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FCC Boss Heartily Embraces Caps, Overages
While Ignoring All of the Potential Pitfalls
by Karl Bode Wednesday 23-May-2012 tags: prices · competition · fcc · business · consumers
Tipped by Linklist See Profile
While he was of course speaking to his audience at this week's Cable Show in Boston, FCC boss Julius Genachowski gave his full-throated support to the cap and overage pricing model. "Business model innovation is very important," told the Cable Show attendees, adding that "usage-based pricing could be healthy and beneficial." "There was a point of view a couple years ago that there was only one permissible pricing model for broadband," said Genachowski, adding that "I didn't agree."

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The problem is that while many people (including us) have argued many things about metered billing, that there should be only one pricing model has never been among them. Most of the conversations have centered around things like the fact the caps and overages imposed aren't fair, aren't tied to economic realities, and have major anti-competitive implications if abused by a broadband duopoly.

One of the larger issues, utterly ignored by Genachowski, is that while ISPs want to bill like utilities -- they refuse to be regulated like utilities -- so nobody, including the FCC, is checking to confirm meter accuracy. As such, it's not that people don't want ISPs to explore new pricing models, they just don't want them to be punitive -- and when you've got a marginally-competitive market, it's more than likely that they ultimately will be.

While the FCC professes to be concerned with "bill shock" and high subscriber prices, they generally brush aside aggressive and anti-consumer pricing as "creative." One prime example: ISPs have been burying below-the-line fees to subscriber bills to jack up the advertised price post sale -- a practice the FCC has never been even-slightly concerned about. New broadband pricing is fine, but not if the FCC's going to ignore anti-competitive abuses, meter accuracy, or aggressive over-billing.

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jchambers28

join:2007-05-12
Alma, AR

bull shit

some one needs to boot him from office.
WernerSchutz

join:2009-08-04
Sugar Land, TX

Re: bull shit

Is there anyone left in the US Gov't representing the people or is it now completely dominated by corporations for the benefit of corporations ?

aciddrink

join:2000-08-26
Lexington, KY
Reviews:
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Re: bull shit

said by WernerSchutz:

Is there anyone left in the US Gov't representing the people or is it now completely dominated by corporations for the benefit of corporations ?

but don't you know, "corporations are people" in the eyes of the US government.

BF69
Premium
join:2004-07-28
Camden, TN

Re: bull shit

said by aciddrink:

said by WernerSchutz:

Is there anyone left in the US Gov't representing the people or is it now completely dominated by corporations for the benefit of corporations ?

but don't you know, "corporations are people" in the eyes of the US government.

Mitt Romney said so.
pandora
Premium
join:2001-06-01
Outland
kudos:1

Hope and fail?

So it's Mitt or Hope and Change? ... If this is Hope and Change, maybe we should give Mitt a try.

HaloFans

join:2006-12-18

1 edit

Re: Hope and fail?

lol wut.

Mitt is an obvious corporate apologist as he is famously quoted, "Corporations are people my friend."

He would approve caps/overages or whatever "benefits" the corporations obtain so that they will "trickle down" to the consumers.

If anything, Karl and user Facetious are simply reminding everyone that our telecom industry needs more regulation, not deregulation.

Day by day, year by year, the USA continues to fall further behind in Internet speeds at affordable prices. Instead, money used to improve infrastructure is thrown at propaganda and lobbying to tell people that our Internet structure, even though it's the furthest away from the truth.

Money = free speech. A sad reality of the times.
pandora
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Reviews:
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Re: Hope and fail?

said by HaloFans:

lol wut.

Mitt is an obvious corporate apologist as he is famously quoted, "Corporations are people my friend."

He would approve caps/overages or whatever "benefits" the corporations obtain so that they will "trickle down" to the consumers.

If anything, Karl and user Facetious are simply reminding everyone that our telecom industry needs more regulation, not deregulation.

Day by day, year by year, the USA continues to fall further behind in Internet speeds at affordable prices. Instead, money used to improve infrastructure is thrown at propaganda and lobbying to tell people that our Internet structure, even though it's the furthest away from the truth.

Money = free speech. A sad reality of the times.

Hope and change has turned to despair and fail. The most open government ever is now the most closed. Gitmo isn't closed. The bi-partisan hope and change President is now the most partisan.

FCC members regularly run away to those they regulated (I think this happened recently with an Obama appointee).

