenent built into the access fee... hence not making it very appealing to go over your caps.

Here's a better question, assuming there was no usage component built in, how much would you charge for 25/10 service? How much would you charge for 6/1 service?
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InvalidError

join:2008-02-03
kudos:5

said by El Quintron:

Here's a better question, assuming there was no usage component built in, how much would you charge for 25/10 service? How much would you charge for 6/1 service?

If I was in charge, 6/1 would not exist where VDSL2 is available (no point in offering it since VDSL2 ports cost the same regardless of speed) and 25/10 without any included usage would be around $20/month.

If it costs ~$100 000 to deploy and operate a DSLAM for 10 years and you have an average of 80 subscribers on it, the DSLAM costs $11/month/sub. Add $3/month to cover copper costs, $2/month/sub to cover CO-side (aggregation) equipment costs, a 15% markup to cover unexpected/marginal costs and profit, the bandwidth-invariant part of VDSL2 access comes out to about $20/month.


dillyhammer
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You're hired. Make it so.

Mike



El Quintron
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said by dillyhammer:

You're hired. Make it so.

Mike

What he said.
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Guspaz
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reply to InvalidError

I think it's silly to say that a DSLAM will last for 10 years... With the rate that cable is upgrading their systems, current VDSL2 deployments will not be relevant for high-value markets in 10 years.
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El Quintron
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said by Guspaz:

I think it's silly to say that a DSLAM will last for 10 years... With the rate that cable is upgrading their systems, current VDSL2 deployments will not be relevant for high-value markets in 10 years.

Of course not, but even if VDSL deployments are only good for another 5 years, it doesn't increase the costs to the consumer by much.
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Guspaz
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Well, based on his math the $20/mth becomes $31/mth, which is a decent chunk since you have to also use it to provide low-end service.
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El Quintron
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said by Guspaz:

Well, based on his math the $20/mth becomes $31/mth, which is a decent chunk since you have to also use it to provide low-end service.

If it were up to me I'd probably just phase out the low end service
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InvalidError

join:2008-02-03
kudos:5
reply to Guspaz

said by Guspaz:

Well, based on his math the $20/mth becomes $31/mth, which is a decent chunk since you have to also use it to provide low-end service.

If you shorten the service life, you also reduce the OAM costs associated with that lifespan and the cost only goes up $2-3.

As for "low-end service", the port cost would be the same since none of the costs considered in my costing exercise were bandwidth/speed-related. As Quintron said, I would simply not offer such a service since it makes no sense in the port+usage model I derived for Dilly and Quintron over the last couple of posts.