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Cable's Top Lobbyist: Over-Charging Consumers Helps The Poor
Cableco's ramp up overage justification rhetoric after FCC announcement

The last twenty-four hours have seen a renewal in the cap and meter billing debate, after investors like Craig Moffett proclaimed the FCC's new neutrality rules are a giant green light for the kind of low cap, high overage pricing models cable execs have lusted after for years. As we noted this morning, the cable industry wants people to believe these kinds of pricing models are "inevitable." They also want people to conflate real usage-based billing (which might actually be good) with the kind of punitive, high per GB overage models investors and execs would like to implement.

Not coincidentally in lock step with Moffett's missive, cable's top lobbyist Kyle McSlarrow today took to the National Cable And Telecommunications Association blog to give perhaps his last sales pitch for the cable industry's dream broadband pricing paradigm. McSlarrow takes industry rhetoric to new heights, insisting that imposing new, expensive per gigabyte overage fees isn't about making more money, it's about best serving customers and "innovation." McSlarrow goes so far as to suggest that the cable industry's experimentation with such pricing, which thus far has included high flat rate pricing with overages up to $5 per GB layered on top, is about helping the poor:

quote:
The key point is that that we need to focus on what best serves consumers. With all this change, it is necessary to have the flexibility to test new business models – and perhaps new pricing plans – in order to see if they make sense. A usage-based pricing model, for instance, might help spur adoption by price-sensitive consumers at the lower end of the socioeconomic ladder. As Sanford Bernstein analyst Craig Moffett noted in a report issued yesterday,"{u}sage-based pricing for broadband would have profound implications. At the low end, it would allow cable operators to introduce lower priced tiers that could boost penetration and help in efforts to serve lower income consumers."
This is, with no hyperbole intended, all a coordinated con. For lack of being redundant given our last two posts, I'll just reiterate the fact that ISPs are very profitable under a flat-rate pricing system, they're just not profitable enough to please investors, who demand quarter over quarter improvements. McSlarrow's love letter to consumers is disingenuous dreck. Neither Moffett or McSlarrow have any interest in offering lower cost broadband tiers, because the significant majority of cable broadband users (who just check e-mail and Weather.com twice a day) would downgrade to it, costing the industry billions. The industry has repeatedly shown they have absolutely no interest in offering low cost alternatives.

What Moffett and McSlarrow want is to artificially constrict the pipe and jack up costs with a complete disregard for the falling cost of bandwidth and hardware. What they want is to further monetize every bit and increase the per household cost of already expensive U.S. broadband, providing cable operators with economic protection from Internet video -- and massive new leverage over the content ecosystem. Of course McSlarrow can't just come out and say this is simply a money grab and protectionism, so what we get instead is phony altruism, which as we saw with Time Warner Cable's failed metered effort doesn't pass the smell test among consumers -- and only adds insult to injury.
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Murdoc49
Premium Member
join:2009-02-08
Manitowoc, WI

1 recommendation

Murdoc49

Premium Member

These are the low lifes....

that you people are paying with this bi annual rate hikes. Lobbying is unamerican.

Duramax08
To The Moon
Premium Member
join:2008-08-03
San Antonio, TX

Duramax08

Premium Member

Re: These are the low lifes....

Shouldn't lobbying be illegal? Look at it. Its fucking up shit left and right. Its almost like buying votes.

ruraltn
join:2008-05-16

ruraltn

Member

Re: These are the low lifes....

said by Duramax08:

Shouldn't lobbying be illegal? Look at it. Its fucking up shit left and right. Its almost like buying votes.

When the industry that the lobbyist champions donates to political campaigns, it is buying votes.