Mitt can't run things worse than they are now.

As to regulation, no, what the industry needs is competition, a lot of it.
--
"People demand freedom of speech as a compensation for the freedom of thought which they seldom use."

HaloFans

join:2006-12-18

Re: Hope and fail?

Since when did the Republicans care about people's rights?

It's so obvious they don't especially for the middle class and minorities.
pandora
Premium
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2 edits

Re: Hope and fail?

said by HaloFans:

Since when did the Republicans care about people's rights?

The Republican party was founded to free blacks from the slavery of Democrats. The first elected woman to Congress was a Republican who voted in the House before she could vote to put herself in, Republican states gave women the right to vote before the federal government did. So since the beginning Republicans have been concerned about people's rights.

Jim Crow, slavery, separate but equal, blacks only, and what not, all Democrats. A Democrat Governor (Wallace) tried to stop school integration, and was stopped by a Republican President (Eisenhower). You should learn a bit about history.
--
"People demand freedom of speech as a compensation for the freedom of thought which they seldom use."
kerya666

join:2002-12-20
Valrico, FL

Re: Hope and fail?

What you pointed out is what republican were. There is almost no connection between them in this day and age. Both dems and reps now run a fusion policy where they will take up a stance if it benefits them and that is all. Basically they are both fakes and liars if it is needed to win some seats or election.

I absolutely cannot agree with any one party on majority of their "stances". I really wish there were more pro-people independent candidates. I rather vote for Mickey Mouse than any of the current clowns in the running.

Oh and to FCC boss: "Kill him with fireee!"
pandora
Premium
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Re: Hope and fail?

said by kerya666:

What you pointed out is what republican were. There is almost no connection between them in this day and age. Both dems and reps now run a fusion policy where they will take up a stance if it benefits them and that is all. Basically they are both fakes and liars if it is needed to win some seats or election.

Some of what you say is true, some not. Both parties have problems with being purchased by constituencies. At the same time, Democrats still like racial discrimination, today it's called reverse discrimination. Republicans for the most part would prefer not to have racial preference. Personally, my preference would be to have those who have been disadvantaged culturally and economically get extra help.

Elizabeth Warren is an example of whats wrong, claiming to be an American Indian. Similarly Barry Obama may have claimed to be Kenyan, which could have opened the doors to Harvard Law School for him.

Elizabeth and Barry weren't exactly disadvantaged as a kid growing up in an inner city with great poverty at a failed public school. I'd prefer for kids who go through that to get help, regardless or race.

As to the FCC, I think candidate Obama promised an end to the revolving door, but it seems the door revolves faster now, at least at the FCC.

We can't let regulators know they will get cushy jobs with the regulated if they behave appropriately (for the regulated). Neither party has been particularly good at clearing this up, but it seems the current administration is very very bad at it.
--
"People demand freedom of speech as a compensation for the freedom of thought which they seldom use."

Jack_in_VA
Premium
join:2007-11-26
Mathews, VA
kudos:1
said by HaloFans:

lol wut.

Mitt is an obvious corporate apologist as he is famously quoted, "Corporations are people my friend."

He would approve caps/overages or whatever "benefits" the corporations obtain so that they will "trickle down" to the consumers.

If anything, Karl and user Facetious are simply reminding everyone that our telecom industry needs more regulation, not deregulation.

Day by day, year by year, the USA continues to fall further behind in Internet speeds at affordable prices. Instead, money used to improve infrastructure is thrown at propaganda and lobbying to tell people that our Internet structure, even though it's the furthest away from the truth.

Money = free speech. A sad reality of the times.

Hey Obamabot Mitt has nothing to do with this issue or discussion. Direct your criticism at Obama

HaloFans

join:2006-12-18

Re: Hope and fail?

Yeah let's blame everything on our president when there's a 1/3 of the government called Congress that doesn't know how to work.

We all secretly want our democracy to be run like dictatorship.

Selective memory.

Did you people forget how many times Congress faced shutdown over the past four years?

Jack_in_VA
Premium
join:2007-11-26
Mathews, VA
kudos:1

Re: bull shit

said by BF69:

said by aciddrink:

said by WernerSchutz:

Is there anyone left in the US Gov't representing the people or is it now completely dominated by corporations for the benefit of corporations ?

but don't you know, "corporations are people" in the eyes of the US government.

Mitt Romney said so.

