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Craig Moffett Whines DOJ Cap Investigation Will Raise Rates
Ignoring That He's Been Pushing for Higher Rates for 10 Years

Over the last ten years there's been no bigger champion for low caps and high per byte overages than Sanford Berstein telecom analyst Craig Moffett, whose clients obviously like the idea of subscribers paying more money for the same product -- while the cost to deliver that product continues to drop. Moffett urged AT&T to eliminate unlimited data (they did), and championed Time Warner Cable's effort to impose ridiculously low caps and absurdly-high overage fees.


Like any good short-sighted investor, Moffett has urged companies to not upgrade their networks, insiting that caps and overages are the "next generation of communications." The irony of course is those telcos who listened and didn't upgrade their networks are now having their lunch eaten by cable providers on a massive scale, which, if Moffett's firm and client investment interests lean heavily toward cable operators, is something that's working out rather well for him and them.

Less network investment, less competition, higher prices. Great for investors, not so great for you.

It's with that background in mind that it's amusing to see him respond to this week's news of a DOJ investigation into usage caps by telling anyone who'll listen that the investigation means higher rates for consumers. Peter Kafka at All Things D listened, breaking down Moffett's argument as such:

quote:
Broadband providers are already moving away from broadband plans that charge everyone the same price, as long as their use stays under a certain cap, and toward usage-based pricing....A federal investigation means that all the cable guys move [toward usage based billing], with speed. “Additional scrutiny from the DOJ would likely definitively end caps… and instead usher in a regime of [usage-based pricing] that would ultimately be even more threatening to online video providers than caps themselves."
In other words, a stock jock who has aggressively been pushing for rate hikes for consumers for the past ten years believes that a regulator doing its job will result in rate hikes for consumers. Moffett's been hoping for caps and overages for as long as this website has been around, and now that he's finally getting them he's complaining that a government investigation into caps and overages will result in -- caps and overages? Makes perfect sense. If you're an inhalant abuser.

Anyone pretending that ISPs need any excuse to raise rates or impose new per byte price hikes (government or otherwise) hasn't been paying attention. What will actually happen is the government, who has already given their breathless support to these price hikes, will ask a few questions, then write off these efforts as simple "creative" billing, ignoring the fact they're anti-consumer and are being used to choke over the top video alternatives.

What actually does drive steep per-byte pricing fees isn't government -- it's competition, or the lack thereof. Companies in markets with limited competition will engage in price gouging, and ISPs in markets with competition won't.

Most recommended from 25 comments


digitlman
join:2009-12-29
Cary, NC

2 recommendations

digitlman

Member

Bah

Screw Craig Moffet.

Asshole.

cdru
Go Colts
MVM
join:2003-05-14
Fort Wayne, IN

2 recommendations

cdru

MVM

Craig Moffett

Does Craig look as much of a douche in real life as he does in his publicity photo?