Study: Limited Competition Results in Caps, Overages
Just Another Price Hike in Sheep's Clothing
A new study by the Open Technology Institute (OTI)
will surprise none of our regular readers, OTI finding that limited competition can be thanked for the rise in low caps and high overages on fixed line broadband networks.
Carriers have argued (lied, frankly) that such penalties are necessary due to network congestion or financial well being, despite the fact that flat-rate pricing has been perfectly profitable, the costs of delivering broadband continue to plummet, and most well-run fixed-line networks experience limited to no substantive congestion.
According to the OTI, caps and overages on fixed line networks simply act to raise the already high profit margins of broadband providers, while jacking up prices that are already high due to the limited competition that makes caps possible in the first place. As we've noted, most caps have been implemented to protect TV revenues from Internet video. Carriers can't honestly state this is just a cash grab, so they enjoy insulting consumer intelligence by insisting that more restrictions and higher rates are acts of altruism.
"Data caps may be good for the short-term profits of broadband providers and please investors, but they are not benefiting innovation or access to the Internet," said OTI Policy Director Benjamin Lennett. "Costs for providing broadband connectivity are continuing to decline, yet Americans continue to face higher prices for a service that is no longer a luxury."
Carriers of course pay well-heeled academics to argue otherwise. In fact an NCTA cable trade show last week featured several speakers paid to insist that caps and overages are a healthy result of the "vibrant competition in the marketplace." The millions of customers stuck on capped AT&T DSL because they have no other options would likely have something to say about that.
Re: Stuck on capped DSL!?
said by rradina:While it's only 50 MHz, there are exclusion zones, and mostly WiMAX is used, isn't that basically the idea behind the lightly licensed 3.65 GHz band?
I think we should figure out a way to allocate 100mhz for fixed-LTE startups.
Re: Stuck on capped DSL!? That frequency is pretty high and would not penetrate well -- or are you thinking point-to-point, roof-mounted directional antennas? I guess that's possible since it's fixed but I was thinking more along the lines of Clear's 2.5Ghz frequency where a few more towers are needed but not so many that it's too cost prohibitive. I know there are frequency sweet spots but surely the government could move something it does somewhere else and let that be used for competitive last-mile providers.
If you are served by Clear, it doesn't require an outdoor antenna. The indoor modem doesn't look any different than a typical cable modem. I think that's the kind of consumer-friendly competition our current monopoly/oligopoly needs.
It should be this simple:
1) Go to Wal-Mart, Best Buy, Target, pick up a $99 standards-based wireless modem.
2) When you plug it into your WiFi router or directly into your computer and browse to any site, it interrupts your browsing session while it searches for available providers in your area.
3) Hopefully it comes back with an "App Store" of several choices. As you select each choice, that provider returns their packages and pricing.
4) Choose the provider/plan best for you, enter a credit card, checking account number, paypal or whatever and the service starts.
5) If the service stinks (either because poorly managed, oversold or that provider's signal is fringe for your location), by law all plans can be cancelled without penalty regardless of "contract" duration within 90 days.
For support purposes, the standards based modems keep extensive logs of signal strength, latency, congestion, link speed and whatever else might help and this data is instantly available to the provider. The modem also obeys a standard management interface that allows the ISP to manipulate its configuration as needed.
Now that we have the last-mile connection, on the store shelf right next to the modem is a standards-based streaming video device. Buy it for $99, plug it in and an App Store of service providers and packages appear. Buy the content you want, ignore the content you don't want. Buy as many $99 devices for as many TVs as you want. Eventually, these devices are just built into the TVs themselves. There's also a software version for desktops, laptops, tablets, phones, etc.
Why can't we do something like this?
| |antdudeA Matrix AntPremium,VIPReviews:
·Time Warner Cable
said by baineschile:I am just a consumer. I can't even build my own computer. :P
So start a wireless data company. There is obviously a large niche out there.
People are quick to compain, but rare to act.
Santa Monica, CA
·Time Warner Cable
"Study" ? This "report" is void of fact. There is not one instance, in which they can cite a single carrier implicating caps as a means to enhance revenues.
An admission that caps work over the entirety of the billing period, versus peak hours, does not disqualify their utility in curbing abuse and shaping consumption.
Flat rate billing models are indeed, profitable, so long as they are not abused. Torrents and those who would intentionally max out their pipe, for no other reason than to max out their pipe, have ruined the "unlimited" potential for everyone, so some form of limits are required. Caps are just one.
Sonic doesn't sell its FTTH to businesses, Google doesn't permit servers on theirs.