Messiah Obama is his boss. Not Romney. Study your government set up.
WernerSchutz

join:2009-08-04
Sugar Land, TX
Yes, except schizophrenic "people" and obsessed w/ making a profit at any cost with no remorse and not being punishable for any crimes committed.

They are not "people" and, even if they were, would be people that should be locked up in an mental asylum or prison, not given free rein to "vote" with an endless supply of money as "free speech".

Hmmm. Ultra rich schizophrens with endless money and no repercussions for anything they do. Neat.
LucasLee

join:2010-11-26
kudos:1

Re: bull shit

said by WernerSchutz:

Hmmm. Ultra rich schizophrens with endless money and no repercussions for anything they do. Neat.

your comment brings to mind the extremely excellent documentary The Corporation (www.thecorporation.com) which psychoanalyzes the actions of corporations, and determines that if they indeed are people, then they are sociopaths, which, under normal circumstances would be prevented from making the destructive actions they regularly commit by society at large.

it's worth a watch for anyone interested in this topic.
MDBill
Premium
join:2012-05-20
Kensington, MD

Re: bull shit

And "The Corporation" is available for streaming on Netflix.

dks7

join:2004-05-31
Omak, WA
Since the US government IS a corporation since the end of the civil war I would say you are spot on.
nasadude

join:2001-10-05
Rockville, MD
Reviews:
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said by WernerSchutz:

Is there anyone left in the US Gov't representing the people or is it now completely dominated by corporations for the benefit of corporations ?

that second part

mmay149q
Premium
join:2009-03-05
Dallas, TX
kudos:48
said by WernerSchutz:

Is there anyone left in the US Gov't representing the people or is it now completely dominated by corporations for the benefit of corporations ?

There was Ron Paul, but no one wanted to vote him in so we could actually fix these issues, otherwise there's his son Rand Paul and many other new people coming in.

Matt
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HaloFans

join:2006-12-18

1 edit

Re: bull shit

I'll give it to you that Ron Paul would make a very good foreign policy advisor.

Everything else though is crazy due to the neoliberalism and philosophies of the 'invisible hand" which serves to mean deregulation.

I never realized the preachings of Ayn Rand were so popular until Ron Paul came along.

The telecoms got their deregulation in 1996 in exchange for promises for more competition. What resulted was mass cannibalism of once the former AT&T formed back together what is today.

Essentially, deregulation didn't promote competition; it promoted monopolies.

mmay149q
Premium
join:2009-03-05
Dallas, TX
kudos:48

Re: bull shit

said by HaloFans:

I'll give it to you that Ron Paul would make a very good foreign policy advisor.

Everything else though is crazy due to the neoliberalism and philosophies of the 'invisible hand" which serves to mean deregulation.

Essentially, deregulation didn't promote competition; it promoted monopolies.

»youtu.be/7nhRgg8Jx94

So in this video he's talking about free market competition, he wants to deregulate the system and let anyone who wants to jump in the business have the rights/easyness to do so thus creating a competitive market, how do you fight "everything else is crazy"? And deregulation didn't promote monopolies, people who were willing to sell their businesses to larger companies is what promoted monopolies for multiple reasons.

Another thing about that is that if you have a truly competitive market do you really think monopolies will continue to exist when mom and pop can open their own ISP locally as well as 5 others and all the sudden people have more choices and can vote with their wallets? That's the problem today, you can't vote with your wallet, if you leave company A to go to company B company B is usually doing the same thing as company A, maybe some minor differences and people are just choosing the lesser of the 2 evils, same as with Republicans vs Democrats.

Matt
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gorehound

join:2009-06-19
Portland, ME

Re: bull shit

+1
This guy is an outright asshole !!!
It would not surprise me one bit to watch this government fall within the next 5 -15 years.It is obviously totally corrupt and it is so obvious that Millions of people are pissed off and probably more than ever seen before.Little by little even Mr. & Mrs. Normal are waking up to that fact.
Politicians do not Represent anyone but themselves and their Wallet !!!
nasadude

join:2001-10-05
Rockville, MD
Reviews:
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said by jchambers28:

some one needs to boot him from office.

wouldn't do a bit of good - the next person in the job will be just as bad or worse. the whole govt needs to be razed to the ground and replaced.

GlennAllen
Sunny with highs in the 80s

join:2002-11-17
Richmond, VA

OK,

which ISP is he trying to get a nice, cushy job with once he fails at this one?

