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Broadband Usage Caps: “Just Switch Providers” — George “Out of Touch With Reality” Ou Misinforms (Again)

Astroturfers like Scott Cleland got all excited yesterday about another misinformed piece about broadband usage caps from George Ou, a technology blogger who previously gained infamy from his strident opposition to Net Neutrality and his ridicule of the “scare-mongers” who predicted throttled speeds, multi-tiered broadband service, penalties and blocks for using Voice Over IP services, and providers trying to control what you see on the net.

George Ou

George Ou

Back in 2006, he wrote a three-pager on ZDNet lambasting Save The Internet, MoveOn, and other Net Neutrality proponents who didn’t agree with Ou’s position that this was simply a technology issue.  He accused the groups of hysteria at a fever pitch over their concerns Net Neutrality opposition was much more about politics, profit, and protection of the providers’ business models.

With positions like that, Ou need not ever worry about job security because his rhetorical stars are in perfect alignment with big telecommunications companies.  I’m sure as long as he joins the broadband tug of war on the side of AT&T and other big providers, some policy institute, astroturf group, or other industry-friendly job would always be there for him to take.

Oh wait.  He has.  But more on that later.

These days, Ou has been pondering broadband usage caps, our bread and butter issue on Stop the Cap!

You do not get a cookie if you guessed he’s all for them, because that would be too easy.

Ou decided that the recent comparison between broadband usage caps in Japan and the United States by Chiehyu Li and James Losey of the New America Foundation, was… problematic.  That usually means we are about to get a technological-jargon-cannon barrage in an effort to suggest those folks at the New America Foundation ‘just don’t understand how the Internet works.’

You decide:

Li and Losey point out that while Japanese ISPs caps the upstream; they are generous with unlimited downstream while American ISPs are beginning to cap both the upstream and downstream.  But this is a flawed analysis because capping the upstream effectively cuts to total downstream peer-to-peer (P2P) traffic to the same levels.  And because P2P is one of the most heavily used application on the Internet accounting for the vast majority of Japanese Internet traffic, cutting upstream usage greatly reduce all P2P traffic and all Internet usage which was necessary because their Internet backbones were severely congested.  I’ve argued that it is far more efficient to manage the network but until then the caps are needed.

Another problem with Li and Losey’s analysis is that it only looks at the usage cap without an analysis of the duty cycle and its ramifications.  When we compare the usable duty cycle between ISPs in Japan compared to ISPs in the U.S. derived from Li and Losey’s data, we see a completely different picture.  By splitting the U.S. ISP usage caps (some of these caps are only in proposal phase) into an upstream and downstream cap proportional to the upstream/downstream connection speeds, I was able to generate Figure 1 below.  What it actually shows is that U.S. broadband providers have usage caps that allow users to use their Internet connection far more frequently than users in Japan.  So while a user in Japan is capped to 40 minutes a day of upstream Internet usage, which indirectly caps download speed because it severely trims the number and generosity of P2P seeders.  AT&T’s proposed DSL usage caps (similar to other DSL providers) allow for 1111 minutes of usage per day on the upstream and 97 minutes on the downstream per day.  So broadband consumers who are dissatisfied with their tiny Time Warner usage caps can simply switch to their DSL provider.

I guess that wraps that up.  Or not.

Ou wants us to assume quite a bit in his own analysis.  His contention that the “vast majority” of Japanese Internet traffic is peer-to-peer is “proven” by linking to an earlier article… written by him… saying just that.  But let’s grant Ou the premise that peer-to-peer is at the epicenter of bandwidth congestion in Japan.  Ou defends Japanese providers for specifically targeting the upstream traffic, pointing out stingy torrent users that don’t give as much as they get will automatically be speed limited during downloads (Bit Torrent’s way of equal sharing).  But he never extends the upstream cap argument to the United States, where he implies a similar traffic overload is occurring.  Instead, he merely acknowledges that domestic providers are experimenting with caps that limit both uploading and downloading, impacting every broadband user, not just those “problem” peer to peer users.

Caps.  The necessary evil?

Ou is okay with the equivalent of dealing with a pesky fly in the kitchen by setting the house on fire.  Doing that might solve the fly problem, but makes living there unpleasant at best in the future.

In fact, the impetus for dealing with the peer to peer “problem” in Japan turns out to be as much about copyright politics as bandwidth management.¹

I also have no idea why Ou would spend time developing a “duty cycle” formula in an effort to try and convince Americans that those generous looking caps in Japan are actually worse for you than the paltry ones tested in the United States.  His formula is dependent on the speed levels offered by Japanese vs. American providers to work.  But then Ou tries to debunk the speeds on offer in Japan as more fiction than reality, and throws his own “duty cycle” formula under the bus as a result:

Li and Losey also paint a dire picture that Japan has 10 or more times the connectivity speed as the US, but the most accurate real-world measurement of Internet throughput in Japan according to the Q1-2009 results from Akamai’s State of the Internet report indicates that Japanese broadband customers only average about 8 Mbps.

Ou then exposes he is completely clueless about the state of broadband in some of the communities that actually cope with usage caps, or were threatened with them.  Ou’s suggestion that unhappy Time Warner Cable customers could simply leave a capped Road Runner for DSL service from the phone company leaves residents in Rochester, New York cold.  For them, that means coping with an Acceptable Use Policy from Frontier that defines 5GB per month as appropriate for their DSL customers.  In Beaumont, Texas, the limbo dance of caps last left residents picking between a cap as low as 20GB with AT&T or a 40GB “standard plan” from Time Warner Cable, before Time Warner dropped the “experiment” for now.

Ou should have just suggested customers in western New York and the Golden Triangle just pick up and move to another city.  It would have been more realistic than his “if you don’t like them, switch” solution.  It also presumes there is a viable DSL service to switch to, as well as whether or not the service can provide a sufficiently speedy connection to take advantage of today’s broadband applications.

And here is where you can draw lines between the special interests, astroturfers, industry-connected folks and actual real, live, consumers.

Ou brings out the shiny keys, waving them in consumers’ faces telling them to look somewhere else for answers:

So the reality is that usage caps isn’t what Americans should be focusing on and the priority should be to encourage more next generation broadband deployment.

Internet Overcharging schemes that charge consumers up to 300% more for their broadband service, with no corresponding improvement in service, is not the problem for Ou, but it certainly was for Time Warner Cable customers in several cities chosen for their Overcharging experiment.  The need to encourage more broadband deployment is fine, but American broadband customers will be broke long before that ever happens without some other pro-consumer solutions.

Ou has a problem though.  He has a new employer.

A corporate restructuring at ZDNet in the spring of 2008 meant Ou was free to pursue other professional interests, and wouldn’t you know, he turned up as Policy Director of “pro-commerce” Digital Society.  That’s a “free market think tank” website whose domain name is administered by one Jon Henke in… you guessed it, suburban Washington, DC (Arlington, Virginia to be exact).

The sharks are in the water.

Jon Henke

Jon Henke

Henke, Executive Director of Digital Society, and presumably Ou’s boss, has quite the agenda of his own, and it’s not consumer driven.  He has a long history of involvement in conservative politics, which brings new questions about how Henke would approach “encouraging next generation broadband deployment.”  Does he favor broadband stimulus money?  How about municipal broadband competition?

In addition to his work with Digital Society, Henke also runs something called the DC Signal Team.  What’s that?  Let’s see:

DC Signal is a strategic intelligence and communications firm specializing in new media consulting. Based in the Washington, DC area, we work with a range of clients — corporations, trade associations, campaigns, and individuals — to craft and execute an effective online strategy.  We provide timely intelligence and analysis, as well as communications that can reach and resonate with key opinion makers, policy experts, and elected officials.

Our expertise in new media communications sets DC Signal apart, allowing us to filter out the background noise on the Internet to deliver just the most relevant information, make creative, appropriate recommendations based on that information, and target communications directly to the most influential audiences.

I love the smell of plastic grass in the morning.

That’s right, folks.  DC Signal is a classic PR firm that uses targeted communications to reach the most appropriate audience for their campaigns.  Need to reach consumers and sell them on a pro-industry position?  Set up a “grassroots” group to do it.  Need to baffle the media, lawmakers and opinion leaders with industry BS?  Set up “authoritative” websites to deliver carefully filtered “relevant information.”  What better way to do that than with a blog like Digital Society?

But wait, there’s more.

Henke is also working for an innocuously named group called Arts+Labs, which starts its mission statement out innocently enough:

Arts+Labs is a collaboration between technology and creative communities that have embraced today’s rich Internet environment to deliver innovative and creative digital products and services to consumers. From the early development of motion picture technology, voice recordings and radio to today’s 3D computer graphics, streaming digital movies, “on-demand” entertainment,  online games, news and information, innovative technologies and creativity have always gone hand in hand to enrich our understanding and appreciation of arts, entertainment and culture.

Then things become more ominous.

At the same time, Arts+Labs is working to educate consumers about how net pollution – spam, malware, computer viruses and illegal file trafficking – threatens to transform the Internet from an essential catalyst to safely deliver this content to consumers, into a viral distribution mechanism that will choke off the Internet for consumers and future innovators and creators alike.

I can understand the threats from spam, malware, and computer viruses — what groups out there actually advocate for these? — but the “illegal file trafficking” thrown in at the end had me wondering.

I smell industry money, probably from providers who oppose Net Neutrality and want to throttle peer to peer applications, from Hollywood content producers who want to keep their content off The Pirate Bay, the music industry who is always paranoid about piracy, and of course equipment manufacturers who sell the hardware that does the bandwidth management.

So who “partners” with Arts+Labs?

  • Viacom
  • NBC Universal
  • AT&T
  • Broadcast Music, Inc. (BMI)
  • Verizon
  • Microsoft
  • Songwriters Guild of America
  • Cisco
  • American Society of Composers, Authors and Publishers (ASCAP)

There you go.

astroturf1Arts+Labs tries to be clever about its agenda, not so much with strident opposition to Net Neutrality, but instead promoting “consumer interests” by insisting that providers fully disclose the abuse about to be heaped on their customers.  In a press release in June, the group advocated its own national broadband strategy recommendations to the FCC:

A Safe Internet and Smart Management Will Boost Digital Society

It also said that a safe Internet must be a core part of a national broadband strategy and that the failure to protect online data and crack down on net pollution such as malware, spam, phishing and other Internet crime will erode the value of the Internet and discourage broadband adoption.

“To drive adoption and build a successful digital society that reaches every American, all of us must accept responsibility for minimizing online risks, protecting users’ privacy, and ensuring data security against malicious online activity and cybercrime,” A+L said.

It also urged the Commission to embrace “smart management tools and techniques.”

“Used effectively, smart management of our networks will stimulate broadband adoption by expanding the scope of activities available to consumers, by addressing network congestion, and by defending against hacking, phishing, identity theft and other forms of cybercrime,” the filing added.

But it said network operators must not abuse management tools to interfere with competitors or consumers rights and noted:  “In a digital society, network managers owe their customers transparency about their network management practices, including proactive disclosure of new policies or innovations that may affect users’ experiences.”

A+L Urges Collaborative Effort, Says Pragmatism Should Trump Ideology

It also urged the Commission to avoid unnecessary regulatory constraints that would interfere with the ability of content providers, network operators and other Internet-related businesses to experiment with new business models and to offer innovative new services and options to consumers.

Finally, A+L urged every Internet industry and every individual who uses the Internet to work together to achieve the nation’s broadband goals.

“Building an inclusive digital society and achieving our broadband goals will require all of us to think outside of silos, to choose pragmatic and effective policies over ideology, and to drive broadband adoption by encouraging the creation of exciting content, protecting intellectual property, and ensuring that the Internet is a safe place to be.  And, the guiding principle on every issue should be to find the solution that moves broadband forward,” A+L concluded.

Broadband throttles and Internet Overcharging aren’t anti-consumer — they are “new policies or innovations.”  As long as the provider discloses them, all is well.

The ideology reference in the press release is remarkable, considering the people who involve themselves in Arts+Media represent a veritable hackathon of the DC political elite, from Mike McCurry, former Clinton Administration press secretary, Mark McKinnon, who advised President George W. Bush, to the aforementioned Jon Henke, who was hired originally to do “new media” damage control for former Virginia senator George “Macaca” Allen and then went to work for the presidential campaign of Fred Thompson.

As usual, the only people not on Arts+Labs’ People page are actual consumers.

To wrap up this party of special interests, which consumers aren’t invited to, we wind our way back to the home page of Digital Society, which features a familiar roster of recommended blogs and websites to visit.  Among them:

* Arts & Labs blog (Henke works with them)
* Broadband Politics (run by Richard Bennett, who forgot he worked for a K Street Lobbyist, actually on K Street (read the comments at the bottom of the linked article)
* Cisco Policy Blog (also a partner with Arts+Labs, has a direct interest in selling the bandwidth management hardware)
* Verizon Policy Blog (also a partner with Arts+Labs, and an interested provider in this issue)

In the beginning of this piece, I recited some of the “scare mongering” Ou accused groups of engaging in on the Net Neutrality debate back in 1996.  The first major Net Neutrality battle was with Comcast over bandwidth throttles.  The barely-conscious FCC under Kevin Martin spanked Comcast (who sued, of course) and we’ve been in a holding pattern ever since.  But the predictions have become remarkably true north of the American border, where Canada endures all of the things Ou swore up and down in 1996 would never happen.