Cole
@tds.net

Cole

Anon

Re: These are the low lifes....

lobbying isn't unamerian

the problem is that the politicians want to stay in office and the easiest way to win a campaign is with money, so they listen to and some even pander to, big $$$ lobbyists so they get large campaign contributions. many consumer rights (non-profit) organizations use lobbyists, but are not as effective because they cannot "donate" as much to a campaign as the private special interests. remove the need for politicians to sell themselves and you will likely see a change in behavior - problem is a 100% publicly funded campaign system has many issues to work through.
dfxmatt
join:2007-08-21
Crystal Lake, IL

dfxmatt to Duramax08

Member

to Duramax08
there was a law that was overturned - it had said companies can't lobby to get laws in their favor.

if that were reinstated, we'd be good.
XIII
Premium Member
join:2010-06-16
Scottsdale, AZ

XIII to Duramax08

Premium Member

to Duramax08
I agree with you but the US supreme court doesnt, they just made it legal for a corporation to donate unlimited funds to political campaigns and the like.

Duramax08
To The Moon
Premium Member
join:2008-08-03
San Antonio, TX

Duramax08

Premium Member

Re: These are the low lifes....

And this is why america is fucked up. Welcome to the corporations of america.

m35g35
@wideopenwest.com

m35g35 to XIII

Anon

to XIII
and don't forget that the SC said foreign corporations can now participate in the lobbying efforts.
gorehound
join:2009-06-19
Portland, ME

gorehound to Murdoc49

Member

to Murdoc49
lobbying should be made illegal.
we consumers are sick of this bullshit.

cap and tiered plans for the internet.
Fuck Off !!!
cornelius785
join:2006-10-26
Worcester, MA

cornelius785

Member

Re: These are the low lifes....

I was thinking lobbying should be banned out-right, but then realized that too many congressmen are too lazy to 'research' the issues they need to vote on (don't they have various secretaries / aides/ etc. to help them do their job... nevermind). the exchange of money should be made fall under a bribe and thus banned. Furthermore lobbying should be strictly regulated such that the views with the most supporters get the most 'time' to convince congressmen to vote which way or the other, not who has the most money. Then if that can't work, then ban lobbying altogether. I suppose this also leads into campaign reform and money wins elections all to often. All this talk is fine and dandy, but the problem is that in order to change any of this, congressmen have to do the changing.... time for a creation of the ''non-political people oversight board of the government"? :P

Dominokat
"Hi"
Premium Member
join:2002-08-06
Boothbay, ME

Dominokat to Murdoc49

Premium Member

to Murdoc49
said by Murdoc49:

Lobbying is unamerican.

Lobbying is 100% pure American. And Legal, as much as it sucks. Unless we change the rules for lobbyists (ain't likely at all) then we are stuck with the status quo.

newview
Ex .. Ex .. Exactly
Premium Member
join:2001-10-01
Parsonsburg, MD

newview

Premium Member

What a crock

Innovation?

Bullshit . . . plain and simple.

geek
Mad Scientist at Work
Premium Member
join:2002-01-07
Southbury, CT

geek

Premium Member

Lower Tiers may Attract Less Technical Savvy and Raise Costs

If you introduce lower price tiers you may attract less technically savvy people signing up and ultimately driving support prices up as these are the folks who will call support for EVERY little issue service related or not.

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

fifty nine

Member

Re: Lower Tiers may Attract Less Technical Savvy and Raise Costs

The personal computer's price has steadily gone down despite non-tech savvy people buying them.

In fact I would say that it is because more people are buying them.

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

FFH5

Premium Member

Usage based pricing is coming for good or ill

Usage based pricing is coming. The minute companies started offering legal HD video over the Internet and P2P systems made it easy to download copyrighted content illegally, the die was cast.

The only thing up for discussion now is what form UBP will take. The fairest method would involve some flat connect fee(say $10 or 15) and then a standard cost per GB. The more GB you use, the more you pay.

But if customers just can't accept that pricing model, then we will end up with a tiered usage based system instead of the current tiered speed based system. One flat fee up to 10 GB; another flat fee up to 25GB; another flat fee up to 50GB; etc.

Another potential benefit of usage based pricing could be the end of cable modem configuration files that limit speeds since pricing would no longer be based on speed tiers.

