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NY Times Stumbles Into Usage Cap Debate
Without Asking Any of the Right Questions

The New York Times this week is running a story by Brian Stelter taking a closer look at broadband data caps -- without actually taking a closer look at broadband data caps. The story skips entirely over the fact that consumers have violently opposed such pricing (as we saw with Time Warner Cable in 2008 -- and like most mainstream tech stories, refuses to ask ISPs to prove why a switch from flat rate to overages is necessary either financially or technologically (hint: it isn't). It does touch briefly on how these caps could be a problem for content providers, something the mainstream technology press seems to have only just realized.

Susan Crawford does a good job tackling this in an article that refreshingly takes the Times to task for incomplete reporting. The biggest gaffe the Times makes is omitting the fact that imposing overages is a price hike -- a price hike that can only be imposed by companies that exist in uncompetitive markets. Crawford notes the Times goes out of its way to tie congestion to the need for such caps, despite this simply being patently false:
quote:
The placement of this idea in the story seems to suggest that there is some connection between congestion or high usage and the need for the cable distributors to create usage tiers. There is no basis whatever for this. Cable distributors have a choice: They could maintain the 90+ % margins they enjoy for data services and the astonishing levels of dividends and buybacks their stock produces, or they could rearchitect their networks to serve obvious consumer demand. But they are in harvesting mode, not expansion mode. And no competitor is pressuring them to expand.
The Times also barely brushes on the real motivation for such usage caps: to crush Internet video and protect legacy cable TV revenues:
quote:
They want to make sure that only their own premium video products are successful, and they can twist all the dials to make sure that happens. They can re-define services (calling their own content “specialized” and exempting it from caps or usage-based billing), they can withhold programming (particularly sports and live specials and first-run premium content) in concert with their colleagues, or charge so much for it that it won’t make sense to compete with them online, they can treat the bits coming from non-partners badly through their control over in-home devices as well as the pipe itself…endless endless ways to control.
We've seen time and time again now how when the mainstream press covers the issue of caps, they mindlessly regurgitate that the caps are necessary due to congestion or financial necessity, failing to ask a single hard question of ISPs. They also confuse real "usage based billing" with what the carriers are really pushing toward -- existing, already-expensive flat-rate pricing with new per gigabyte fees layered on top. It's a price hike being imposed unnecessarily in anti-competitive markets by legacy turf protectors, resulting in consumers paying more money for the same product.
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Os
join:2011-01-26
US

1 recommendation

Os

Member

A Media Will Not Bite the Hand That Feeds

This is systemic of the problems of corporate media. When the reporting can potentially challenge sponsorship opportunities, does journalistic integrity prevail or does the chase for the almighty dollar? The NYT feels the need to report something, but if it peddles something not on the company line, they run the risk of losing Time Warner Cable's advertising dollars, for example. This is why most media explicitly for business (think WSJ) is merely a mouthpiece, not a tool for accountability.

A corporate media has no incentive to report on the problems within corporations, just as a government-owned media has no incentive to report on the problems within government. Neither form of ownership can really give us, the people, the truth with all subjects.
Wilsdom
join:2009-08-06

Wilsdom

Member

Re: A Media Will Not Bite the Hand That Feeds

Not surprising, because the internet is the enemy of the NYT. It kissed its wife, it raped its dog, it put a company that used to reliably generate fat profits on the Endangered Bullshitters List.

cableties
Premium Member
join:2005-01-27

cableties

Premium Member

Something smells at NYtimes...

hmmm.

(Thanks for those links, Karl)

I suspect it might have to do with future agreements (wink wink) with ISPs (E.g Verizon, Comcast,...) to ignore NYtimes subscribers (of digital content) exceeding caps due to the amount of daily news and videos watched.

You know, just like Xbox or HBOGo and those subscribers not getting penalized...

Didn't someone say that 4-5% of the internet users are the 90% hogs? So... they know whose suckin at the pipes (A series of tubes), plug them/penalize them. Not the 95% that use 5% of the bandwidth...(oh that is not as profitable...I see the greed)

Double Espresso, anyone?

Soon to see pay-per-packet!
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Asking the right questions?

This blog didn't bother asking the right questions when TWC first proposed metered billing that enabled steep discounts for low-volume users.

Instead, you just encouraged the mob to revolt without looking at the detail, and the plan was squelched.

We've seen the same case with wireless data. The carriers offer up smaller bites at MUCH LOWER PRICES, and the data-hog contingent screams, as if they represent the masses, without examining the statistical data that shows the vast majority of users benefit from the new rate structure.
34764170 (banned)
join:2007-09-06
Etobicoke, ON

34764170 (banned)

Member

Re: Asking the right questions?

said by elray:

This blog didn't bother asking the right questions when TWC first proposed metered billing that enabled steep discounts for low-volume users.