  • Most major broadband providers in Canada throttle the speeds of peer to peer applications, reducing speeds to a fraction promised in their marketing materials.
  • Most major broadband providers in Canada not only charge customers based on broadband speed, but also by the volume of data consumed, causing spikes in customer bills and a reduction in usage allowances in some cases.  Customers now face overlimit fees and penalties for exceeding the Internet usage ration they are granted each month.
  • In 2006, Shaw Communications in Canada tried sticking a $10 monthly fee on broadband customers wanting to use Voice Over IP telephone service.  Vonage Canada complained loudly at the time.
  • As far as controlling what you see online, that’s already in the cards in the States, if the cable industry has any say in the matter.

With a pliable FCC, what exists in Canada today will exist in the United States tomorrow without Net Neutrality protections enacted into law.

(footnoted material appears below the break)

¹Winny copiers to be cut off from Internet
The Yomiuri Shimbun

The nation’s four Internet provider organizations have agreed to forcibly cut the Internet connection of users found to repeatedly use Winny and other file-sharing programs to illegally copy gaming software and music, it was learned Friday.

The move aims to deal with the rise in illegal copying of music, gaming software and images that has resulted in huge infringements on the rights of copyright holders.

Resorting to cutting off the Internet connection of copyright violators has been considered before but never resorted to over fears the practice might involve violations of privacy rights and the freedom of use of telecommunications.

The Internet provider organizations have, however, judged it possible to disconnect specific users from the Internet or cancel provider contracts with them if they are identified as particularly flagrant transgressors in cooperation with copyright-related organizations, according to sources.

The four organizations include the Telecom Service Association and the Telecommunications Carriers Association. About 1,000 major and smaller domestic providers belong to the four associations, which means the measure would become the first countermeasure against Winny-using rights-violators used by the whole provider industry.

They organizations plan to launch a consultative panel, possibly in April, together with copyright organizations including the Japanese Society for Rights of Authors, Composers and Publishers and the Association of Copyright for Computer Software. They will then begin making guidelines for disconnecting users from the Internet who leak illegally copied material onto the Net.

The number of users of file-sharing software such as Winny in the country is estimated to be about 1.75 million, with most of the files exchanged using the software believed to be illegal copies.

A brief six-hour survey by a copyright organization monitoring the Internet found about 3.55 million examples of illegally copied gaming software, worth about 9.5 billion yen at regular software prices, and 610,000 examples of illegally copied music files, worth 440 million yen, that could be freely downloaded into personal computers using such software, the sources said. In other words, this survey alone, uncovered damages amounting to 10 billion yen.

Two years ago, a major Internet provider tried to introduce a measure to disconnect users from the Internet whenever the company detected the use of Winny or other file-sharing software.

However, the provider abandoned the idea after receiving a warning from the Internal Affairs and Communications Ministry that such an approach was regarded as Internet snooping and might violate the right to privacy in communications.

According to the new agreement, copyright organizations would notify providers of Internet protocol addresses used by those who repeatedly make copies illegally, using special detection software. The providers would then send warning e-mails to the users based on the IP addresses of the computers used to connect to the Internet. If contacted users did not then stop their illegal copying, the providers would temporarily disconnect them from the Internet for a specified period of time or cancel their service-provision contracts.

(Mar. 15, 2008)

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Currently there are 93 comments on this Article:

  1. Smith6612 says:

    You just have to love reading or hearing about how these guys contradict themselves all the time over issues such as these, and of course the smell of Astroturf in the morning.

    Besides, the article did mention Japanese upstream caps. Aren’t those caps around the 125GB per day/week mark? But considering Japan is wired up with fiber optic cable and DOCSIS 3.0 cable, and has 1Gbps satellite service, with the ability to get a symmetrical 100Mbps line for $30-50 a month, maybe even a Gigabit for something affordable, that’s crazy. I’d only imagine to get speeds like that for that cheap here, considering I’m chugging away on two DSL lines that run at 3Mbps and below.

  2. Jon Henke says:

    Actually, I’m perfectly happy to be transparent about this stuff. You may have noticed that I’ve published it. We’re still building the Digital Society website, but I’ve been perfectly transparent about the project with everybody I’ve talked to about it, and I’ll be disclosing any and all involvement in the project once we’ve actually got the website built and the various pages written out.

    • While you are here, can you let us know:

      1) Is there any industry money backing your broadband issues/advocacy, either for DS, Arts+Labs, or DC ST? And, has DC ST or any other PR agency you have an interest in been hired by any telecommunications interest to advocate their positions on Net Neutrality and usage caps/bandwidth management.

      2) What is your position on broadband stimulus funding to expand broadband services? As a libertarian, I’d expect you to be opposed to any government funding for broadband.

      3) What is your position on municipal (NON-taxpayer funded or supported) broadband competing with incumbent providers. Do you object to a town or municipality floating bonds to construct fiber networks to be administered by a third party entity on a subscription revenue-sustaining basis?

      4) While efforts by Arts+Labs to combat malware and viruses is commendable, isn’t it fair to say the interests and people that partner with that group are much more focused on copyright issues? What concrete things does Arts+Labs do about virus and malware?

      5) Where are consumers represented in all of this?

  3. Jon Henke says:

    Well, as you point out above, I’m quite open about where I work and have worked. You’re welcome to do the same. Arts+Labs does not have a position on net neutrality; in fact, our members take different positions. While I have not checked with them, I believe they support the FCC’s 4 principles.

    The purpose of Digital Society is to explore a lot of technology policy issues from a pro-culture and pro-commerce perspective. As we say there, “We believe that culture and commerce are inseparable, that the digital economy flourishes when people are free and rights are secure, and that free markets free people.” I’ve written a bit about that idea over at the Arts+Labs blog, too. http://blog.artsandlabs.com/2009/05/code-in-the-digital-society.html

    As for the rest, I’ll tell you what: Why don’t we set up a live (in person or by video) discussion so that we can debate some actual policy issues. I’ll run it on the Digital Society website. And tell your colleagues at other organizations that I’ll be happy to make the same offer to them. In fact, I sincerely hope that we can get a productive discussion and debate going on. We’ll agree on some thing and disagree on others. And that’s fine. Your call. Want to do it?

  4. George Ou says:

    First of all Phillip, I’ve been saying publicly saying that metered Internet is a bad idea for a long time and I’ve argued before the FCC against Larry Lessig that usage caps were a poor substitute for good network management. Lessig was the one insisting that we need usage caps http://www.lessig.org/blog/2008/04/testifying_fcc_stanford.html while I testified that it was a bad idea. I’ve also argued against the EFF and FreePress for saying that metered Internet was a great alternative. Here http://blogs.zdnet.com/Ou/?p=914 and here http://blogs.zdnet.com/Ou/?p=919.

    I’ve said that consumers would reject the metered pricing model, but I have NEVER said was that it ought to be an ILLEGAL business model. Yet we have hypocrites like FreePress using their lobbying arm to lobby for a regulatory ban on usage caps, which also happen to be among the most reasonable usage caps in the world. I mean 150 GB is pretty much a sanity check that will never be exceeded by any reasonable person. It’s only purpose is to be more transparent with every broadband provider’s policy that users not saturate their pipes 24×7 which is impossible to support on consumer grade broadband networks. If they wanted to do that, they could purchase a commercial grade broadband package.

    “In Beaumont, Texas, the limbo dance of caps last left residents picking between a cap as low as 20GB with AT&T or a 40GB “standard plan” from Time Warner Cable, before Time Warner dropped the “experiment” for now.”

    Now this is just plain deceptive on your part Phillip. Why are you quoting the lowest 20GB cap at $20/month for 768 Kbps service rather than the 150 GB cap available to consumers for $35/month which offers 6 Mbps service?

    Now as Jon said, if you want to debate publicly, we’d be happy to do so. These personal attacks don’t really advance the debate, and you’re barking up the wrong tree against someone like me who has been widely quoted as saying “The metered Internet has been tried and tested and rejected by the consumers overwhelmingly since the days of AOL”. I just have a problem with people misrepresenting the issues and your hypocritical friends at the FreePress who told the FCC that metered is a great alternative but now they want it outlawed. Some of these more restrictive caps may ultimately be rejected by the consumers, but it should be up to the consumers to reject it. And if someone wants to offer a very inexpensive service with a low cap, there’s nothing unreasonable about that even I personally would never go with that kind of service. We don’t need the government to outlaw every business model that some of us don’t like.

    • TM says:

      “I mean 150 GB is pretty much a sanity check that will never be exceeded by any reasonable person.”

      Right now that may be true. But what about 5 years from now?

      Five years ago, waayyyy back in 2004 (I say that tongue in cheek because that was not very long ago), I used no where near the data I do now. My usage has enhanced my life and greatly increased my knowledge and understanding of a number of topics. It has directly had positive influence on me to grow as a person. I met my soon to be wife through friends I made online. we likely never would have met otherwise.

      If I had accepted usage limits that seemed “reasonable” then, I would be so stifled by the expense of using the internet now, that I likely couldn’t afford using the internet.

      It’s like charging money to get into the library and then charging you more money to read the books, listen to the audio selections and watch the videos. Would you accept that? I will not.

      Usage caps are just wrong. They’re a bad idea. Yet the “providers” won’t let go of the idea no matter how many times the user screams they don’t like or want the idea around. As content becomes more sophisticated it requires more data. Caps will choke this natural progression.

      • George Ou says:

        Why would you assume that all will remain the same in 5 years? Isn’t that kind of like assuming we won’t get more bandwidth at the same price in 5 years? I mean by the end of this year, Comcast will already be hitting 80% of their market (40 million homes) with DOCSIS 3.0, and they’re already doubling customer speeds at no additional charge. As the speeds increase, and average user consumption increases because content bandwidth is increasing e.g., YouTube jumping from 320 Kbps to 640 Kbps to 2300 Kbps, consumer broadband caps will be tailored to the vast majority of mainstream consumers as they are today. That means it will have to adjust upwards. Those who are outside of the mainstream will simply need to purchase commercial grade broadband like they can today which either has larger usage caps or no caps. So if you’re not happy with Comcast’s 250 GB cap, you just switch to their business class broadband service with no caps.

        The reality is that the sanity check caps of 150 and 250 GBs were always in place, but they weren’t clearly disclosed. Had you consumed more than that on a consistent basis, you would have gotten a phone call from Comcast asking you to stop violating your usage terms. But nobody knew what was exactly reasonable and what was not, so now we have more transparency which is a good thing.

        • TM says:

          I can not even formulate a proper response to address the ridiculousness of your reply.

          First i live in Rochester, NY. Comcast is not in this market. We have TWC or Frontier for internet. They are not equivalent services. By your ideology, if I don’t like something I should just change my provider.

          That would be an option I’d love to have. but if you change from TWC in Rochester you have to go to a lesser level of service for the same money. There is no real competition here. You are envisioning and living in a hypothetical bubble.

          Second, I doubt they will adjust the level up for the increase in need. That will reduce there ability to excessively grab cash from my pocket. i don’t trust them to police themselves. They need oversight. The internet has become a utility in the same vain as water, gas, electricity or telephone.

          • Michael Turk says:

            I’d like to challenge TM’s assumption here as he is propagating a dangerous misconception.

            We have TWC or Frontier for internet. They are not equivalent services. By your ideology, if I don’t like something I should just change my provider.

            That would be an option I’d love to have. but if you change from TWC in Rochester you have to go to a lesser level of service for the same money. There is no real competition here.

            There is a tremendous misconception that all competition is based on price. That’s simply not true. At any given time in the airline industry, for instance, there is a very marginal difference in price between flights despite there being a wide array of airlines. In an industry with roughly fixed and comparable costs, competition becomes competition on service. The planes cost teh same, fuel costs are relatively equal, airport service fees are constant, so you choose your airline based on customer service record, on-time departure, cattle call versus assigned seating, etc. There are plenty of options at a set price point, but few major differences.

            With ISPs, the costs for the wire to your house from the node may vary slightly, buy the rest of the network looks very similar and has similar costs. As such, the competition is likely to be on features.

            What you are unhappy with isn’t competition on cost, your unhappy that the other product, at the same cost, has different (and in your eyes) unacceptable features.

            I really like assigned seating, but may occasionally have to fly Southwest with its open seating to get the flight at a convenient time. Why do you expect your Internet service to operate under different economic principles? You think you should have a choice of a dozen operators at different prices and service levels, despite them all having to invest the same capital.

            If you ever see competition on price it will be a short term competition based on a new entrant trying to gain market share quickly. It’s unlikely to be around for long.

            • TM says:

              Price is only a part of the concern as to the equalness of the available services in my market. Don’t assume it’s my only basis of comparison.

              • Michael Turk says:

                You specifically stated that it was a question of lesser services for the same money. That implies quite directly that you want either a) more services at the same money (which is competition on features) or b) lesser services for less money (which is competition on price).

                My point is the fixed costs are roughly the same from the node backwards, so lesser services for less money isn’t very likely. So that leaves the former. I wasn’t really assuming your position, just going to the logical conclusion your statement created.

            • There are only “two airlines of significance” in this analogy.

              A few years ago, Rochester was in the unenviable position of USAir and United controlling, by far, the largest segment of the local airline market. Yes, there were some other airlines serving here, but their reach to different cities was more limited, flight times inconvenient, and, because of the relative lack of competition, the prices locally were set VERY HIGH in many instances.

