Until we change our system or how money is donated to our politicians campaign re-election committees nothing will change. Many if not most politicians act like the good loyal employees they are of the communications industry. With all this money given to them they are on the payroll of these large companies. Because of this we will be stuck with slower and high priced internet access.

I’m not optimistic things will change anytime soon. Just look at how the large insurance companies are giving huge sums of money to congressmen right now. Has anyone noticed how the health-care bills in congress are stalled with many congressmen coming out in support of private insurance companies. In most cases even against the wishes of their own party. Now how does that happen (sarcasm)? Just follow the money trail.

The government has an accepted role in the economy in all kinds of ways such as providing a framework for company law and a court system for resolving disputes (though that’s been undermined in recent years at the behest of companies to make things much more burdensome for the consumer). What the government has turned its back on is the anti-trust movement which was pushed by that good old Marxist Teddy Roosevelt in response to the abuses of the robber barons. It’s time to bring it back, no ifs ands or buts. And where that doesn’t provide genuine competition in the broadband marketplace, then by all means governments should enter the market as a service provider. The legislators are supposed to work for us, not corporations.

As far as internet price wars go, you’re right that there tend not to be any except in markets where a muni utility has laid fiber, and either they or other providers (Wilson/Lafayette for case #1, UTOPIA for case #2) have offeredd service over it that can’t easily be colluded with by the MSOs/ILECs. In Canada the same thing is happening, but with the much-feared competitor being a privately held, single-network fiber operator. Heck, even TekSavvy is having a hard time of it, and they’re only selling vanilla DSL!

On the LD analogy, I guess you’re right there, since the calling party/carrier pays the termination fees to the co-op or equivalent. Of course, with cellular plans (voice and messaging) people get charged twice in the US, but on the other hand I don’t want to pay 15 cents per minute long distance to call a cell phone, common with “calling party pays” systems elsewhere. Especially now that I can get an unlimited Verizon-based phone for $40 per month through page Plus Cellular.

Speaking of cell phones and price wars, there is some light/hope in that market. An operator based out of San Antonio, Pocket Communications, has competed prices down in their service areas (San Antonio, Laredo, McAllen, Corpus Christi) to the point that their direct competitor, CricKet, has prices $5-$20 lower (for more features) in the south Texas area than Pocket does. CricKet has EvDO here, but Pocket’s network coverage is superior. Guess where people (300,000 of them to be exact) are going?

Here you can a $25 cellular plan that covers local, long distance, caller ID, text messaging and picture messaging. Of course, you’ll probably want to pay for the $37.50 plan, which includes every feature you could possibly want, plus web browsing added on, but $25 is about what you’d pay for unlimited-local-and-long-disance VoIP, let alone landline or cellular service. Whereas in many areas there’s an internet market failure, this is a cellular market success.

Can’t wait until Pocket rolls out 3G/4G on their network. I’ll bet an uncapped mobile broadband card will be priced around $35 per month just to “give the big boys hell 24/7″ (that used to be their motto).

As for capped service vs. non-capped, unfortunately around here everything except Millenicom-powered Sprint $70-a-month EvDO and low-coverage 1.5/512 DSL would have a cap if TWC decided to cap their residential connections. At least for now. Up in Colorado though, if Comcast’s 250GB soft cap was really putting a cramp on my style, I could switch to Qwest DSL. My problem there is I’m cutting my upload speed by two-third (by over 90% while PowerBoost is on) and my download speed by about half, when the “85% rule” is accounted for :/

Grande is one of a handful of competing overbuilders, and proves my point about Wall Street’s intense dislike of them. Grande had to sell itself to a bigger partner because it simply could not get sufficient financing to build out its system. Investors feared head-to-head competition could lead to a price war, beneficial for consumers, but not at all good news for their short term revenue expectations. That’s one of the problems with the all-free-market solution some would have you believe is the only answer to this problem. When dealing with established competitors in a marketplace defined by those investors as “stable,” rocking the boat with an upstart is not the golden opportunity so many free marketeers suggest. It’s a threat, and the established players will fight tooth and nail to keep the competition out, the Wall Street media will whine about the impact on revenue for everyone, and investors will be hard to find.