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

fifty nine

Member

Re: Usage based pricing is coming for good or ill

The die was cast long before legal HD downloads became available.
Gami00
join:2010-03-11
Mississauga, ON

Gami00 to FFH5

Member

to FFH5
except, your ISPs will take a page out of canada's book, and still do speed tiers PLUS UBB/caps...
ISurfTooMuch
join:2007-04-23
Tuscaloosa, AL

ISurfTooMuch

Member

Re: Usage based pricing is coming for good or ill

said by Gami00:

except, your ISPs will take a page out of canada's book, and still do speed tiers PLUS UBB/caps...

That's exactly what they'll do.

But to comment on the parent, you can't completely do away with cable modem speed restrictions. If you uncapped the modems, a few people downloading large files would overload a node and prevent anyone else from getting much data at all.

And you can bet that, if people have unused data near the end of their billing cycle, they're sure as hell going to use it...unless caps are set so low that everyone goes over.

SimbaSeven
I Void Warranties
join:2003-03-24
Billings, MT
·StarLink

SimbaSeven

Member

Re: Usage based pricing is coming for good or ill

said by ISurfTooMuch:

And you can bet that, if people have unused data near the end of their billing cycle, they're sure as hell going to use it...unless caps are set so low that everyone goes over.

Unless they have "Rollover MBs", which I really doubt it.

I'm betting that the Internet will see much less usage if this crap passes. That means the ISP's won't have to upgrade anything anytime in the future and more money in their pocket.
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25 to ISurfTooMuch

Member

to ISurfTooMuch
You obviously do not understand networking then. As the network will work no different if it was working at 10% utilization or 90% utilization. Therefore 1 person, is not going to eat up all the bandwidth from all the network so others can't use it. No worse then you do at any company that has hundreds/thousands of user's going through a 100MB pipe.

If anything, line speed would allow any and all users to get what they need and get off the network quicker, regardless of what it is. And per byte billing would bring down the overall usage as extreme users start going into the high end $$ tiers.

Switeck
@comcast.net

Switeck

Anon

Re: Usage based pricing is coming for good or ill

"As the network will work no different if it was working at 10% utilization or 90% utilization."

Untrue, unfortunately. In a packet-switching environment, average pingtimes goes up rapidly even before 60% utilization hits. By 90% utilization on what's essentially a hub system (cablemodem upload channel), packet loss starts occurring and everyone's connectivity becomes really poor.

For ADSL DSLAMs, they often have very small backhauls relative to the total bandwidth all the ADSL modems could pull if in use at once. There may be 300-500 modems connected sharing a 100 mbit/sec fiber backhaul.
moonpuppy (banned)
join:2000-08-21
Glen Burnie, MD

moonpuppy (banned) to FFH5

Member

to FFH5
said by FFH5:

The only thing up for discussion now is what form UBP will take. The fairest method would involve some flat connect fee(say $10 or 15) and then a standard cost per GB. The more GB you use, the more you pay.

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!

You know that will NEVER happen. Flat connect will be what it is now and go way up from there.

dvd536
as Mr. Pink as they come
Premium Member
join:2001-04-27
Phoenix, AZ

dvd536 to FFH5

Premium Member

to FFH5
said by FFH5:

The only thing up for discussion now is what form UBP will take. The fairest method would involve some flat connect fee(say $10 or 15) and then a standard cost per GB. The more GB you use, the more you pay.

FAIR? in america????? NEVER!
GREEDY isps want their $50 plus low caps and high overages!
Storage_Guy
join:2006-04-30
Benton Harbor, MI

Storage_Guy

Member

...

In the long run all I see high per GB overage models doing is pushing customers to lower tiers, or at lease it does for me.

For our house it's simple, we have two Xboxs that we use to stream Netflix mostly in HD, we have no cable television. On average between Netflix, the Internet, and everything else we do we consume about 9GB of data a day. I pay about $45 a month for a 7mbps Time Warner cable connection which is about the most I am willing to pay.