              So high, a lot of people flew out of Buffalo to avoid the ludicrous local markup.

              Why were prices so high? Lack of competition of course. The drive was to bring in additional airlines to compete, especially discount providers. It took (close your eyes free market people) GOVERNMENT incentives to bring more airlines here, and when they did, prices immediately dropped.

              Anyone living in a city with just a few “airlines” will be paying a lot more to use them.

              In the absence of competition, oversight, regulation, or even municipally built alternatives are the best way to assure lower prices and better service, or at least provide a consumer safety valve.

              In the broadband market, I have not seen many people complain about the stable price most have been charged for service since the late 1990s. What has happened recently is the price is going up, and limits are going on. With just two dominant providers, as was the case in Canada, the competitor simply raised their prices and put similar limits on their own customers.

              • Michael Turk says:

                Thanks for making my point.

                You’re fortunate that you had the luxury of flying out of Buffalo. I’m from Albuquerque. If you don’t like the flights there, you get to drive 8 hours to Phoenix or Denver to catch a different flight. Imagine if you had to drive to DC to get competition.

                in Albuquerque, there are similar issues with few flights/airlines into the city. There are few non-stop flights in and out and those are always full (competition on features). Albuquerque is a fairly small city (750k people) and not close to another large metropolitan area. This is where market dynamics come in to play. ABQ is the only game in town. As a result, you pay more to fly in/out, and you pay way more to fly in/out on a non-stop flight.

                However, that doesn’t change the dynamics of cost. Because it’s a small town, hard to get to, and not on many non-stop lists, the ticket prices go up. Most of that is due to flying half-empty planes in and out (lower population equals less travelers and a higher cost per traveler to the airline). Fewer people footing the bill increases the social cost of the good. If all those people were coming from the same place, you could fly nothing but full planes non-stop. Because they’re coming from all over, they have to be aggregated together in Phoenix or Denver and sent in.

                If another airport opened up (or another airline began offering service), it could offer a lower “at cost” option to attract flyers, but it would eventually face the same issues (higher cost per flight/passenger, maintenance costs, etc). It would be forced to raise prices to account for these things or cut services.

                Simply having the government demand more flights, or even having the city underwrite costs to get more flights is a massive waste. The problem isn’t that you have no access to an airport and no access to flights, the problem is your demand for what you consider to be value.

                ISPs are no different. Costs to deploy fiber to rural areas are exceptionally high. That’s an area where government, as you say, certainly has a role to play to promote broadband deployment and adoption (as they have in the stimulus). The government can work to ensure that everyone has access. It’s not the government’s role to make sure everyone has features.

                Just as you are not likely to see 10 airlines rushing to provide service to Albuquerque or Rochester, you probably a) won’t see companies rushing to be the 3rd, 4th or 5th broadband provider in a given area and b) the providers that are there will compete on features not price.

                That leaves a few people (yourself included) with a conundrum at the airport and on the Internet. Which service do you use? The original commenter said he felt the other service was inferior at the same cost. That’s the same reason I don’t fly Southwest in and out of Albuquerque.

            • Full disclosure time:

              Michael Turk is Vice President of Industry Grassroots for the National Cable & Telecommunications Association, where he is working to build a robust grassroots activist base for the cable industry. Using experience gained in more than 10 years of campaign politics and Internet activism, Turk is employing traditional grassroots organizing and sophisticated web based tools to carry the cable industry’s message to Congress and state legislatures.

              http://pdf2007.confabb.com/users/profile/Mike+Turk

              We are pleased you have joined us Michael, and feel free to participate. But I want my readers to understand you have a direct connection to the industry and bring the cable industry’s point of view to the discussion.

              There is nothing wrong with that, in my view, but I like our readers to understand that as well.

              • Michael Turk says:

                You can also click on my name which has been linked on every comment to the cable industry’s blog which I co-author with a colleague on behalf of the association. The e-mail address I provided you with each submission is my NCTA address.

                I have done absolutely nothing to hide my association with the cable industry. I routinely track what people are saying about cable and broadband and reply under both that address and url. Those are nasty habits I have as the guy who handles social media outreach for the industry.

                However, if you want truly full disclosure, I am also good friends with Jon, have yet to meet George, but we’ve talked by phone, and I don’t know anyone else on the page.

                Does that cover it?

          • George Ou says:

            I’m not sure what is so difficult to understand that Time Warner’s final proposal wasn’t THAT unreasonable since they lowered prices for the lower usage caps. I’ve criticized them a lot in the past when they had no price cap safeguards in place and no warning months where they waved overage charges, and when it wasn’t certain that they would lower prices for the lower cap tiers, but that changed. Now while I still don’t think it’s as good a deal as other ISP like AT&T, Verizon, or Comcast, I don’t think it ought to be made illegal but I think the consumers have a right to reject it (as you clearly have). So I don’t know exactly where we disagree on this point, except maybe the fact that you do want to see a regulatory ban and I just want to see a market rejection.

            Now since Time Warner already backed off from it, it’s clear that the market has spoken loudly and they’ve heard the message. So I think I feel somewhat vidicated by my position that the market should decide.

            The point of my article was that the criticism of the 150 GB cap really wasn’t waranted compared to the type of caps we see in most nations.

            • TM says:

              I truly question your ability understand the position of those against this proposed practice. Your responses decrease rather than increase my confidence in your ability to comprehend the true gravity of the situation and it’s impact on the markets that don’t enjoy the luxury of real and equal competition. We can choose A or we can choose B, but A and B are not equal on any level.

              And if you really believe that TWC (or others) will not come back with cap and tier pricing, I have prime ocean front property in Iowa you may be interested in. Or perhaps you might like to buy a bridge in Brooklyn?

              • George Ou says:

                “And if you really believe that TWC (or others) will not come back with cap and tier pricing, I have prime ocean front property in Iowa you may be interested in. Or perhaps you might like to buy a bridge in Brooklyn?”

                Again, why are you making asumptions about what I believe or don’t believe? Did I say that TWC or others won’t try it again? If so, please cite a specific quote.

                What I said was that the American market (most of the OECD nations have gotten used to tiny caps) will most likely reject something along the lines of a Time Warner proposal. I also don’t expect American attitudes to change, nor do I believe they should change. So I’m basically agreeing here with you so maybe you should try and pick a fight with someone you actually disagree with.

            • “I’m not sure what is so difficult to understand that Time Warner’s final proposal wasn’t THAT unreasonable since they lowered prices for the lower usage caps.”

              That’s also false. They only introduced their ludicrous super light plan during the second go around after we slammed them that their original “light usage” plan actually cost more than their existing light tier promotion that was next to impossible to find on TWC’s RR page for Rochester. There was no savings for anyone, just the prospect of a higher bill for grandma if the grandkids got on the computer and blew through her cap.

              They ended up coughing up a silly 1GB plan and doubled the overlimit fee so people wouldn’t try and use it as a “true metered” option.

              They had all the angles covered, and the only thing this managed to do was increase the outrage even more.

              “The point of my article was that the criticism of the 150 GB cap really wasn’t waranted compared to the type of caps we see in most nations.”

              It calls out just how much this country has to be embarrassed about in our poor position in broadband rankings, and the fact the industry here wants to move us backwards with caps and tiers, and throttles if they can manage that too. All for a product that is enormously profitable for them to provide, but without the sustained competition that convinces them they must pour some of those profits into improving their networks.

              Instead, they pay Washington think tanks to astroturf and lobby for less oversight, statewide franchising, no competition if they can help it, no involvement in their pricing abuse and further relaxation on ownership limits.

    • Ron Dafoe says:

      The problem is the language that you use. There should never be a talk that well, I don’t like a cap system, but this cap system is pretty good.

      I see a cap system as a direct end around to net nuetrality. It allows providers to collect “bandwidth insurance” (kind of like that protection insurance from the mafiaa) that your data will not be limited to our customers.

      There is already examples of what I would call abuse of usage caps in other countries. Why should we, as a group, accept usage caps when there is a history of companies that abuse the cap system?

      We have seen the direct effects of a cap system in Canada. Large providers pushing caps to everyone and lowering the caps while raising the prices.

      We have seen caps close down businesses.

      I don’t care what the amount of cap that they talk about. Businesses are there for profit, they are not there to serve the customers need. They end up serving the customers need becuase there is a profit in doing it.

      There are 2 problems with broadband internet right now.
      (1) There are alot of areas where there is no choice.
      (2) Like cell phone companies, broadband companies don’t really compete on certain things. If one institutes a cap, the others follow suite. It is like they have this gentleman’s agreement. That really isn’t competition.

      Rochester, NY is the second largest economy in NY. It is the 3rd most populous city in NY. Yet our viable broadband consists of Time Warner and Frontier. For people concerned with speed, TW is really it. Frontier cannot compete. We don’t have Verizon to push TW. Frontier pushed TW in the beginning, when TW lowered their speeds, but not anymore. They seemed to have reached their limit.

      Time Warner has shown us in the past they they will decrease service and keep the same monthly payment when allowed to do so when there is no viable alternative. They will do it again.

      Would your zdnet article have been read by less people if metered access was the norm? I would say probably, becuase these kinds of things are only liklely to be done when everything that people need to do on the internet is done. I don’t care how much bandwidth that your article takes, it is bandwidth that I have to evaluate wether or not I want to use my precious resource in looking at.

      • George Ou says:

        “Would your zdnet article have been read by less people if metered access was the norm? I would say probably, becuase these kinds of things are only liklely to be done when everything that people need to do on the internet is done. I don’t care how much bandwidth that your article takes, it is bandwidth that I have to evaluate wether or not I want to use my precious resource in looking at.”

        This is just plain silliness, and you know it (or at least I hope). You could load my old ZDNet page and thousands of other websites every 10 seconds nonstop 24×7 and not exceed 5 GBs. That’s because you’re talking about 10 Kbps at most (100 KB average per webpage).

        As for Time Warner, they actually did lower their prices on the smallest caps which adequately served the vast majority of their customers, so it is reasonable to lower the cap if the price is lowered as well. Now I used to criticize TW a lot and I’ve been widely quoted as saying that using your TW connection 24×7 would lead to a $5000. But TW had already addressed that uncertainty of billing concern by instituting maximum bills of ~$100 and they would wave overcharges for a month so that you get fair warning so you could adjust your usage patterns or buy a bigger package, so my former criticism no longer applies. Still, they’ve already been pressured and intimidated into backing off so it’s kind of moot right now.

        All I’ve been trying to say is that hey, I used to be against this stuff but after further examination of the facts, it doesn’t look so bad and we need to put things into perspective before we start screaming for price controls. Even if some of these deals do suck (and it’s not clear that these new proposals suck because of the added safe guards in place and the lower prices), it should be up to the consumers to reject it.

        • Ron Dafoe says:

          Your not getting my point. When people have to think if they should use their bandwidth for everything they do because it is rationed it is not good for anyone.

          The fact is, it will cause people to think about wether they want to do this or that or the other thing. Especially low limits, like 1 or 5Gb a month.

          What is wrong with the tiered services that are offered now from every major provider? They all seem to do well with the current plans they have. I don’t want to check a meter to make sure I don’t go over my internet connection limit. Maybe a $100 internet bill is not a big deal to you, but it is to me and alot of other people.

          What about areas that don’t have competion?

          • George Ou says:

            I’m not sure why you’re focusing on a hypothetical, because there are no outrageously priced 5 GB cap services. I only raised the 5 GB cap to point out the absurdity of your claim that just surfing web sites will run you over the cap, which can reasonably be interpreted as scare mongering.

            They type of caps we’re mainly seeing is $43/month for 15 Mbps service with a 250 GB cap, or a $35 service for 6 Mbps with 150 GB cap when almost all the OECD nations are dealing with 5 to 40 GB caps. I don’t see the problem here, and the market has already slapped down Time Warner’s proposal.

            • Ron Dafoe says:

              Your still not getting me. Yes, my example was extreme but but not so extreme. We can debate this issue to death. You took one of my stances, missed the generalization, and skipped the rest of the post.

              My point is what you do on the internet adds up. When I access you articles, I may have to decide if it is worth using up any of my bandwidth allotment for the to read it, however small the size.

              I can only tell you what is in my area. TW “competition” says that 5gb is acceptable. While not enforced at this point in time, that is what they deem as exceptable.

              I also do not trust that TW will raise the caps as bandwidth need increase, they have shown, previously, that they slow speeds down without competion.

              • George Ou says:

                Well it’s kind of hard to “get you” when you’re willing to take liberties and just make up phony examples.

                • Ron Dafoe says:

                  I specifically told you (the competition) Frontier Internet has a 5gb per month acceptable usage policy. That is what they consider fair usage. They say right now, that they will not doing anything about it, but that can change at a moments notice and that specific language has been there for 1 year. It is also a similiar price to TWC.

                  http://www.frontier.com/policies/residential_aup/

                  And your still skipping the rest of the post and focusing on an example.

          • Michael Turk says:

            Your not getting my point. When people have to think if they should use their bandwidth for everything they do because it is rationed it is not good for anyone.

            The fact is, it will cause people to think about wether they want to do this or that or the other thing. Especially low limits, like 1 or 5Gb a month.