An example of what happens to an upstart competitor can be found in Vancouver, where Shaw leveraged their high pricing in most service areas to sustain pricing targeting their Novus competition at what most believe is “below cost” predatory pricing. Their intent isn’t really to compete at those prices — it’s to devalue Novus to make their business unsustainable. In many cases, hobbled competitors usually get purchased by the established player at a fraction of their original worth.

What kept TWC from going forward with their experiment wasn’t Grande, or AT&T (the phone company — the traditional “other” competitor for most Americans). Grande’s footprint was not that large. It actually was a combination of consumer outrage and the attention it drew from New York legislators, culminating in Rep. Eric Massa and Senator Chuck Schumer forcing TWC to pull back because of the political damage it was causing them.

In short, government oversight and the threat of the scrutiny that oversight brings (and potential regulation) was the safety valve that at least temporarily shelved the Internet Overcharging.

I agree with you that in many cases, consumers will choose an uncapped, slower alternative provider over a faster capped one. That would be true for me, personally, although I’d be stuck with Frontier’s 3.1Mbps DSL service, which is the best they could do for me in a suburb less than 1/2 mile from the Rochester city line.

Call termination fees have been part of the historic business model of the telephone industry. They vary from several cents in very rural areas, where the costs of doing business are routinely higher (and divided between fewer customers) to a tiny percentage of that in urban areas.

What you are writing about doesn’t actually challenge my original analogy, since the costs of long distance service for the vast majority of providers does not vary based on where your interstate long distance call ends up. They recognize that even though the costs to deliver calls to rural Iowa can be much higher, there is only a tiny percentage of customers placing those calls, versus folks calling San Francisco, or other more populated places. All of these costs are accounted for when setting a uniform long distance rate (which the majority of companies do), which the caller pays.

You hear about this issue only when an enterprising individual seeks to exploit the call termination fee system, such as what happened when a whole bunch of “free international call” services sprung up a few years ago. By calling a number, often in rural Iowa, you had a “dial tone” to place calls internationally, just for the price of that call to Iowa. Since many customers have flat rate long distance for their home or mobile phone service, it cost them nothing to use the system. The service used cheap VOIP connections to connect the calls.

The rural phone company charged the phone companies delivering the calls to rural Iowa the prevailing call termination fee, which was a financial boon to them, and they split the proceeds with the people running the “free calling” service.

The phone companies stuck with the call termination fees howled, and the crackdown against this loophole ensued.

What I wrote about was something beyond the call termination fee argument. Let me explain in terms of a long distance call, then explain how this translates to Internet service.

I actually have flat rate long distance service here, but let’s assume I didn’t and my calling plan charged me seven cents per minute for long distance calls to San Francisco. Under the current system, most of that seven cents will end up in the pocket of my long distance carrier, which in this case happens to be my local phone company, Frontier. But Frontier has to share a penny or two per minute with AT&T California, which I believe is the local company there.

Frontier gets paid and AT&T California gets paid. But now, AT&T California wants to get paid twice, by also charging my aunt seven cents a minute to receive my call. So the effective cost just shot up for the exact same call, despite AT&T already enjoying revenue for handling the call in the first place.

Now let’s take this to the Internet. Stop the Cap! already pays for bandwidth. I pay for a hosting company to make room on their servers for this web site. As part of my monthly fee, I get an allowance of traffic, which is used anytime I or anyone else accesses this website. My ISP, Time Warner Cable, also gets $50 a month from me to connect to the Internet and to support their costs of connecting Rochester to the Internet as a whole, first locally, then at their regional center in Syracuse. But I also am paying, as part of my monthly fee, their costs to plug Syracuse into the global Internet. Time Warner Cable does it on a massive scale, grouping customers from all over and buying access at the considerably discounted “group rate” (for lack of a better term).

So I pay for monthly hosting and traffic fees for this website, and I pay my ISP not only to access the site, but also handle the costs of delivering that traffic to me, the end customer.

But under the “you can’t use my pipes for free” analogy proposed by AT&T, I should pay a third time — this time to AT&T and any other provider, be it Time Warner, Grande, AT&T, Verizon, et al., an additional monthly fee to get them to agree to handle my website traffic at the same speed and service quality it’s handled today. If I don’t, my traffic gets potentially throttled or sent to the back of the line, leading to slow page loads, potential outages, or other issues that would have been handled lickety quick if it happened to CNN, but is just not that important to rush on for a “freeloader” like Stop the Cap! that refuses to pay extra insurance that guarantees that won’t happen.