When are you going to finally figure out that the ISPs will never lower anyones bill even if they're users that do not do much of anything on the net?
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Re: Asking the right questions?

said by 34764170:

said by elray:

This blog didn't bother asking the right questions when TWC first proposed metered billing that enabled steep discounts for low-volume users.

When are you going to finally figure out that the ISPs will never lower anyones bill even if they're users that do not do much of anything on the net?

TWC's offering was $15/month.
Dampier
Phillip M Dampier
join:2003-03-23
Rochester, NY

Dampier

Member

Re: Asking the right questions?

said by elray:

said by 34764170:

said by elray:

This blog didn't bother asking the right questions when TWC first proposed metered billing that enabled steep discounts for low-volume users.

When are you going to finally figure out that the ISPs will never lower anyones bill even if they're users that do not do much of anything on the net?

TWC's offering was $15/month.

What TWC was eventually proposing at that rate was not broadband, offering just 1GB of usage at 768/128kbps for $15 a month with a $2/GB overlimit fee. Modem rental, where applicable, not included. You had to have at least a basic cable package to qualify to sign up.

Nobody cared then and almost nobody cares now about their Internet Essentials trial in Texas, where TWC reps there tell me there is underwhelming interest in the package, which caps usage at 5GB in return for a piddly $5 discount.

Of course, if we believed them for a minute about leaving the unlimited plans intact at current pricing, nobody would mind if they want to sell these el-cheapo packages, but just as we've seen with wireless (and through the admissions of executives), they want to gradually stick everyone with this unjustified ripoff pricing.
sandman_1
join:2011-04-23
11111

sandman_1 to elray

Member

to elray
said by elray:

This blog didn't bother asking the right questions when TWC first proposed metered billing that enabled steep discounts for low-volume users.

"Steep" discounts? What they had something better than $30/month for unlimited? I mean that is what you can get with their current promo's in my area, Internet starting at $30/month. Back when they were doing their experiment, what it was something like 5GB for $35/month. Yep that is some "steep" discount there.

And your "much lower prices" for wireless carriers is just a ridiculous statement. They all went from unlimited to 2GB at the same price. Also I guess you haven't been paying attention to the new Verizon pricing which prices 1GB/$50!! Yea those are some lower prices there.

Dude get off the industries balls for a change and think for yourself. Your backside will thank you.
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Re: Asking the right questions?

said by sandman_1:

"Steep" discounts? What they had something better than $30/month for unlimited? I mean that is what you can get with their current promo's in my area, Internet starting at $30/month. Back when they were doing their experiment, what it was something like 5GB for $35/month. Yep that is some "steep" discount there.

And your "much lower prices" for wireless carriers is just a ridiculous statement. They all went from unlimited to 2GB at the same price. Also I guess you haven't been paying attention to the new Verizon pricing which prices 1GB/$50!! Yea those are some lower prices there.

Dude get off the industries balls for a change and think for yourself. Your backside will thank you.

The vast majority of subscribers weren't/aren't using "unlimited", they use less than 2GB. Thus, for them, the new plans represent a substantial discount.
sandman_1
join:2011-04-23
11111

sandman_1

Member

Re: Asking the right questions?

Sorry I just don't see any evidence to support your, most people use 2GB before the caps started (wife uses 2GB easy with her iPhone and I wouldn't call her a "power user" either. Also where are these substantial discounts that you speak of? Like Phil Dampier pointed out, the cheap $15/month plan required basic cable which at least adds another $15/month. Add in the rent on the box and everything and it doesn't start looking like it is a "substantial discount" compared to standalone Internet service.

itdoesntmatr
@myvzw.com

itdoesntmatr to elray

Anon

to elray
doesn't matter if the vast majority weren't/aren't using unlimited, the fact is especially with wireless providers, they took a service and put a limit on what you can use charging the same price as unlimited, and if you go over you get steep "penalties" for using to much. Those pricing models don't make sense either, AT&T for example, 2GB for 30 dollars a month, 10 dollars for each additionally used GB. With that price model your getting charged 15 dollars a GB for the first 2GB's and then a five dollar discount when you use more then they think you should. Hello that's not a discount at all. The worst part about the caps, at least 70% of the internet/ data using population don't understand what it cost a provider to supply bandwidth. It in no way cost any provider 10-15 dollars a GB to provide that bandwidth. I'm sure it cost less the 10% of this. Say it cost 1 dollar to provide a GB to a subscriber, that means at 10 dollars a GB the provider is making 90% profit, name me other industry that is making that kind of profit? Big oil isn't even making 90% profit, yes they are making a ton but not that.

Bill Neilson
Premium Member
join:2009-07-08
Alexandria, VA

Bill Neilson to elray

Premium Member

to elray
said by elray:

said by sandman_1:

"Steep" discounts? What they had something better than $30/month for unlimited? I mean that is what you can get with their current promo's in my area, Internet starting at $30/month. Back when they were doing their experiment, what it was something like 5GB for $35/month. Yep that is some "steep" discount there.