Linklist
Premium
join:2002-03-03
Longport, NJ
kudos:5

Re: OK,

said by GlennAllen:

which ISP is he trying to get a nice, cushy job with once he fails at this one?

Genachowski & major industry players are too smart to pay anything now and especially in cash. The payoffs, if they have in fact been promised, will come in the form of campaign contributions if Genachowski ever decides to run for office. Or in the form of lucrative consulting contracts or job offers 2 yrs after Genachowski leaves the FCC.

cdru
Go Colts
Premium,MVM
join:2003-05-14
Fort Wayne, IN
kudos:7

Re: OK,

said by Linklist:

Genachowski & major industry players are too smart to pay anything now and especially in cash. The payoffs, if they have in fact been promised, will come in the form of campaign contributions if Genachowski ever decides to run for office. Or in the form of lucrative consulting contracts or job offers 2 yrs after Genachowski leaves the FCC.

No FCC commissioner in at least 40 years has held an elected position. Almost all of them have gone on to work for the telecommunication industry directly, a lobbyist group on behalf of the telecommunications industry, or law firms that represent...you guessed it, the telecommunications industry.

Mr Anon

@k12.il.us

I disagree.

This isn't to this article directly as I didn't read more than the headline but to the whole caps and overages as a total.

One of the biggest arguments to me seems to be that they can't support unlimited. It would seem like they were only doing it because they didn't expect people to use it and now that they are they don't want us to, saying they can't do it!

Shouldn't a business have a model that accounts for growth and upgrades over time? For example Amazon and amazon prime, they have added so much to it since I first got it, namely amazon video, and the price hasn't changed. I know I order a lot more from them and I've seen no "limit" of benefits.

In short: Shouldn't the payment made each month in the past and present not only gone for current costs but also to saving for future upgrades? I can see a different price for using a different service/access methods but not this. This reminds of the horrible days where shady web hosts would give you storage but wanted to charge you for FTP access.

Camelot One
Premium,MVM
join:2001-11-21
Greenwood, IN
kudos:1

Re: I disagree.

Your logic is sound, but only applies when a business is run like a business. And they aren't anymore. They are now nothing more than short term investments, and their value is tied only to how much they can bring in, and how little they spend, today. Day traders don't care that a lack of investment in the network today might mean a total loss of business 6 months from now. Nor do they care that policies and products rolled out today might screw the company (or it's customers) down the road. They care only about today, and thus, the business operates as such.
--
Intel i7-2600k /ASRock P67 Extreme4 /4x 4Gb G.Skill /2x Intel 510 series 250Gb SSD /3x WD20EADS 2TB /2x PNY GTX 260 /Silverstone 850W /Custom water cooler /Antec Twelve-Hundred

See 6 replies to this post
Wilsdom

join:2009-08-06
It doesn't make sense because they are making it up. They never present evidence of congestion, of dropping income, or burdensome infrastructure expenditures. There is evidence they are making record profits. They are just trying to continue to maximize their profit by minimizing consumption, and protect the important TV and movie branches of their monopolies.
wheelbarrow

join:2010-01-06
USA
kudos:1

WHY

Why should I have to leave the country to get a truly bleeding-edge internet connection from a company who doesn't want to f*ck my wallet?

cableties
Premium
join:2005-01-27

Re: WHY

said by wheelbarrow:

Why should I have to leave the country to get a truly bleeding-edge internet connection from a company who doesn't want to f*ck my wallet?

Because if you left, you'd more than likely have to pay VAT and other higher taxes than here. Yes, irony that US created the internets, but other countries subsidize it for their own.

Instead of being born here with a SS#, we should all get S-Corp!
--
Splat

CableConvert
Premium
join:2003-12-05
Atlanta, GA
You could go to Chattanooga...but go quickly before they outlaw that like they are trying to do in every other state (thanks ALEC)

camaro92
Question everything
Premium
join:2008-04-05
Westfield, MA

Blah

"One of the larger issues, utterly ignored by Genachowski, is that while ISPs want to bill like utilities -- they refuse to be regulated like utilities"

To me that is the only thing that matters.
Donut

join:2005-06-27
Romulus, MI

Re: Blah

I agree with you 100%. If it quacks like a duck and if it walks like a duck its a damn duck. If they want to charge like utilities then they can be governed the same way.
--
Mr. Donut

W7PSK
Just Me
Premium
join:2000-12-04
Everett, WA

Why wouldnt he embrace it

He and this whole political system is in the back pocket of the Telco/cable conglomerates.
firedrakes

join:2009-01-29
Arcadia, FL

pretty much what everone else said

this is bs and the guy after a few years will get hired by the cable companys
old_wiz_60

join:2005-06-03
Bedford, MA

Just wondering...