If my internet connection cost at my current consumption level goes over $60 I will go to the basic $19.99 768kbps connection which is enough to surf the Internet, play Xbox live, and I will get DVDs in the mail.

GlennLouEarl
3 brothers, 1 gone
Premium Member
join:2002-11-17
Richmond, VA

GlennLouEarl

Premium Member

UBB is BS

It costs an ISP to increase capacity/bandwidth (more bits per second) or to enlarge its footprint (more customers to serve), both of which are paid for--over and over again--by the current monthly fees. It costs an ISP no more to transmit 1 GB than it does to transmit 1 MB; whether you "consume" 250GB or 25GB, your "cost" to the ISP is the same. In fact, over time--as equipment is upgraded--it costs the ISP less. And we're supposed to pay more for increasing their profit margin? Yeah, right. UBB is not PAYG. If my ISP institutes as PAYG plan, that's fine. If, however, my ISP institutes a UBB plan, I'll drop them like the hot turd they are. I won't pay extra to be ripped off.
ToiletMint
join:2009-12-07
Pine River, MN

ToiletMint

Member

Re: UBB is BS

^ What he said!

I know first hand what it takes to implement capacity improvements while working for TDS telecom, and I can tell you that leasing a light-wave from ATT is not that bad considering.

What I see happening here is that Online services like Netflix, GoogleTV, Hulu, will work with company's like Level 3 and make it a nightmare for the On and Off ramps like Comcast/time Warner.

Lets see how fast the internet goes when you have to go around major back-hauls.

NOCMan
MadMacHatter
Premium Member
join:2004-09-30
Colorado Springs, CO

NOCMan

Premium Member

Re: UBB is BS

Good luck to those of us stuck in duopoloys.
tmc8080
join:2004-04-24
Brooklyn, NY

tmc8080

Member

bye cableco

cable companies have been taking their customers for granted for far too long. Verizon and AT&T will gladly take them off the cablecos' hands. so, good luck in this quest to gouge the consumer. the other guys (telcos) have big brother watching over their shoulder, so don't think that the cablecos can goad them into futher price/service collusion because it's NOT going to work.

try REAL innovation, that fake spray-on stuff gets real messy at the customer service line with consumers cancelling acounts in droves.

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

fifty nine

Member

Re: bye cableco

Then why aren't Verizon and AT&T deploying gigabit fiber to your house?

ajoke
@pencor.com

ajoke to tmc8080

Anon

to tmc8080
said by tmc8080:

cable companies have been taking their customers for granted for far too long. Verizon and AT&T will gladly take them off the cablecos' hands. so, good luck in this quest to gouge the consumer. the other guys (telcos) have big brother watching over their shoulder, so don't think that the cablecos can goad them into futher price/service collusion because it's NOT going to work.

try REAL innovation, that fake spray-on stuff gets real messy at the customer service line with consumers cancelling acounts in droves.

the phone companies for real innovation..you can't be serious
ISurfTooMuch
join:2007-04-23
Tuscaloosa, AL

ISurfTooMuch

Member

Muni fiber, anyone?

If the cable companies aren't careful, they're going to encourage even more cities to look at muni fiber. Right now, the thing that's keeping interest in check is the view by many that their Internet service is, if not spectacular, at least good enough. And, for the most part, Internet subscription charges haven't skyrocketed the way cable TV has. If that ever changes, look for the natives to get restless.

Still, I think the cable companies are going to try. IMHO, just like the studios, these companies are interested in either increasing profits or of killing off potential competitors, even if that strategy is incredibly shortsighted. What they don't seem to get is the pursuit of ever-increasing profits isn't always the smartest course of action because it angers customers, who will start looking for ways to shrink or even eliminate their bills. It's very possible to price yourself right out of the market, a fact that these guys choose to ignore.

MonkeyLick78
join:2002-01-27
Hixson, TN

1 recommendation

MonkeyLick78

Member

Re: Muni fiber, anyone?