And your "much lower prices" for wireless carriers is just a ridiculous statement. They all went from unlimited to 2GB at the same price. Also I guess you haven't been paying attention to the new Verizon pricing which prices 1GB/$50!! Yea those are some lower prices there.

Dude get off the industries balls for a change and think for yourself. Your backside will thank you.

The vast majority of subscribers weren't/aren't using "unlimited", they use less than 2GB. Thus, for them, the new plans represent a substantial discount.

And represent little reason for them to ever use their phone anymore even with MORE apps and vidoes, etc....coming out

Oh joy for them!
Chubbysumo
join:2009-12-01
Duluth, MN
Ubee E31U2V1
(Software) pfSense
Netgear WNR3500L

1 recommendation

Chubbysumo to elray

Member

to elray
said by elray:

This blog didn't bother asking the right questions when TWC first proposed metered billing that enabled steep discounts for low-volume users.

Sorry, but if you didnt pay attention, what TWC wanted was a flat rate model with overages per GB over a certain amount. Sure, some bills would have stayed the same but many would have gone up because of their extremely low proposed cap on the lower and higher tiers. If they want to use true usage based billing, let them be regulated like a power company or a water company.

Bill Neilson
Premium Member
join:2009-07-08
Alexandria, VA

Bill Neilson to elray

Premium Member

to elray
said by elray:

and the data-hog contingent screams

Who is a data-hog? Specifically...please explain.
nasadude
join:2001-10-05
Rockville, MD

nasadude

Member

Re: Asking the right questions?

said by Bill Neilson:

Who is a data-hog? Specifically...please explain.

a data hog is whoever the ISPs say is a data hog; there is no objective criteria
sandman_1
join:2011-04-23
11111

sandman_1

Member

Re: Asking the right questions?

...or someone who actually uses their connection.
34764170 (banned)
join:2007-09-06
Etobicoke, ON

34764170 (banned)

Member

Re: Asking the right questions?

said by sandman_1:

...or someone who actually uses their connection.

You're supposed to fork over money and not actually do anything with your connection.
elefante72
join:2010-12-03
East Amherst, NY

elefante72

Member

Fundamental Lack of Understanding

The whole cap and meter thing is a fictional creation of the pipe providers because neither of these drives them economically (cost) is any meaningful way.

To start:

Verizon 15/5, 50/25. It uses the same pipe, equipment, etc. So the cost is the same for the PIPE, except they already charge you $20 more for the "faster speed" which in reality is a throttle.

Now they can talk about congestion, but I haven't seen congestion on my FIOS or TWC in 8 years, so that is made up. IF there is in fact congestion, throttling automatically kicks in for fair use in the speed tier allocated.

Cost: Ok, so the 15/5, 50/25 costs Verizon the same which is $10, the rest is profit. They talk about infrastructure, well Time Warner actually spent less in the last 3 years than the previous three and this was in the middle of Docsis 3 upgrade. Then we get to transit costs (the bit costs), which have been going down dramatically.

So say Comcast 250GB cap 3 years ago, a 750-1TB cap TODAY would cost them the same transit cost. It costs LESS not MORE.

Speed tiers: They are there to already charge the customer for imputed usage (assume a faster tier the user will use more which they know is not true, BTW in MOST cases). However say $40 more in revenue between tiers is juicy because it may only cost them $1 to provide in actuality. Like I said infrastructure cost is the same. Now the newer FIOS tiers may require new equipment, but WTF they charge for it big time and make that money back bigtime.

Network response time (i.e. ping): There is some vast lack of knowledge on this subject. If I had a dollar for everytime some gamer said they had to upgrade to a "faster" tier because of a lower response time, I would be rich. Since it is the SAME infrastructure, same response time. We are not talking about huge packets here filling up the pipe, this is strictly a congestion and mesh issue. The pipe providers don't discourage this type of thinking.

Verizon: Verizon more than every is raising rates on FIOS. They have 15/5, then the next option is 50/25 which is a huge difference. Verizon KNOWs that for cloud applications the 15/5 won't cut it in the future (upgrade). This is a big issue for the cablecos coming up.

HOWEVER, the latest VMware View works PERFECTLY when I am remote to my View server in and environment where I was getting no more than 600Kbps, which guess what a 15/5 would have been MORE than enough.

Video: If they cap, then there is no need for higher "speed" tiers because the #1 by far reason that one would hit a cap is for OTT video. If they do like in Canada they give the lower tiers crappy caps, they "force" you to upgrade tiers to get a reasonable cap, which of course still isn't reasonable. My inlaws get 60GB on Bell which I blow through in a few days.

So there you have it, Internet.