How much money the Cable Companies slipped into the right pockets to get the "full-throated support"? Bribery rules.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

Expects to be retiring soon to some cushy lobbyist job....

... Sickening really.

Monopolization of ISP services will lead to another large economic sector where the USA hemorrhages jobs and innovating services to foreign companies who will be free to bring services to consumers that can't be economically sustainable selling to US consumers due to all the off-the-top money sucking our duopolies will impose.

This nation implodes from within. Enjoy the ride.
--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
brawney
Premium
join:2002-03-02
Frederick, MD

Douchebag!

The guy is a douchebag! And you're right, he will probably work for the cable industry in a few years.

»www.urbandictionary.com/define.p···ouchebag
Sammer

join:2005-12-22
Canonsburg, PA

Re: Douchebag!

No, he's just a crony capitalist.

Pakapab
Premium
join:2002-03-17
Cap Haitien
Reviews:
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·Clear Wireless

Re: Douchebag!

said by Sammer:

No, he's just a crony capitalist.

HaHahaha..... yup, just take a look at the expression on the dudes face!!! Says it all!!
Paxio
Premium
join:2011-02-23
Santa Clara, CA
kudos:1

Do you prefer caps or usage billing?

Honestly, since ISPs (well, small ISPs anyway) pay for their transport by a loose usage-based model, they must either limit their customers somehow or charge them if they use "too much." (The threshold of which will vary according to the price of the service and cost of the transport.) Even a "slow" 5M connection could consume something like 13TB in a month if used 24/7. Who would use a connection this much? Bittorrent users and other P2P services, typically.

The ISP pays by a model called "burstable billing" which is not precisely a "cents per bit" model so it's hard to correlate this expense. But I can say that the transport for this user would cost far more than the ISP receives in monthly revenue.

So ISPs limit customers with either overt "caps" or softer "acceptable use policies" which allow them to move a problem user to a higher tier, or discontinue service for the egregious data users who won't migrate to the higher tier.

Under this reality, is usage-based billing really a non-starter?

What if a company offered BOTH billing models? Flat-rate pricing with some sort of data limit, and a TRUE usage-based billing model that more closely reflected the ISPs actual cost of providing the data? No ISP to my knowledge offers this flexibility today, but it seems it might offer the best of both worlds.

Comments?

TheHelpful1
Premium
join:2002-01-11
Upper Marlboro, MD

Re: Do you prefer caps or usage billing?

said by Paxio:

What if a company offered BOTH billing models? Flat-rate pricing with some sort of data limit, and a TRUE usage-based billing model that more closely reflected the ISPs actual cost of providing the data? No ISP to my knowledge offers this flexibility today, but it seems it might offer the best of both worlds.

[soapbox]I'd be fine with metered billing. So long as that meter is accurate and independently verifiable, of which none of the recent ones are. For flat rate fee, don't get on the airwaves and advertise unlimited data at blazing speeds when the reality is you are going to cap me at a paltry 2GB and then throttle my 75/50 service down to 3/1 until the next billing cycle.

As previously stated, your company should have been investing in its infrastructure as it was growing to accommodate the load. Waiting until the last minute then scrambling for a half-assed solution is what kids do in elementary school when they have a book report due the next day that they were told about two weeks ago.

Its no different than public roads. The roads are crap, filled with more pot holes than dotted lines so we need to raise the gas tax everywhere and introduce a mileage tax for the hybrid cars to get the roads back to a good condition. Wait, where did all the tax money go that you've been collecting since the road was in a new condition? Oh that's right, you raided that fund to cover up your non-existent budget skills when you burned through all the other trust funds [/soapbox]
--
"My weakness is that I care too much"
Kamus

join:2011-01-27
El Paso, TX
Howbout, neither?
The speeds cable companies offer make it impossible to congest the network to begin with.
war59312

join:2001-03-02
Elgin, SC

What an ass!!

I swear if I ever meet these jackasses in real life...

Big "accidental" fall coming their way..

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