Yeah, I could see a strong increase in Muni Fiber if they tried this. It could be the silver lining in the coming storm.

winsyrstrife
River City Bounce
Premium Member
join:2002-04-30
Brooklyn, NY

winsyrstrife

Premium Member

It sucks but

They can only get away with what we let them. They can charge whatever we want, but if we don't pay, they don't profit.

1 month boycott of residential cable Internet. I wonder how that would look on the earnings report.

JasonOD
@comcast.net

JasonOD

Anon

Re: It sucks but

Boycott one month of what? Usage? They won't care and would benefit from it. Canceling the service and then renew? Way too much trouble. Refuse to pay one months bill? Good luck with the FICO hit.
mexicali100
join:2010-01-04
Schenectady, NY

1 recommendation

mexicali100

Member

I've read my last "ISPs Suck" headline.

I'm not offended, just bored with reading the same thing over and over again. Goodbye DSLReports. I'm deleting you from my iGoogle page. Good luck in the future.

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

fifty nine

Member

Re: I've read my last "ISPs Suck" headline.

I must have missed the "ISPs suck" article amongst all of the "cord cutting revolution" articles.

Karl Bode
News Guy
join:2000-03-02

Karl Bode to mexicali100

News Guy

to mexicali100
Don't think I've ever said "ISPs suck," though I have been known to note that lobbyists and ISP marketing departments suck. Frequently. When you've got a top lobbyist claiming that charging consumers $5 per gigabyte is about helping the poor, I think it's newsworthy to point that out and deconstruct the false claim.

Sorry you disagree, and hope you'll return sometime.
sltevis
join:2010-08-25
Ephrata, PA

sltevis

Member

Cut it

I canceled my cable Monday. I have Windstream DSL (no cap) broadband 6 mbps. I put up an antenna and get about 8 channels. I watch Netflix and also subscribe to Hulu plus. I am a cable cutter, you can be too.

MonkeyLick78
join:2002-01-27
Hixson, TN

MonkeyLick78

Member

Re: Cut it

said by sltevis:

I canceled my cable Monday. I have Windstream DSL (no cap) broadband 6 mbps. I put up an antenna and get about 8 channels. I watch Netflix and also subscribe to Hulu plus. I am a cable cutter, you can be too.

That's more than enough entertainment for any normal person. I'm Netflix all the way and don't miss a bit of it. I absolutely despise commercial TV.
ShellMMG
join:2009-04-16
Grass Lake, MI

ShellMMG to sltevis

Member

to sltevis
I cancelled our DirecTV on Tuesday, after 15 years. I'm limited to VZW but am trying to get the local WiMAX guys to call me back.
ksharp250
join:2010-09-24
Middletown, PA

ksharp250

Member

Did no one else think this?

You know...for months now I have been reading this site and stop the cap (www.stopthecap.com) and others about topics like these. What kills me is that every time an ISP or cable operator tries to justify usage based billing, the default to the stance that a lower cap = lower price to get to socio-economically (poor, welfare, etc) areas increasing cable penetration.

Because yea...NOT ONE of those poor families own Xbox 360s or would ever have even heard of Netflix and YouTube to attempt to use a newly acquired broadband connection to do what everyone else uses with it. Right? Or....wait.....

Does no one else even consider that when saying caps are good?
ISurfTooMuch
join:2007-04-23
Tuscaloosa, AL

ISurfTooMuch

Member

Re: Did no one else think this?

Of course no one believes that. And not one of the caps that have been tried or implemented thus far has involved lowering the base price. Besides, there's nothing stopping the cable companies from offering economy plans right now that include lower speeds and/or a low cap.

As for allowing them to build out more areas, that's utterly laughable. I can't count the number of times I've heard of a cable company telling a homeowner that they almost reach that, in order to come that last few hundred feet, the homeowner will need to pay some astronomical amount. Hell, it's even happened to a friend of mine. And, in an even more extreme case, several years back, a friend living in an apartment complex wanted to sign up with Knology. Knology served his building, but their lines stopped at the apartment ACROSS THE HALL, and they refused to go any farther.