            Gas, electricity, and cell phone minutes are rationed with no complaints. I have to pay attention to how much I drive because gasoline is not a free, unlimited resource. When I turn up the heat in my house, I have to think about the potential impact on my utility bill not to mention the potential impact on the planet. If I have a cell package that is anything less than unlimited calling, I have to pay attention to my usage or I pay overage charges. If my chatty friend calls, I have to think about how much I want to talk to them versus how much I want to pay to talk to them.

            How is this any different? Your usage of a shared resource impacts the user experience for others on the network. You can use it as much as you want, but to regulate the “social impact” you may have to bear a larger cost or hit limits.

            As George said, transparency is the key here. Unless I am on a smart meter, I have no idea what my electric usage is, yet I am expected to pay the bill anyway. If I have a smart meter, I can see where I am at and turn off lights, turn down the heat, or do whatever I need to adjust my usage. I may know the rough fuel mileage of my car, but may not have an idea of what my effective range is. Many newer cars provide an effective range based on consumption versus tank fullness. Mobile companies provide measures of minutes used.

            Bend Broadband, a cable operator in the Northwest, has been using caps for quite some time. They have a 100GB cap and provide usage tools so customers can see their usage. They also look closely at how many people break the cap. Something north of 95% of their customers never do. They have had very few complaints with the caps since implementing them.

            If an ISP clearly states your service levels, and gives you a way to monitor that usage, why would you assume consumers would not adjust just as they have with cell phones, gas, or electricity?

            • Ron Dafoe says:

              We have seen this response before. Please go back and read some of the articles all over the internet about it.

              I pay for my services based upon my speed. I have the highest speed available in my area. TWC has stated that those of us on the higher speed tiers are suplimenting their lower speed tiers, am I mad about that? No. I pay for the speed that I would like.

              Managing traffic on a network is a totally different subject, a subject that I agree with as long as it is made known what kind of traffic you are effecting. Arbitrarily limiting data is not something I agree with.

              • God… not the gas meter analogy again. I need to build a resource guide to address these so we don’t have to repeat ourselves. I’ll be back shortly and post links to refute the very bad analogy here. Just notice the one technology that is most closely related to broadband that proponents of this argument never bring up: standard wired phone service.

                That’s because wired phone service already has flat rate pricing for local calling areas in most places -and- is rapidly moving to a flat rate long distance calling model as well (brought about in part by Voice Over IP and cable digital phone products which tout ‘talk as much as you want for one low price!’)

                Suspicious, isn’t it? :-)

                BTW… cell phone minutes are also moving rapidly towards flat rate pricing as well, either with unlimited calling plans or “calling circles” that allow unlimited talk time to the most frequent people you are likely to call.

                Mobile broadband is another matter… another marketplace with “competition” that has magically delivered 5GB of data for the same price across virtually every provider.

                Thank you for NOT bringing up the terrible all-you-can-eat-buffet and steak analogy we had to listen to in April. It turned some of us into vegans for life. :-)

                Bend Broadband, by the way, is despised because of its usage caps. “Very few complaints” is amusing, considering the company is unofficially called Bend Over Broadband, because of the cap which started in July 08. Just a few reviews I’ve seen:

                “Beginning July 08, BBB will set a limit of 100G per month of bandwidth. More than that you can upgrade or pay a $1.50 per G overage charge. Since I use Skype, Internet Radio, Netflix on-line, and Amazon (TiVo), these caps are expensive and excessive. Bye-bye Bend Broadband.”

                “I looked at all the options I had but since I live out of town I was quite limited, this was the best choice. I am on the gold 16mb gold plan and pay 46.oo a month, I have been hooked up since the day Bend Cable turned Redmonds internet on 6 years ago.

                The 100 gig cap sucks and I would leave BendBroadBand over it if I had a place to go. Basicly I am paying 0.46 per gig on my plan now and if they charged 0.46 per gig overage, I could live with that, but they are charging 1.5 overage which means they would rather see me gone.”

                Sort of reinforces my point that given the option (the key operative words there), people will flee capped broadband.

            • Ron Dafoe says:

              I am going to reply becuase I despise the analogies presented. Bandwidth is not a consumed product in the end like all of the things you mentioned. Nobody has to make another GB after I “use” the GB I received from my broadband connection.

              The better analogy would be cable tv service, as it is data as well.

              We don’t and are not talking about metered cable tv service, why are we talking about metered internet services? We don’t consumption bill on the amount of data that is consumed by watching TV. We package it, just the like internet service.

              • George Ou says:

                “Nobody has to make another GB after I “use” the GB I received from my broadband connection”

                Every GB you use is a GB that another 19 people can’t use. There’s a finite number of GBs that a network can support, and it can’t support every user saturating their pipes 24×7. That’s why broadband (which is always shared) costs about 20-40 times less per Mbps than dedicated circuits. This shared model is the secret sauce of packet switching networks like the Internet. It’s a much more efficient network.

                • Ron Dafoe says:

                  But when I am done using it, it is there for the next. It magically appears and is not consumed forever as the other items. That is why ISPs use network management, to make sure their shared resource is available to everyone.

                  Just as every time I watch a tv show, it is not consumed and someone has to make it again.

                  • George Ou says:

                    “But when I am done using it, it is there for the next. It magically appears and is not consumed forever as the other items. That is why ISPs use network management, to make sure their shared resource is available to everyone.”

                    And that’s precisely the reason I say that usage caps are inferior to network management. However, Phillip’s buddies at Free Press testified before the FCC that usage caps were superior to network management, and he still hasn’t clarified if he’s affiliated with Free Press though he’s eager to defend their hypocrisy.

                    However, you do need to understand that other countries have higher transit peering costs with the United States, because all the desirable networks are here in the U.S. which is why they cap more. Time Warner also has a little more pressure to have smaller caps because they don’t have the same kind of settlement free peering contracts in place. The other problem is that Time Warner has been scared to manage their network, and who can blame them with the kind of pressure that Free Press put on them via the FCC.

                    • Ron Dafoe says:

                      The problem is, caps do not manage a network, ever. It is an arbitrary usage measurement.

                      The person that is connected and using their connection all day long, everyday is consuming more of TWs network resources in the month, than I am if I download 5Gb a day in 2 or 3 hours and never utilize it again in that day. Even though I may consume 150Gb of data, it is in bursts rather than constant while the previous user is constantly using bandwidth. He may only use 75Gb in one month. Why am I using more network resources on my 2 or 3 hours a day than someone 24/7?

                      Available bandwidth is not measured in Gb per month, and it shouldn’t be.

                      I don’t know the history that you talk about with Free Press and I don’t care. Fully disclosed network management is good for everyone as long as it does not go overboard. I don’t know why you think TW is not using it today. They are.

                      There is also a difference between altering packets, throwing certain kinds of packets out, and slowing a certain type of traffic down.

            • Michael Chaney says:

              So in a truly “metered” world, as with the gas in my car and the electricity at my house, I should receive a bill for $0 if I unplug my router right? I mean if the analogy holds up then this would be true right? Of course this isn’t how it works now is it, and why is that so? Because the true cost of service lies in providing the connection (yes, plus admin, facilities, etc.) and NOT the actual data over that connection. Just ask the movie studios what answer they were given when they asked ISPs for true “metered” connections to transfer large files between post-production houses.

              And with other resources, it’s pretty easy to meter the usage. I can go look at the spinning wheel on my electric/water/gas meter, the numbers on the gas pump (accuracy guaranteed by a gov’t regulatory body), or the call/text history on my phone, but with Internet connections it’s proving to be much more complicated. Which meter is right? Where is this metering happening? What is actually metered? I’m I penalized for dropped packets, retry requests, and collisions? What recourse do I have for UDP floods or DoS attacks? Why should I have to pay for the flash and video ads by viewing the ISPs own website?

              Look at all the problems the Canadians are having with this, and is it worth it? Consumers there don’t think so, but then again with no real competitive alternatives and week regulation, what choice to they have.

              • There has been no true “metered broadband” proposal on the table from any ISP. What we have instead is consumption based tiering, with a base price, a usage allowance, and then overage penalties. They are trying to adopt a cell phone-style pricing model at a time when the cell phone industry is moving towards flat rate calling, be it outright or with “friends and family” calling circles (or those using the same wireless carrier).

                The gas meter is analogy is ridiculous for many of the reasons I outlined here: http://stopthecap.com/2009/04/28/the-tiresome-return-of-the-gas-electric-analogy/

                For Time Warner Cable in particular, as we’ve seen their terms and conditions change to specifically exempt their own “digital phone” product from any bandwidth caps or meters, it proved my point about the massive conflict of interest in a company that wants to preserve its own business models while potentially devastating others:

                “Time Warner is also, like many cable providers, hip deep in a conflict of interest on broadband consumption. Cable has a vested interest in forcing you to “conserve” your connection, particularly by not using those services which directly compete with its business models. Streaming video online offers the customer the possibility of foregoing a cable TV package altogether. A Voice Over IP telephone provider on the Internet makes Time Warner’s Digital Phone product redundant. A Netflix set-top box that streams movies and other video programming in competition with premium/pay per view channels represent just one more service that panics many in the upper floors at Time Warner Cable’s headquarters.”

                And, as I’ve said before, this would be a unique industry to try metering on, considering you are charged for activities you had no way to control. The guy spamming you is costing you money. That network probe you are constantly subjected to eats money too. Imagine paying for advertising on websites you visit. The fact is, these metering formulas are the equivalent of charging you for someone just ringing your phone.

                The financial reports tell the real story — there is no justification for consumption based pricing, especially at the price levels they are “testing.”

                As with any telephone service out there, nine homes out of ten won’t sit on their phone for six hours a day talking to someone. The tenth home has two teens and can easily rack that up. Some of the homeowners not doing that may mildly resent their bill is, in part, based on the model that some people will use more. But if you threaten to take away their flat rate local calling plan for “fairness,” they’ll howl. That’s because they don’t want to count calls or minutes, and like the freedom they have in knowing what the bill will be every month. It’s the same in the cell phone industry. If people wanted simple per minute pricing, we’d all be using prepaid cellular with 20c a minute prepaid calling cards. Instead, people will actually spend more than they technically need for a plan with more minutes than they need just to avoid the prospect of opening a phone bill that gives them a heart attack.

                The broadband industry should be thrilled to rake in the extra profits from light users perfectly satisfied with the way things are right now. But their greed gets the best of them because now they assume they can collect even more. And with a “gas gauge,” customers will now think twice about everything they do online. Less demand = less incentive to upgrade = still higher profits from existing networks.

        • Ah, the debate tactic where instead of addressing the issue, you instead address the example. Yes George, nobody is going to go over a bandwidth cap downloading your article every 10 seconds. And it’s a good thing too, since that’s obviously how people use the Internet– to read your old articles.

          It sure is good that in a typical day, I don’t get email with links to YouTube videos that friends and family want me to see and file attaches that my boss wants me to act on. It sure is good that I’m not streaming music from both familiar and new artists in the background while I work. It sure is good that when listening to that music, I don’t get it in my mind to see if the artist has created a music video for a favorite song. It sure is good that when I get home from work, I don’t ever forget that I left some large files at the office and download them to my home computer. It sure is good that I don’t ever entertain myself by watching a favorite show on Hulu. It sure is good that I don’t use any of those over-the-Internet backup services. It sure is good that I don’t ever update my Windows, Mac, or Linux computers. It sure is good that I didn’t download the latest Ubuntu distribution. It sure is good that I never watch those videotaped lectures from MIT and Stanford. It sure is good that I never…

          Nope, I don’t do any of those things. All I do on the Internet is read old articles from you.

          • George Ou says:

            Enough with the cheap sarcasm. I was simply pointing out the ridiculousness of the claim that mere web surfing (my old articles or any other site) would run out a 5 GB cap. There’s no reason to take it literally. The main reason I pointed to those old articles was to point out that I have been fighting Free Press and the EFF for endorsing those 5 GB cap plans as supposedly a better alternative for intelligent network management. So please stop your selective listening, and stop saying that I think a 5 GB cap is somehow a good or practical thing.

            In no way was I endorsing having 5 GB caps, all I was doing was pointing out that it’s how it is in most of the OECD nations and that 150 GB caps for $35/month 6 Mbps in the US was not unreasonable.

            Now if you actually have a point to make or a criticism of this article or past articles, other than phony straw man arguments, please make it.

            • Ron Dafoe says:

              I think this sites point is clear:
              No caps. Sell on speed tier services.

              That is what I agree with.

              I would also add that these companies stop telling their customers one thing and their investors another. Stop trying to save your cable business with limiting your internet service.

    • George, several points:

      1) I was aware of your comments and your position on this issue before writing the story. I am aware you do not feel usage caps are the best solution — network capacity upgrades are, but you yourself have stated that they “are needed”:

      “I’ve argued that it is far more efficient to manage the network but until then the caps are needed.”

      On this we fundamentally disagree, and you are drinking industry Kool-Aid when you buy into a capped broadband experience, particularly at the levels some in this industry are proposing.

      I am also aware that the positions you took while at ZDNet may or may not remain your positions in your new job. Some folks with pretty independent reputations have ended up at Washington think tanks and PR firms and suddenly develop a “new attitude” depending on the client of the day helping to sustain their salary. It’s one of the reasons those “names” from the industry often end up in lucrative PR jobs, riding off their earlier reputations. I sincerely hope you are not one of those. Time will tell.