Costs keep going down, except my Internet bill from Verizon just went up $20. Welcome to monopoly pricing.
Skippy25
join:2000-09-13
Hazelwood, MO

Skippy25

Member

Re: Fundamental Lack of Understanding

I hope you do realize your response time comment is completely false as a faster connection does absolutely equal a faster response time. The underlying infrastructure is the same, but the last mile speed of packets being sent and received is not. How do you think you go from 1Mbps to 100Mbps to begin with?

SHoTTa35
@optonline.net

SHoTTa35

Anon

Re: Fundamental Lack of Understanding

said by Skippy25:

I hope you do realize your response time comment is completely false as a faster connection does absolutely equal a faster response time. The underlying infrastructure is the same, but the last mile speed of packets being sent and received is not. How do you think you go from 1Mbps to 100Mbps to begin with?

WTF are you smoking? The only time your connection being faster would help ping was if the 15Mbps line was already saturated with 15Mbps of data and pings get delayed because there isn't enough bandwidth. If you were pushing 15Mbps of data on a 100Mbps line then obviously you have more bandwidth to use so your other data packets wont have to be queued up which is what introduces latency. That and retransmits because the first packet got lost or whatever because of the bandwidth starvation.
elefante72
join:2010-12-03
East Amherst, NY

elefante72 to Skippy25

Member

to Skippy25
Hence my comment if I had a dollar....

Mannus
Premium Member
join:2005-10-25
Fort Wayne, IN

Mannus

Premium Member

I guess I'm a hog...

I take full advantage of my always on 15/5(more like ~25/25) connection I pay Frontier 41.00 per month.
Wilsdom
join:2009-08-06

Wilsdom

Member

Re: I guess I'm a hog...

700GB/6000GB is hardly excessive. Anything below 50% seems like pretty reasonable usage--certainly no cap should be allowed to be set below 33%.
xsquid40
join:2010-03-18
Staunton, IL

xsquid40

Member

Re: I guess I'm a hog...

33% of what?

SHoTTa35
@optonline.net

SHoTTa35 to Mannus

Anon

to Mannus
Eehh... kinda but not really . You've only done 3TB in like 3 months. I guess according to comcast then yes but IMO that's not that bad. Then again i have a 50/8 connection and I've done at most 600-800GB but never 1TB!!
34764170 (banned)
join:2007-09-06
Etobicoke, ON

34764170 (banned)

Member

Re: I guess I'm a hog...

said by SHoTTa35 :

Eehh... kinda but not really . You've only done 3TB in like 3 months. I guess according to comcast then yes but IMO that's not that bad. Then again i have a 50/8 connection and I've done at most 600-800GB but never 1TB!!

You bloody data hogs!!! Stop depriving everyone else of those bits from the Intertubes!! The Intertubes are running out!!
sandman_1
join:2011-04-23
11111

sandman_1

Member

Re: I guess I'm a hog...

It is a series of tubes that get clogged and need drain-o.

Mannus
Premium Member
join:2005-10-25
Fort Wayne, IN

Mannus to SHoTTa35

Premium Member

to SHoTTa35
I uploaded a lot of evil in May!
34764170 (banned)
join:2007-09-06
Etobicoke, ON

34764170 (banned)

Member

Re: I guess I'm a hog...

said by Mannus:

I uploaded a lot of evil in May!

At least from that perspective you're giving bits back to everyone. Since we are running out as we keep being told.

XANAVirus
Premium Member
join:2012-03-03
Lavalette, WV

XANAVirus to Mannus

Premium Member

to Mannus
What software is that?

Can I get that, it looks interesting.
I'd love to be able to measure my usage on my Windows computers!
Rekrul
join:2007-04-21
Milford, CT

Rekrul

Member

Re: I guess I'm a hog...

said by XANAVirus:

What software is that?

Can I get that, it looks interesting.
I'd love to be able to measure my usage on my Windows computers!

It's called NetMeter and you can get it here;

»www.metal-machine.de/rea ··· ;dl=cat1

Note that some people are having problems under Vista and Win7 with the normal version. If you have one of those OS's, either download the version by "oopepe" (no installer), or download the normal version, install it, then download oopepe's version and copy the EXE file over the one that was installed. He made a change to make it work better with Vista/W7.

Once installed, right-click the system tray icon and select Totals to get the screens shown.

Also, a little trick I learned; If you ever want to erase some of the totals, export the information, edit it in any text editor and then import it back in. Handy for those times when your system date gets messed up and you suddenly have a line for 2018 in the totals.

YukonHawk
join:2001-01-07
Patterson, NY

YukonHawk

Member

Excellent breakdown Karl!!

Way to go Karl. Great detail!

anon111
@rr.com

anon111

Anon

Technology keeps on moving

Eventually, Google or somebody else is going to roll out Gigabit broadband and make this issue irrelevant.