These rationalizations for caps are just that: rationalizations. They're BS, plain and simple.

megarock
join:2001-06-28
Fenton, MO

megarock

Member

Re: Did no one else think this?

said by ISurfTooMuch:

Of course no one believes that. And not one of the caps that have been tried or implemented thus far has involved lowering the base price. Besides, there's nothing stopping the cable companies from offering economy plans right now that include lower speeds and/or a low cap.

Charter did it. Caps were imposed the last week of November and not only did prices not go down they sent out with the December bill that in January rates will go up.

capecoddah
join:2005-03-18
Yarmouth Port, MA

capecoddah

Member

But...

I AM poor!!!
When do I get my deal?

NOCMan
MadMacHatter
Premium Member
join:2004-09-30
Colorado Springs, CO

NOCMan

Premium Member

And insure they stay low end.

At the worst people will get the cheapest slowest connection that suits their needs, while the cost of network expansion is forced on those who actually use those connections.

Some would say that's only fair, but when everyone is paying 60 dollars a month on average if they use it to it's capacity or not, you suddenly get 60% of users paying 30 a month for a slower tier, the other 40% may be paying 120 a month for the same service they had at 60 a month or face caps lower than the 60 a month price point that forces them to pay overage charges.

The next best unlimited model is really how we regulate taxes on auto's. A truck does more damage to a road weight wise and thus pay higher yearly taxes to help pay for the road. There are price differences, but they're not as wide, and you get unlimited use of the road. This closely resembles how we bill for broadband today for those still on unlimited plans.

In the end investors get more money, and the commoners get screwed.

megarock
join:2001-06-28
Fenton, MO

megarock

Member

..

CUT THE CORD.

If you have no other options drop your package to the lowest and cheapest available.

Yes, you might have to deal with slowness for awhile. But if you don't the 'inevitable' will become the norm and then it won't matter how fast your net is - it will always be limited.

Stand up now or face the consequences. If you can drop all your services with cable operators - do it and switch to anyone who doesn't rely on TV service for their revenue. If you can't limit your spending with them as much as possible.

If not that inevitable will happen. Right now you have a chance to stop it.
Ecwfrk
join:2001-03-02
Fort Smith, AR

Ecwfrk

Member

The circle of monopolies

We've come full circle.
Back in the beginning of the internet, all internet access was metered. Earthlink, Compuserve, AOL and other ISPs were all on a per minute metered scheme. When the cablecos and telcos got involved in it, they initiated the flat rate per month plans and the old per-minute ISPs roared that it was unfair and would put them out of business. It was the cable/telcos who argued that unlimited access was necessary to promote innovation and boost penetration among the less affluent to justify their unlimited access business models.

Now that the cable/telcos have pushed most 3rd party ISPs out of business both with reduced prices and regulation lobbying, they want to reclaim the immensely profitable metered billing plans that made those early ISPs hugely profitable mega corporations. And with the much greater penetration of the Internet and Internet based services today, the turn to a metered system would make those old ISPs look like small potatoes businesses.
At least, until regulators get enough pressure from other parties who would begin to suffer with metered billing plans such as online retailers, advertisers, and pretty much anyone who makes money by presenting people with bandwidth heavy things used to entice people to buy things. When companies like Amazon start losing money to B&M stores because people can't afford to browse though thousands of items online because it eats too much of their e-mail bandwidth and instead go to local stores, regulators will be pressured by those companies to open the Internet up to 3rd party ISPs offering lower priced access who will do to the Cable/Telcos what they did to the old 3rd party ISPs and thus begin the whole circle all over again. But by then, the current regulators, investors and executives will have reaped the benefits and it'll only be the consumers who suffer, and who cares about them?

Anon6
@comcast.net

Anon6

Anon

The only...

People this will help is wall street and the cable companies.

packetscan
Premium Member
join:2004-10-19
Bridgeport, CT

packetscan

Premium Member

Sure it's innovation

Innovating a way to make more money by providing less.