      Here is a position you held in 2007 which would make you a natural ally for our group:

      “I as an American have no interest in paying higher prices like they do in Australia (no offense to the beautiful country of Australia and its people). Not only does a metered Internet service plan screw the low-end users, it makes BitTorrent or any kind of peer-to-peer networking cost prohibitive.”

      I personally don’t care about BitTorrent as I don’t spend my time anchored at Pirate Bay, but this technology being specifically called out does represent a problem for me. We agree here.

      Then you wrote this:

      “There are plenty of price tiers in the US that work by limiting the rate at which you can download but not the amount you can download so it’s not like everyone is forced to subsidize the big bandwidth users. You can get 768 kbps DSL plans in the US for $15/month which still allow you to theoretically download 248 GBs per month if you kept it running continuously. This offers the best compromise where Internet usage isn’t stifled by constant fears of going over the limit or what time of the day it is like your cell phone.”

      We agree 100% here as well. Speed based tiering is perfectly acceptable to us.

      So what happened to the George Ou that wrote these things two years ago and the one who today writes “caps are needed?”

      For the record, Stop the Cap! does not oppose speed-based broadband tiers, which would offer a natural limit as you noted above. If you offer heavy users faster speeds at higher prices, many will happily pay more for a better experience. We’ve advocated that here repeatedly.

      But this industry does not listen to its customers unless an insurrection gets mounted, especially in Congress.

      Please stop beating up Free Press over the Massa bill. Massa is our local congressman and the idea for this legislation started with local residents like ourselves. The bill, by the way would not make caps or tiers illegal (as you state), but would rather require oversight and verification of the need (based on their costs, not just their arguments) to impose this kind of pricing, instead of the PR snowjob we get from this industry that wants to throw a Money Party at consumers’ expense now.

      Your argument with FP historically comes as a result of your opposition to their belief in Net Neutrality. In a world where a true metered model, with usage allowances sold for closer to what it really costs providers — 10c per gigabyte or less, and would guarantee the user a non-throttled experience, I can see why a group might advocate that over throttles and premium tiers of service for content producers.

      What FP forgot is that we’re talking about the deregulated telecom industry that will never leave money on the table… ever. I’m certain FP and others were mighty surprised when providers started talking about charging $1-5/GB, often thousands of times more than their own costs, and define that pricing as an overlimit penalty/fee. Because a metered model never actually showed up. It was simply consumption based tiers with paltry allowances designed to cash in on overlimit fees while also acting as a natural deterrent for “over-use,” with a customer fearing they’ll exceed their limit.

      I wasn’t surprised, but then I’ve watched and covered this industry since the mid-1980s, so nothing they do really surprises me.

      Now FP has adopted a pro-consumer position that recognizes these schemes for what they are – Internet Overcharging.

      If we adopt your position that usage caps are “needed,” that is a slippery slope that leads to lower limits and higher prices. Canada is an example of this at work, today.

      2) Ironically, when Time Warner Cable wanted to conduct their experiment, the heaviest users of them all — commercial customers — were exempted from the “experiment.” How nice. It also blew a hole right through their rhetoric about “heavy users” consuming more than their fair share. In fact, many residential customers were contemplating commercial accounts just to avoid the despised cap. BTW, residential or commercial, it travels across the same cable.

      3) Our readers here are well aware of the different cap levels, and I made it quite clear about AT&T’s which is “as low as” 20GB. Why is that tier so important? Because, as many of our readers in Beaumont have told us, AT&T DSL at 6Mbps is a pipe dream for many of them, lucky to receive just under 1Mbps service, yet being asked to pay for an account offering 6Mbps.

      Most of them fled AT&T the moment TWC ended their 40GB “experiment.” Nobody wants 1Mbps DSL service that actually costs $45+ a month once all of the taxes and fees are piled on.

      4) As I am sure you’ll discover, a lot of our readers are actual consumers who confronted the pillaging of their pockets by providers looking for higher profits. A lot of what you are writing is theoretical, but not at all factual on the ground level. There are many examples:

      – Your claim that TWC capped customers can flee to DSL to avoid the cap: Really? In Rochester, Frontier Communications has an Acceptable Use Policy defining “acceptable use” at 5GB per month. They got slammed for trying this by us (it was the incident that started Stop the Cap!) and have been held back from enforcing it… for the moment… but let’s be real. Why put it in an AUP for no reason at all? Where do people in Rochester go to avoid the cap? They move to Buffalo or Syracuse where Verizon FiOS is available, apparently. Great solution.

      - Your belief that DOCSIS 3 and/or fiber spells the end of caps. That is delusional and already proven totally inaccurate. If you didn’t live in Rochester, Austin, Greensboro, Beaumont, or San Antonio, I guess I can forgive your ignorance on this point. But not after today. TWC’s consumption billing trial was sold to us to pay for those DOCSIS 3 upgrades. Once we agree to the cap ‘n tier, we get faster broadband… but wait for it… AND MORE CAPS! That’s right. A proposed 50/5 tier for $99 a month wasn’t cap-free. No no no… it was to be capped at either 150 or 175GB per month. What a great deal. Not.

      - For TWC customers, adopting the system they proposed would have made my broadband bill, currently $50 a month, jump to $150 a month with absolutely no change in service quality or speed. That’s $150 a month for 15/1 service.

      In fact, one only needs to observe the marketplace in Canada to see our future. It’s the market where as time passes, usage caps actually DECLINE, not increase, based on company babble from providers like Bell they were offering allowances that people didn’t use, so they could lower them. That’s mighty nice of them, because apparently what people didn’t use was somehow costing them money.

      Again, it’s pure theory on your part to suggest usage caps will be made increasingly generous, because you believe the marketplace will magically make that happen.

      And this is my fundamental problem with the head in the sand “free market does no wrong” people. They ignore the fact this marketplace is highly controlled by a handful of providers – a duopoly in most cases, who have shareholders and a Wall Street press that are quite happy with nobody rocking the boat. DSL competed on price, cable competed on speed. Now there are pesky problems screwing with the model, like people disconnecting telephone line service causing heartburn for phone companies, and online video (and consumer downgrades) potentially impacting the bottom line of cable operators.

      Shareholder value means finding the money from somewhere, so broadband, the great success story for both providers, is the place they hope to get it. So prices increase, limits get thrown on, all while their costs and expenses actually decline. TWC is a perfect example. Lower broadband costs, reduced investment in their broadband network infrastructure = higher prices and caps and consumption tier experiments for customers.

      It wasn’t actually consumers that got TWC to temporarily drop their overcharging experiment — it was the threat of Congress intervening which made Britt pull back. I know, I was standing on the lawn in front of TWC next to Senator Schumer when he made the announcement.

      You are also completely wrong if you think the marketplace has spoken and TWC is done with their experiment.

      Glenn Britt, among others, has made it quite clear NOTHING has changed in their thinking about consumption based billing and caps. What they feel is required is Re-Education of their customers (in other words, a PR firm run snowjob). They have not permanently shelved a thing, and their own spokespeople have made it clear they’ll be back… sooner or later.

      So again, they don’t listen to customers who OVERWHELMINGLY told them they did not want this kind of pricing.

      For those of us in Rochester, at least, since they chose the only significant sized market in New York State where Verizon is not wiring people up for FiOS (we are stuck with Frontier), where are people going to take their business?

      People in western NY know a snowjob when they see one, and we’ve got the shovels out. Your theories are not our real life experiences.

      The rest of us will, since TWC and other providers aren’t in listening mode, appeal to Congress to regulate these people until the free market dream of competition actually arrives. As it stands today, the only competition is who is going to slap the lowest cap and highest prices on consumers first.

      • George Ou says:

        1) I was aware of your comments and your position on this issue before writing the story. I am aware you do not feel usage caps are the best solution — network capacity upgrades are, but you yourself have stated that they “are needed”:

        Only if you believe in the myth of the “dumb pipe” or the “rise of the stupid network” which even the author admitted doesn’t work. Capacity upgrades don’t obviate the need for intelligent network management as applications like P2P will consume 100% of the bandwidth no matter how much capacity you build in. Even 10% P2P usage can generate jitter that is toxic to real-time apps like online gaming and VoIP. See http://www.itif.org/index.php?id=205 for a more detailed explanation. That’s not to say capacity upgrades aren’t needed, and they’re already already happening. Comcast for example just gave a free upgrade to 15 Mbps with no price increase, and they’ll have 40 million homes (80%) convered with DOCSIS 3.0.

        “Here is a position you held in 2007 which would make you a natural ally for our group:
        ‘I as an American have no interest in paying higher prices like they do in Australia (no offense to the beautiful country of Australia and its people). Not only does a metered Internet service plan screw the low-end users, it makes BitTorrent or any kind of peer-to-peer networking cost prohibitive.’
        I personally don’t care about BitTorrent as I don’t spend my time anchored at Pirate Bay, but this technology being specifically called out does represent a problem for me. We agree here.
        Then you wrote this:
        ‘There are plenty of price tiers in the US that work by limiting the rate at which you can download but not the amount you can download so it’s not like everyone is forced to subsidize the big bandwidth users. You can get 768 kbps DSL plans in the US for $15/month which still allow you to theoretically download 248 GBs per month if you kept it running continuously. This offers the best compromise where Internet usage isn’t stifled by constant fears of going over the limit or what time of the day it is like your cell phone.’
        We agree 100% here as well. Speed based tiering is perfectly acceptable to us. So what happened to the George Ou that wrote these things two years ago and the one who today writes “caps are needed?”

        You know you have a real nasty habit of partial and selective quoting. It’s just like you quoting Digital Society as “pro commerce” but leaving out the “pro culture” part. What I said was that caps are inferior to intelligent network management, but without the network management in place you need the caps. It’s better to have an inferior solution than no solution.

        Moreover, I made those comments fighting your friends at the Free Press and EFF who said that metered Internet access and usage caps were a superior solution to network management. All your friends at the Free Press, Larry Lessig, and even Vuze were saying that usage caps were better. So I argued against usage caps as the better solution. Of course, I made the 248 GB comment at the time without knowledge that the ISPs already had some nondisclosed caps in place that weren’t disclosed at the time, and the $15 was a temporary price I didn’t realize was temporary at the time. So now the ISPs are disclosing some sensible caps of 250 GB, and they’re proposing 150 GB caps, which sound very reasonable to me compared to the Australian-style 5 GB caps that the EFF was touting. As for the proposed 20 GB caps on the lowest tier, I would never buy that service (though my mother would) so long as the 150 GB for $35/month @ 6 Mbps is still available. 150 GB is a pretty reasonable sanity check, while your buddies at the Free Press and EFF were touting the far more expensive and extreme Australian style caps.

        Now the Aussies have an excuse in that their peering transit costs to the US network is very expensive, so in a way I can understand why they do that though I wouldn’t want their service plans here unlike your friends at the EFF. Time Warner also has more expensive peering costs because they don’t have settlement free contracts like the other broadband providers, so that somewhat explains their motives. Again, I would never select the

        “For the record, Stop the Cap! does not oppose speed-based broadband tiers, which would offer a natural limit as you noted above. If you offer heavy users faster speeds at higher prices, many will happily pay more for a better experience. We’ve advocated that here repeatedly. But this industry does not listen to its customers unless an insurrection gets mounted, especially in Congress.

        Well, we’ll just have to agree to disagree that a regulatory ban is needed. I think it’s dangerous to start regulating and fixing prices, and I think consumers can make their own choices to accept or reject a business model. They tried price controls on gasoline in Hawaii, and it didn’t turn out pretty at all.

        “Please stop beating up Free Press over the Massa bill. Massa is our local congressman and the idea for this legislation, which would not make caps or tiers illegal (as you state), but would rather require oversight and verification of the need (based on their costs, not just their arguments) to impose this kind of pricing, instead of the PR snowjob we get from this industry that wants to throw a Money Party at consumers’ expense.”

        Why would I stop pointing out Free Press’ blatant hypocrisy? Seems like you’re awefully defensive of their indefensible flip flop that usage caps are a great alternative to managed networks but then turn around asking for a regulator ban on usage caps. Are you affiliated with them?

        “2) Ironically, when Time Warner Cable wanted to conduct their experiment, the heaviest users of them all — commercial customers — were exempted from the “experiment.” How nice. It also blew a hole right through their rhetoric about “heavy users” consuming more than their fair share. In fact, many residential customers were contemplating commercial accounts just to avoid the despised cap. BTW, residential or commercial, it travels across the same cable.”

        Are you deliberately being obtuse? First of all, commercial customers typically use the least bandwidth because they not using P2P all day, and most businesses have office restrictions in place against P2P usage. Second, they’ve PAID more to get an over provisioned network. Your argument that commercial customers who pay more shouldn’t get more generous caps is ludicrous. Moreover, these “commercial” accounts are available to consumers to buy, so it’s not like consumers are screwed. In fact, that’s the whole point of usage caps on consumer grade broadband accounts. It sends a message to heavy users that they’re using an inappropriate account, and that they need to move to a commercial grade account. Furthermore, Time Warner was prepared to cap overage charges and wave them the first month a customer crosses it so that they have ample warning to either change their behavior, or move to a commercial grade account.