Now providers will swear that won’t happen to me, but if that was the case, there would be no reason, much less a market, to offer (much less purchase) this “added insurance.” I think smart consumers can see where this will go. Providers don’t pay millions of dollars in lobbying fees and astroturfing efforts for something that “won’t happen.”

I have to zip to the dentist now, but I’ll be back shortly and address your other points.

I consider myself one of the lucky ones. My options are FTTH U-Verse, TWC, and DSL (The footprint in the Austin area with all those choices available is very small, so there’s really no competition for speed or price….yet), but I have lived in parts of the city where TWC is the only option.

However as a caller (or a receiver) you do not get charged once for the service and a second time for the level of call quality. What AT&T and others proposed is that content providers would not only pay for their access, but also pay for a level of delivery service across all networks traveled separately from their access.

Put another way, if I ran a content-heavy website I’d theoretically pay my local ISP for high-speed upstream access. Then I’d pay AT&T a premium to make sure my content is delivered swiftly across their networks. Then I’d pay Sprint a premium to make sure my content is delivered swiftly across their networks. Then I’d pay Virgin a premium to ensure my British users can get at my content with ease. You see where this is going, don’t you?

No one’s opposed to anyone getting paid for their effort. We’re opposed to extortion and money-making schemes at the cost of freedom (by effectively taking something accessible to everyone and making accessible only to the affluent).

Want proof? Check out this direct-dial long distance provider:

http://www.pioneertelephone.net/index.asp?xid=PTGOOG&gclid=CM7ovNa5nZwCFSnKsgod3wPcTQ

Check your local phone number. Now check 830-324-6xxxx. That’s a local cooperative number, where rates are significantly higher on long distance due to origination fees from the telephone company. Who, incidentally, sells its own (7¢ per minute, no unlimited plans) long distance package.

So “billing on both ends” has a definite precedent, though billing for quality-of-service on an all-else-equal connection doesn’t.

As for service choice, I live in an area that currently isn’t competitive. Cable (TWC, Austin area) in town, very little/slow/expensive DSL (WIndstream) in town, slow/capped wireless provider if you can get line-of-sight to a tower, slow/capped satellite or capped mobile broadband if you can’t.

A few dozen miles away though the local telco (a cooperative, not the one I just mentioned) has 20 Mbps, uncapped fiber-to-the-home, albeit at rates higher than the equivalent FiOS tiers due to rather lackluster cable competition (TWC, same tiers as are available in my town).

Go a few miles further into San Antonio and you get another cable company (Grande Communications), who I think was partially responsible for TWC’s deciding not to cap this region. When Time Warner proposed the caps, Grande used the opportunity to point out that they weren’t even thinking about doing any such thing. Grande’s service is a bit slower for the price versus Time Warner’s, but when you put things in light of caps vs. no caps, guess who wins? In San Antonio, AT&T also has their U-Verse product, with speeds up to 18 Mbps down and 1.5 Mbs up. No caps yet, though they were also thinking about it.

About Clear WiMAX, Clearwire’s old system (pre-WiMAX) was heavily throttled. Their new system isn’t. No caps either. Their speeds aren’t competitive with DOCSIS 3.0 cable from Comcast, but their pricing fills the void below cable internet for those who would otherwise choose DSL. Pretty brilliant, actually. Also, remember that the cable companies combined don’t have a controlling interest in Clear. Sprint does, with a 51% stake. Guess who’s the most progressive wireless carrier when it comes to mobile data? Sprint. Personally, I think that Clear is in as good hands as it can be.

Don’t get me wrong, I neither like caps nor am paid by those who do. However this post needs a good dose of Devil’s Advocate.

And yes, it’s funny how the socialism line has become the default response to any argument in the interest of network neutrality, as if socialism is somehow inherently evil. Or even relevant.

That’s if your lucky. Realistically, most Americans have a choice between Cable or Dial-Up. I happen to fall into that category, unfortunately.