        “3) Our readers here are well aware of the different cap levels, and I made it quite clear about AT&T’s which is “as low as” 20GB. Why is that tier so important? Because, as many of our readers in Beaumont have told us, AT&T DSL at 6Mbps is a pipe dream for many of them, lucky to receive just under 1Mbps service, yet being asked to pay for an account offering 6Mbps.”

        You are clearly full of it. AT&T will NOT sell you 6 Mbps service unless they’re absolutely sure that you can achieve a sinaling rate of 6 Mbps. In fact, they err on the side of caution and they’ll only charge you and offer you the lower speed service if you’re living too far away. I know this for a fact because I’ve had to escalate to management just to get them to allow me to order 3 Mbps service because I was living 13,000+ feet from the CO which is borderline. Since then, I’ve verified that do indeed get a 3 Mbps data sync rate on the modem interface.

        “Most of them fled AT&T the moment TWC ended their 40GB “experiment.” Nobody wants 1Mbps DSL service that actually costs $45+ a month once all of the taxes and fees are piled on.”

        Again, you’ve just told another blatant lie that 1 Mbps DSL costs $45. Anyone can verify that $35 gets you the 6 Mbps service with AT&T (http://www.att.com/gen/general?pid=6431). At this point, I see no point in arguing with a habitual liar.

        • “You know you have a real nasty habit of partial and selective quoting. It’s just like you quoting Digital Society as “pro commerce” but leaving out the “pro culture” part. What I said was that caps are inferior to intelligent network management, but without the network management in place you need the caps. It’s better to have an inferior solution than no solution.”

          Honestly, “pro-culture” is a throwaway generic turn of phrase that can mean anything. It’s like being “pro-society.” Who exactly is “anti-culture?” Now that you’ve “exposed” me for censoring out that turn of phrase, I’ll leave it to readers to determine if they feel they can now have an entirely new outlook on your original piece.

          Also, what is “intelligent network management.” That has to be defined carefully because one person’s QoS can be someone else’s throttled broadband experience. We may turn out to agree on the need for this as well, if you specifically define what this means. Does it mean reducing the bandwidth for specific Internet applications by up to 90+% of available speed, like what happens in Canada with BitTorrent during most of the day? Or does it mean intelligent switching that better and more efficiently handles traffic without impeding it?

          If you review the 400+ articles here, you will find we are generally opposed to all usage caps. However, even we acknowledge there are bad solutions and then there are war crimes — there is a matter of degree. Comcast’s 250GB cap is not anywhere near as egregious as Time Warner’s “experiment” was, and you’ll see that reflected in our coverage. We don’t think Comcast is right for their cap, but there are much bigger fish to fry, and we do so regularly.

          “while your buddies at the Free Press and EFF were touting the far more expensive and extreme Australian style caps.”

          I think the key word is “were,” at least from the FP perspective. And again, I suspect they were thinking that a metered business model would bring reasonable pricing for broadband, and instead the $1-5/GB “rape me” price showed up. Plus, it’s important to recognize nobody is proposing a true metered broadband approach. We are instead seeing consumption based tiers that include a paltry allowance that gradually increases. Then the overlimit penalty kicks in after that.

          I argued a few months ago about some of this when a few of the groups (not FP) were taking an “either/or” approach to Net Neutrality – either allow throttles or cap usage. Consumers reject both. They expect providers to continue investment in their networks and upgrade them to meet the needs of customers. Looking at the financial statements from the major providers out there, they can certainly afford to do so.

          “Now the Aussies have an excuse in that their peering transit costs to the US network is very expensive, so in a way I can understand why they do that though I wouldn’t want their service plans here unlike your friends at the EFF. Time Warner also has more expensive peering costs because they don’t have settlement free contracts like the other broadband providers, so that somewhat explains their motives.”

          Australia so loathes their broadband experience, the government has a national broadband plan to expand access and find ways to relieve the caps. They are going to have to apply some serious pressure to Telstra, however, because they are just fine with the way things are in Capped Land Down Under. Domestic providers are trying to use Australia’s experience in their propaganda efforts to convince Americans paltry caps and tiers are “fair” here as well.

          TWC’s motives are profit-oriented, not cost oriented. Their own financial reports show their broadband costs are DECLINING, not increasing, even with all of this traffic growth they complain about. You can’t make the claim they are facing higher costs when their own financial reports say the direct opposite.

          “Well, we’ll just have to agree to disagree that a regulatory ban is needed. I think it’s dangerous to start regulating and fixing prices, and I think consumers can make their own choices to accept or reject a business model.”

          There is no regulated or fixed pricing in Massa’s bill. If a provider can prove their costs without a cap are out of sight, they can switch to this cap and tier system. But in the absence of that evidence, and the revelation this really isn’t about “need” but rather “want,” having some authority tell them no is a far better consumer protection that this theoretical “the free market will fix it… eventually” mentality that empties consumers’ wallets.

          The honest truth is, for many consumers, rejecting a business model means no broadband service at all. That’s getting to the point where you tell someone if they don’t want power or phone service, just go without. If your group is really “pro culture,” you of all people should realize the Internet is rapidly moving beyond a nice thing to have and becoming as important as having a phone.

          “Why would I stop pointing out Free Press’ blatant hypocrisy? Seems like you’re awefully defensive of their indefensible flip flop that usage caps are a great alternative to managed networks but then turn around asking for a regulator ban on usage caps. Are you affiliated with them?”

          I don’t punish groups for changing their minds to represent a pro-consumer position. If they were to come out and say “cap away,” we’d be on their case too. If your group came out and said, “we oppose throttles and network management that interferes with a consumer’s broadband service and we also oppose usage caps,” we’d support you too, even if it represented a change in your position. If you support consumers, we want to support you.

          You can read more about the background of this site on the About Us page linked at the top. We are 100% consumer with no financial support from any industry or group. We are supported entirely by my wallet and the contributions from other individuals who read this site and believe in it.

          “Furthermore, Time Warner was prepared to cap overage charges and wave them the first month a customer crosses it so that they have ample warning to either change their behavior, or move to a commercial grade account.”

          More false information. Their “cap” on overage charges came during the second round after we had great success pointing out consumers could end up with thousands of dollars in broadband charges. They instead coughed up a maximum penalty of $100, which may make them generous compared to, say, a credit card company, but consumers here were completely unimpressed. In Canada, where there is still outrage about capped broadband, the providers there max-capped the overage fees to $20-25 (for now – but there is talk of increasing them or removing the cap later).

          When you are mugged, it doesn’t really placate someone to tell them you are going to limit the theft to just $100.

          Also, no TWC representative has ever said people could move to a commercial account. Consumers investigated that route themselves, because TWC does not cap commercial accounts, at least in the cities impacted by the “experiment.” The company actually did resist consumers inquiring, in some cases grilling them about why they wanted the service.

          At least Comcast informally tells their customers in some instances if they want to exceed 250GB, they can just buy another residential account. That’s why Comcast is not high on my target list.

          “You are clearly full of it. AT&T will NOT sell you 6 Mbps service unless they’re absolutely sure that you can achieve a sinaling rate of 6 Mbps. In fact, they err on the side of caution and they’ll only charge you and offer you the lower speed service if you’re living too far away. I know this for a fact because I’ve had to escalate to management just to get them to allow me to order 3 Mbps service because I was living 13,000+ feet from the CO which is borderline. Since then, I’ve verified that do indeed get a 3 Mbps data sync rate on the modem interface.”

          That’s not the experience of our readers, including one in Beaumont that was right in the heart of “experiment” country who tried to get the 6Mbps service and ended up with 1Mbps service. He had to escalate to a senior representative to downgrade (and finally exit) the service because he signed up with a promotion. As you should know, distance from the CO is not the only factor determining speed. Degraded lines that simply do not improve that much with re-engineering (or even switching pairs), can leave a customer with a lot less than what was marketed.

          You were pre-qualified for a speed rate based on their records showing your distance from the CO. Your experience was based on that fact, I’m sure. Had you lived 5,000 feet from the CO, promised 6Mbps service, and it turns out they couldn’t do it after everything was installed (or if the speed fell apart every time it rained/snowed), that is another matter.

          Here in Rochester, Frontier markets their service at the maximum speed and only pre-qualifies if you are within the maximum length from the CO. You don’t find out your actual speed until the installer turns up. They run a line test and then lock the modem at the best speed rate they can manage without a lot of resyncing. They sell you the service whether you get 768kbps or 10Mbps. They also will try and lock you into a two year price agreement with a steep cancellation penalty. I went with Frontier here and they managed 3.1Mbps. That was too slow for me, particularly when it turned out after you added up the taxes and fees piled on top of the DSL service price, it actually cost more than Road Runner. I escaped within the 30 day trial window.

          AT&T’s own terms and conditions agree with most DSL providers: “Speed claim(s) represent maximum downstream and/or upstream speed capabilities which may vary and are not guaranteed.”

          So I’m uncertain why you believe AT&T will not even sell you the service if they can’t guarantee the speed, when the company exempts itself from all such guarantees.

          “Again, you’ve just told another blatant lie that 1 Mbps DSL costs $45. Anyone can verify that $35 gets you the 6 Mbps service with AT&T (http://www.att.com/gen/general?pid=6431). At this point, I see no point in arguing with a habitual liar.”

          You did your own selective quoting by ignoring the fact that the service’s price is not the only part of the bill. When you add on taxes and fees, which vary from state to state, the price becomes higher. Call AT&T and ask them what the true “out the door” price is for DSL, including taxes, mandated surcharges and fees, and the pesky modem charge, which might be free if you find the right promo, or definitely not free if you don’t.

          Habitual liar? Sounds like an ungraceful way to exit the debate, but whatever works for you.

          • George Ou says:

            “Also, what is “intelligent network management.” That has to be defined carefully because one person’s QoS can be someone else’s throttled broadband experience. We may turn out to agree on the need for this as well, if you specifically define what this means. Does it mean reducing the bandwidth for specific Internet applications by up to 90+% of available speed, like what happens in Canada with BitTorrent during most of the day? Or does it mean intelligent switching that better and more efficiently handles traffic without impeding it?”

            Check the white paper I wrote. I talked about intelligent prioritization based on best practice where the ISP sets defaults based on what the consumer would have wanted anyways. The user’s own priority labels would be honored first so long as they’re within their priority budgets. This is how commercial grade network QoS service level contracts work, and you get budges on various priorities so that you can’t just abuse the system and label 100% of your packets as a high priority packet. Vuze BitTorrent client for example allows users to label their BitTorrent packets at any priority they like, which can be abused if there were no budget in place.

            “Also, no TWC representative has ever said people could move to a commercial account. Consumers investigated that route themselves, because TWC does not cap commercial accounts, at least in the cities impacted by the “experiment.” The company actually did resist consumers inquiring, in some cases grilling them about why they wanted the service.”

            Yikes, so TWC never mentioning that option means that consumers were barred from excercising it? How in the world would they know who was or who wasn’t a business customer? Your claims are pretty absurd.

            “That’s not the experience of our readers, including one in Beaumont that was right in the heart of “experiment” country who tried to get the 6Mbps service and ended up with 1Mbps service. He had to escalate to a senior representative to downgrade (and finally exit) the service because he signed up with a promotion.”

            You can’t used the worst possible anomaly as an example of the general case, and to do so is dishonest. In fact, a UK Ofcom study showed that American consumers got much closer speeds to their advertised PEAKS than the UK or Japan. Also, it’s not possible to run a large business without mistakes. Clearly, it’s possible for a small number of customers to have defective lines and when that happens, they should ask the phone company to fix their line quality or drop the price to what they can support, and that’s precisely what happened here. You can’t say that AT&T systematically charges $45 (even if you include taxes) for 1 Mbps service as a general policy or represented as something that’s typical.

            • “I talked about intelligent prioritization based on best practice where the ISP sets defaults based on what the consumer would have wanted anyways. The user’s own priority labels would be honored first so long as they’re within their priority budgets.”

              I understand QoS on the router side, as well as with the client software BitTorrent uses. Where my problem comes in is the down and dirty details of how the ISP determines what “the budget” is. Right now, the control valve is really the speed tier you choose to pay for on your broadband account. So the “budget” is the maximum speed marketed, minus the real world conditions on the last mile (ie. how many other users in the neighborhood are using the network if it’s a cable broadband service) and the connection the ISP itself relies on to send traffic out of its network.

              In Canada, Bell’s “budget” (which currently applies to traffic it identifies as BitTorrent), is less than 10% of the marketed speed you signed up for during most hours of the daytime. All other traffic, as far as we know right now, is unimpeded (ie. no budget). Is 10% a fair budget? I personally don’t think so, and I have a problem with an ISP singling out one specific kind of traffic for this kind of treatment.

              Do I think BitTorrent traffic can be a challenge? Of course, when someone adjusts their settings to max out on all available upload/download speed and then leaves the thing running 24/7. It would bug me as a shared user on a home network because all of my other activity would run at a crawl.

              But BitTorrent’s “problems” can also be managed with a better implementation of the ‘protocol’ and better education of its users. Frankly, I personally believe the glory days for BitTorrent are already over, as many of its users confront endless viruses/trojans, fake files, and the lengthy wait common with a lot of the bigger things people try and grab there. Lots of people who used to mess with BitTorrent two years ago are now using commercial newsgroup accounts or one of the file storage services to capture dubiously “legal” content. And Hulu, et al., deliver a lot of TV shows people used to use BitTorrent to grab.

              A lot of ISPs don’t even use the Torrent argument anymore — they are focusing on online video instead.

              I am just not confident an ISP that also has a vested interest in content should be the arbiter of bandwidth budgets.

              “Yikes, so TWC never mentioning that option means that consumers were barred from excercising it? How in the world would they know who was or who wasn’t a business customer? Your claims are pretty absurd.”

              Again, your comment is somewhat understandable considering you don’t live in one of the TWC experiment cities. I do. These reports came from people locally on the ground. The media learned business accounts were excluded from the trial and it became a point of contention with some town supervisors who wondered not only why, but also guessed at one point that might change, putting Rochester at a competitive disadvantage with nearby FiOS cities, where competition was more robust.

              Some who called TWC for Business Class service pricing were told they had to prove they were running a company to purchase the service. That’s not terribly unusual, actually. When I signed up for business phone service locally, I had to produce a D/B/A.

              Why do this? Because you could purchase a cheaper Business Class account from RR for unlimited service than you could on the residential side, with a $100 maximum overlimit penalty applied. That’s a loophole they’d readily close, for the same financial reasons they won’t install a residential account at an address located in a strip mall.

              “You can’t used the worst possible anomaly as an example of the general case, and to do so is dishonest.”

              This was hardly the only example. There is a reason why cable competes so effectively against DSL. Unless you are located very close to the central switching office or remote, you are not going to get the marketed speeds unless a company sells those speeds very conservatively. I don’t see that happening too often.

              What I can report here is not the way things “should be” based on AT&T’s own marketing. I can report what readers share with me about their real world experiences. Considering AT&T specifically states, up front, they do not guarantee speeds, calling me dishonest when you make the claim AT&T “will NOT sell you 6 Mbps service unless they’re absolutely sure that you can achieve a sinaling rate of 6 Mbps” is a classic case of pot to kettle.

              Again, I don’t tell my readers they have to believe everything I say. They can go out and investigate it themselves, check out all of the various links that get posted here, listen to the people who share their own real world experiences, as well as those that defend the broadband industry, and decide for themselves what’s true and what isn’t.

    • Papa Midnight says:

      I suppose I, as a video game journalist, am unreasonable then because I can break 150GB in under a week. Actually, more accurately, I can do that in 3 days flat.

      • George Ou says:

        “I suppose I, as a video game journalist, am unreasonable then because I can break 150GB in under a week. Actually, more accurately, I can do that in 3 days flat.”

        If you were truly video game journalist, then you would understand that video games are very low bandwidth applications. In fact, I just did the math and it works out to 32 GB per month if you were to game nonstop 24×7.

        • Papa Midnight says:

          I guess you don’t understand the fact that we have to transport media including images and videos. The last Left 4 Dead 2 trailer I received from VALVe was over 1GB. You also have to count in cost to bandwidth of screen shots, updates (patches), etc.; Batman: Arkham Asylum demo: a little over 2GB. That doesn’t even take into account the process of downloading, re-encoding to make it web user friendly as not everyone appreciates a 27megabit video stream at 1280×720, and shipping it off.

          I’ve been given titles from Electronic Arts totaling over 6GB per title; Rockstar’s Grand Theft Auto IV was nearly 15GB. Capcom’s Street Fighter 4 was a good 4.5-5GB.

          Now if you want to ask anyone about bandwidth usage, ask a World of Warcraft player. Their patches have been known to hit between 1 and 3 GB. The fact that World of Warcraft uses BitTorrent as a carrier for patches in order for Blizzard to cut down on their own bandwidth cost further increases this. A new install for World of Warcraft might well require over 10GB of bandwidth.

          So please, don’t try to sell me that it would only cost 32 GB of bandwidth to game daily for 24 hours a day for a 31 day period. I can break that rather easily. 32GB might have been the bandwidth cost back in the day for gaming for something like Counter-Strike but not today.

          Not everyone’s cost of bandwidth are the same, nor is everyone’s requirements. For others who choose to engage in massive amounts of web video usage such as Hulu, YouTube, or other non-discrepant forms of media outlets (especially college students), their bandwidth requirements can reach over a Terabyte.

          Now then, if you’d like to get together and compare packet logs after a 31 day period, I’d be happy to oblige. But the fact of the matter is that someone in my line of work can break that bandwidth rather easily. The fact that persons like me work from home more than echos that. But don’t take my word for it, the forums of Broadband Reports, previous articles of Wired and StopTheCap, and the blog of u235sentinel (who happens to be lucky enough to live in Utah) [ http://comcastissue.blogspot.com ] more than prove that some people actually like to use the bandwidth they pay for monthly.

          • George ou says:

            I guess you don’t understand the fact that we have to transport media including images and videos. The last Left 4 Dead 2 trailer I received from VALVe was over 1GB. You also have to count in cost to bandwidth of screen shots, updates (patches), etc. Batman: Arkham Asylum demo: a little over 2GB. That doesn’t even take into account the process of downloading, re-encoding to make it web user friendly as not everyone appreciates a 27megabit video stream at 1280×720, and shipping it off.

            And how often do you download trailers or trials per month? If you downloaded one brand new game a day at 2GB per game (which is completely unrelistic since most gamers stick to one game for quite some time, that’s 60 GB per month, well under 150 GB. Moreover, 720P video on the web is typically about 2-2.5 Mbps, it’s never 27 Mbps since no one can afford the server capacity, which is always tightly metered by the way.

            “Now if you want to ask anyone about bandwidth usage, ask a World of Warcraft player. Their patches have been known to hit between 1 and 3 GB. The fact that World of Warcraft uses BitTorrent as a carrier for patches in order for Blizzard to cut down on their own bandwidth cost further increases this. A new install for World of Warcraft might well require over 10GB of bandwidth.”

            And how often does WOW patch their game per month? Once, twice? That works out to 6 GB if there were two patches a month (which is unrealistic), and another 10 GB one-time download.

            “So please, don’t try to sell me that it would only cost 32 GB of bandwidth to game daily for 24 hours a day for a 31 day period. I can break that rather easily. 32GB might have been the bandwidth cost back in the day for gaming for something like Counter-Strike but not today.”

            Actually, I’m not even talking about Counter-Strike. Counter-strike would take about half that bandwidth actually. Modern games take about 100 Kbps (both directions added together), and there’s a good reason for that design. Server capacity is VERY expensive and buying just 3 Mbps of dedicated server capacity could cost you $50 to $100 per month. With a 3 Mbps server, that’s barely enough for 32 players. If you had a 10 Mbps server, you hope to be able to serve 100 players. It is for that reason that online gaming bandwidth is designed to take no more than 100 Kbps both directions.

            • Papa Midnight says:

              2.5MBPS? 720p?! That might work well for 480p but unless you’re up for what a friend of mine would refer to as a “pixelfest”, 2.5MBPS is not the way to go.

              Let’s take the smallest trailer I could find on short notice and use it for an example.

              Game TrailersLeft 4 Dead 2l4d2_e3_teaser_v37_st11_steam.wmv
              Format : Windows Media
              File size : 118 MiB
              Duration : 1mn 16s
              Overall bit rate mode : Variable
              Overall bit rate : 13.0 Mbps
              Maximum Overall bit rate : 18.5 Mbps
              Encoded date : UTC 2009-05-30 00:58:06.482

              Considering how often media is released by publishers and how large it is, I’d say I’d be downloading quite a large amount in a single day.

              Let’s hop on over to the Electronic Arts press extranet for an example:
              http://ea.gamespress.com/artwork/2009/08/na-1-20090826164550/0e6dd315a0d0e3a8/cc4pclogorgb.jpg <– Warning, 1.7MB. Thankfully, it's just a logo. That's actually one of the smaller images. Hope you don't go over your Cap.

              Let's try a screenshot of the upcoming Army of Two: The 40th Day. It's still a jpg so it can't be THAT big right? http://ea.gamespress.com/artwork/2009/08/na-1-20090825105552/0e6dd315a0d0e3a8/jonah_leads.jpg <— Enjoy a solid 7.7MB for a single screenshot. Now bundle that into packs of 100 images. 770MB, discounting for variance in image size. And that's just for one single title.

              Moving on to SCEA, I'd love to provide you with a link to the screenshots, but the area is password protected so I cannot. Just for reference though, the pictures of the new PlayStation 3 Slim (120GB) photos come packaged in a zip file totaling a nice 61.7MB. But hey, there's no way in hell this can all somehow eventually add up to 150GB in a week now is there? Remember that I've only posted images, and the video I posted the information for above is one of the SMALLER trailers. Now do the math and you'll see that 150GB can easily be exceeded in a weeks time if not less.

            • Ron Dafoe says:

              Let’s actually see what someone might do, in a household that has 2 children, 2 computers and an xbox 360:

              Wow – playing and updates
              Other online games for PC
              XBox 360 – game updates, system updates, demos
              Windows Updates for 2 computers
              AntiVirus Updates for 2 computers
              Misc software updates – Office, Adobe, Kodak software, Logitech, etc – for 2 computers
              Video Driver are released on a monthly basis and they are BIG
              Movie streaming from Netflix to the XBox 360
              Youtube video watching
              Internet music streaming
              Web Browsing
              E-mail, with pictures attached
              Homework
              Connecting to the office through VPN

              It all adds up in the end.

              Now, why would you limit data consuption rather than as the network is congested, you load balance your network?

              If you know that all this is going on, why are you not upgrading to better technology to better manage your network and to increase your billing to customers (higher speeds of service)?

              This is not happing in many parts of the country. What is happening is less spent on the network, while increase in usage as more houses get built. Instead of investing in network management and network upgrades, they are investing in limiting data consumption.

              The above examples are not me. I have 3 children. I have more computers. I have been at football practive starting the 1st of this month and I have used 68Gbs of data as of now. I do not allow P2P and have it blocked through OpenDNS. I know I may have more traffic than some, but if I can get that much data without trying, then I think all of TWs data about consumption is suspicious.

    • Stew says:

      Mr Ou,
      You wrote “They type of caps we’re mainly seeing is $43/month for 15 Mbps service with a 250 GB cap, or a $35 service for 6 Mbps with 150 GB cap”. That was certainly not the case in the beaumont area. My rr service cost 55/month with a 20gb cap. Phillip has a copy of the letter ATT sends out via fedex after signing up, with the speed and limits, on the site here.
      Your comment “At this point, I see no point in arguing with a habitual liar.” totally out of line. After reading most of the posts yoursy would be the more suspect ones.
      I dropped my cable tv, intenet service, and phone with tw ( as well as selling off my little bit of stocks) when they started the caps. I switched to att. When the sent the cap and tier letter out to me, I called them to drop my 2 phone lines, dsl service, dish network (part of the package deal) and my yellow pages ads.They relented on the caps. If they reinsitute them in my case I will drop them all as a package and att can fight with dish over a broken contract. BTW I have elite service and can’t seem to get over 4mb speeds. I doubt I exceed the cap limits normally but have not yet been built extra as of yet.

  5. George Ou says:

    Strident opposition to Net Neutrality? I guess you’d have to lump Larry Lessig and Sir Tim Berners-Lee in to the same camp, because they opposed regulatory bans on tiered pricing for better service as well.

    Here was my position on Net Neutrality, and it was linked to by people on both sides of the issue as a good article.
    http://blogs.zdnet.com/Ou/?p=512

  6. Michael Chaney says:

    “Now in no way am I suggesting that American broadband is better than Japan because the speed and absolute usage cap size Japanese ISPs offer is nice, but we need to understand that the usage caps in proportion to the advertised bandwidth is more usable in the United States.” -Ou

    You’re completely contradicting yourself. If I had a 768 kbps speed with a 20 GB cap, I’d have a max possible volume of ~250 GB and a “duty cycle” of ~8%. In your example, “…if a Japanese IPS has usage cap of 900 GB, and .. a maximum transmissible data volume of 32,400 GB per month, then the duty cycle is 2.78%”

    So by your logic since 8% is more than 2.78%, the 8% is a better deal. WRONG! A dollar is 100 times more than a penny, but that doesn’t mean getting Ben Franklin over a penny is better than getting $1 Million over a $100,000 just because the latter is only a 10x improvement. You can’t use math tricks to reduce the scale down to a simple ratio for comparison. How on Earth is this “more usable” information?

  7. Michael Turk says:

    Stop trying to save your cable business with limiting your internet service.

    This is another fallacy that seems to be a popular refrain from the “regulate the net” crowd. Per capita and household TV consumption is up, ratings on cable shows are up, most cable content outside the basic tier isn’t available anywhere else. And while cable customers aren’t growing exponentially, they aren’t declining either. Most experts agree the flat growth of cable revenue is due to a saturated maket, not a loss of customers. There simply aren’t “more” customers to attract. So what are we trying to save exactly?

    The cable industry is going through a digital migration of content from analog to digital to free more space for – wait for it – broadband and interactive services. In addition, multi-channel video providers are also moving to solutions like switched digital TV, FTTH, and IPTV to make more space available for broadband (not less).

    Cable largely created the broadband market because it wasn’t regulated, yet the claim is we’re somehow threatened by the Internet. Add to that the fact that the industry has moved aggressively over the last ten years to upgrade our plant to deliver broadband, developed DOCSIS 3.0 to increase speeds, and as George mentioned, has been increasing customer speed at no charge, and I am truly at a loss for what you see that indicates we’re on the verge of extinction.

    • Ron Dafoe says:

      It is not a fallacy if in Time Warners own documents and conference calls they specifically raise the concern that internet video is an issue that the cable end of their business has to deal with.

      “TWC faces competition from a range of other competitors, including, increasingly, companies that deliver content to consumers over the Internet, often without charging a fee for access to the content. This trend
      could negatively impact customer demand for TWC’s video services, especially premium and On-Demand services.”

      Aslo their TV Everywhere initiative where you have to pay for a cable or satellite station to get access to it over the net?

      • Michael Turk says:

        Actually, such statements are typically included in any company’s financial statements. There are even special names for them – disclosure and safe harbor statements. Any publicly traded company is required to state things that “could” be a threat to the business. Any solicitation for investment made without such acknowledgment could be considered fraudulent if investors who lost money discovered that the company was aware of such things and didn’t warn them. That’s simply business practice.

        As an example, look at the financial statement for a company like EA Games and you’ll see statements that discuss the nature of MMORPGs and the fact that revenue from them could be adversely impacted by subscriber loss to new and better MMORPGs. That hardly indicates impending doom to their MMORPG business, it simply states the obvious fact that not every business model is a permanent source of stable income.

        As I mentioned, most cable content isn’t available without subscription. That’s the difference between the newspaper model, the broadcast model, and cable. TV Everywhere is an effort to provide subscribers with the content they have subscribed to in a way that allows them to view it in other contexts. At the same time, it protects the content of our programmers, not our business.

        Since cable programmers (unlike broadcasters) make much of their revenue off of subscriber fees and not just advertising, they are concerned about making their content available online. Working with those programmers (and with other multi-channel service providers) cable is trying to guarantee access to that programming to paying customers while protecting their intellectual property and their income model.

        That hardly indicates an industry in need of “saving”.

        • Ron Dafoe says:

          It means that it is a concern and all of their business decision have taken this concern in account.

        • “There are even special names for them – disclosure and safe harbor statements. Any publicly traded company is required to state things that “could” be a threat to the business.”

          Nice try, but no cookie. I am well aware of safe harbor and disclosure provisions — the “coulda, woulda, shoulda” generalities that are a part of every financial report.

          What’s being discussed here are not those kinds of statements. They are direct declarations by company officials either during conference calls or in financial reports to explain the reasoning for the numbers they report. The last annual report from TWC does not throw the fact that their broadband costs are declining in a disclosure statement. It’s in the heart of the report to explain to investors why their costs have declined.

          Glenn Britt doesn’t say there is no need for upgrades because of an SEC regulation — it was said in answer to a reporter’s question about the competitive position of a cable company dragging its feet on upgrades yet still wants to charge consumers more money for the same broadband account they have today.

          “Since cable programmers (unlike broadcasters) make much of their revenue off of subscriber fees and not just advertising, they are concerned about making their content available online. Working with those programmers (and with other multi-channel service providers) cable is trying to guarantee access to that programming to paying customers while protecting their intellectual property and their income model.”

          And nobody here considers this the takeaway issue. The issue here is these same providers are claiming online video is saturating their broadband networks and they need to impose things like consumption based billing to deal with the flood of video because it’s such an enormous problem.

          But not enormous enough for them to build their own online video network that will dwarf Hulu.

          The reason for bandwidth caps to limit consumption is to protect their video business model and also find new revenue by overcharging consumers for their broadband service. Worried about someone disconnecting cable TV and watching lots of video on their broadband service? Slap a cap or throw them into a consumption tier and make them pay… a lot… for trying.

    • Michael Chaney says:

      “Cable largely created the broadband market because it wasn’t regulated…”

      Cable provided the network, but they didn’t create the market. Content providers created the market, and that market has grown and flourished because, up until now, Net Neutrality principles have been observed by ISPs and they kept their hands out of the content cookie jar. Even though the market was unregulated, all the players understood that this new Internet frontier had to be open and free of hindrance if it was going to grow. But now baby is all grown up, and these ISPs now see un-monetized traffic as wasting potential revenue.

      And let’s face it…..proprietary cable television is a dying technology. IPTV is the future, and as our consumer data connections to the world get faster, more of our entertainment will be delivered through that channel. In the end, entertainment producers will be serving up content directly to me (free, subscription, ad-supported, whatever) over my data connection, and cable TV will be nothing more than a story we tell grandkids.

    • Ron Dafoe says:

      “most cable content outside the basic tier isn’t available anywhere else”

      I am not sure I know what you mean by this? Are you saying that alot of cable content is not available outside of the cable medium?

      Please give me an example so I know precisely what your talking about, as when I go and look, most series, including premium channel series and cable channel series are available on DVD not too long after the season is done.

      Even non-series shows seem to get released on DVD.

    • “Most experts agree the flat growth of cable revenue is due to a saturated maket, not a loss of customers.”

      Another explanation, the one TWC was giving conference call participants during the last quarter’s call, was that premium channel disconnects were way up, along with a decline in Video On Demand revenue, and an increase even in basic disconnects, which was offset by rate increases (at rates much higher than inflation).

      I agree that we have neared saturation in the cable television market at today’s price points. In fact, the more the price increases, the more people make the ultimate decision it’s no longer worth it and dump the whole thing. A lot of those people, particularly younger ones, keep the broadband service though. With a proliferation of online video, why pay for cable TV? Uh oh.

      I’d say if cable offered a-la-carte options, it would be a dilemma for some niche cable networks, but to borrow from my free market friends, “let the market decide.” Instead, we have the “socialism” of people paying for everything whether they watch it or not.

      More important, if someone could obtain local channels and three or four basic cable networks of their choice for less than $20 a month, I’d bet there would be plenty of takers. But of course the industry fears there would be even more downgraders, cutting into profits.

      “The cable industry is going through a digital migration of content from analog to digital to free more space for – wait for it – broadband and interactive services. In addition, multi-channel video providers are also moving to solutions like switched digital TV, FTTH, and IPTV to make more space available for broadband (not less).”

      And when you dig into this claim, you discover it’s not really about broadband, it’s about avoiding the expensive upgrades from system rebuilds to accommodate the transition to digital HDTV. The great migration to digital tiers right now by some cable companies (notably Comcast) is to free up space for HD cable networks. Yes, they are also making room for some more broadband, but the vast majority of that space is for television signals. TWC is using “switched digital video” to make due with their capacity by delivering digital television channels only when someone in the neighborhood wants to watch them, freeing up space on the theory that not everyone in an area will watch every digital signal at the same time.

      “Cable largely created the broadband market because it wasn’t regulated, yet the claim is we’re somehow threatened by the Internet. Add to that the fact that the industry has moved aggressively over the last ten years to upgrade our plant to deliver broadband, developed DOCSIS 3.0 to increase speeds, and as George mentioned, has been increasing customer speed at no charge, and I am truly at a loss for what you see that indicates we’re on the verge of extinction.”

      Nice point of view, from the industry perspective anyway. As Glenn Britt, CEO of Time Warner Cable noted, TWC was one of many companies skeptical about broadband over cable and his predecessors were pushed into it when TCI started experimenting with their @Home service. I was around when the broadband service experimentation started. The enthusiasm for it in the beginning had only a little to do with the regulatory issues (although it was a selling point with management) — it was more skepticism whether people would want the product or if it would be a tech-nichey offering. The trade press would later echo the fact it was deregulated and the price point was set high (averaging $40) with dramatically dropping costs meant it was a cash cow. It has remained so profitable, even the cable industry with its love of annual rate increases has left the price and model largely alone for nearly a decade… until now.

      And while some cable players are aggressive about DOCSIS 3 deployment, others, especially TWC, are not. It is still being poo-poohed as late as this spring, with statements from company officials saying they felt there was no real need because their networks had enough capacity and there was no clamoring for higher speeds. Only in NYC where FiOS competition threatened that position (and Cablevision was aggressively putting them to shame in their home service areas), has DOCSIS 3 deployment been underway.

      There has been no increase in upload speed in Rochester (without an add-on product) since service inception in 1998 — it’s still 384kbps. TWC has increased speed when a competitor has either done so, or threatens to do so. Now that the speed race is over and DSL lost, there have been no further changes in speed in this market.

  8. Michael Turk says:

    Your argument with FP historically comes as a result of your opposition to their belief in Net Neutrality. In a world where a true metered model, with usage allowances sold for closer to what it really costs providers — 10c per gigabyte or less, and would guarantee the user with a non-throttled experience, I can see why a group might advocate that over throttles and premium tiers of service for content producers.

    Your assessment of costs at this moment in time is not an accurate assessment of costs OVER time. To quote a 10 cent per GB number reflects a fundamental misunderstanding of the business model of ISPs.

    The last estimate that I saw of the cost to hook up a single Verizon FiOS customer was $3,000 to $5,000. Let’s assume your 10 cent cost per GB and a GB cap of 250 GB per month. At that rate ($25 per month), it would take Verizon roughly 10-17 years to recover the cost of that install. Verizon is sinking a tremendous amount of cost into the network and it will take years to recover. That assumes no additional costs for upkeep, maintenance, customer service, etc.

    At the end of that cycle, Verizon will have connected an awful lot of people, and may actually be recovering a substantial chunk of the customer billing in the form of profit. Until then, however, they’re operating at a loss on the initial investment.

    Granted, as more customers come online, and the incremental cost to acquire them comes down, there is a sliding scale. However, the initial investment is often recovered over a much, much longer period of time.

    The numbers you quote about cable cost per GB, as an example, don’t reflect the $135 billion over ten years that was invested to get to that point.

    Looking at what it costs to provide service now, versus what it cost to build the network that is used to provide that service, is tremendously misleading and displays either a blatant attempt to misrepresent or a lack of understanding of the business.

    • Michael Chaney says:

      Do you have actual investment figures, dates and ammortization schedules? I really have been wanting to see the hard numbers of how that factors into their COGS. I think all of us here have been trying to reach an honest fact-based figure for actual cost-per-GB for various ISPs.

  9. Brett Glass says:

    Phillip, you need not ever worry about job security because your rhetorical stars are in perfect alignment with Google. Which, I am sure, is paying you to promote its corporate agenda — just as it is paying your buddies at Free Press, Public Knowledge, and New America Foundation to do so.

    • ROFL! Google has not hired me or paid me to advance any agenda or anything of the sort. I pay 95% of the costs to run this website out of my own pocket, and the other 5% comes from Paypal donations. I do not earn a salary from doing this at all.

      Free Press, BTW, does not accept any industry money either.

      Seriously, at least have SOME evidence to back this stuff up.

      • Papa Midnight says:

        Come now, Mr. Dampier. You of all people should be aware from what you post on that actual evidence is irrelevant in this world.

        Sorry to engage in sarcastic wit at your slight expense.

  10. PROUD AMERICAN says:

    Michael Turk your specious arguments reek of the bias infused by someone whose agenda and paycheck is sourced solely from the cable industries efforts to screw the consumer, protect monopolies and salvage dying VOD revenue streams. Pathetic and transparent. Your downfall is believing that rhetoric, fear mongering and spin will somehow fool the average broadband customer….a significant miscalculation. The beautiful and ironic aspect of all this is that this very medium provides the vehicle to disseminate actual facts, data, truth and the knowledge that intelligent free thinking individuals can use to protect their rights. No amount of BS from you and the cable industry can hide the truth from the consumer.

  11. Jeremy says:

    I just have to say, the industry reps. here are not doing themselves any favors. Pick and choose items to attack, personal insults, and then avoid solid facts about the impact on consumers and the internet in general. These comments have just brought me to the realization that I need to contact my representatives again stating my support of this sites values, just more strongly. It seems the reps. here are ok with selling out their neighbors, friends and every other American for the quick buck from the big providers. This earns them no trust at all from me.

  12. Smith6612 says:

    May I just mention a few things:

    1: Yes, a lot of video online today that is in “720p” that streams at 3000kbps bitrate (which does look like crap in full screen). I can’t expect people to boost the bitrate to something such as 7000kbps for 720p or even 6000kbps video with 256kbps MP3 audio which is what I export my 720p files at with the H.264 codec inside of the AVI container, and of course without having tons of servers or servers with direct to fiber connectivity, I don’t see te bitrate increasing anytime soon. Just take a look at YouTube. At night their HD streaming servers become painful, and it is not due to my DSL lines slowing down at all (one 1Mbps/384kbps line, and one 3Mbps/384kbps on different providers). Google is in fact working to boost server capacity and fix up their network which is taking a beating from YouTube. But obviously though, if metered bandwidth does come into play, people will go back to sending those pathetic 8MB 5 minute long videos over e-mail again, or at least hurt some more internet driven companies.

    2: Being the avid gamer that I am, I do expect consistency in speeds and latency on my DSL lines, but of course I want the lines to be unthrottled and uncapped, and of course supply me with a few megabits at the very minimum of download and upload. I use VALVe Software’s gaming distribution platform Steam (which is what I’m posting from in-game). Now, I do buy a lot of my games off of Steam, and other sites such as Direct2Drive. I don’t download the games again often, but due to the nature of one of the games I have installed called Garry’s Mod (which is one of the most insecure sandbox games ever due to how easy it is to create lua viruses), I have to wind up re-installing the mod and sometimes the 8 games that fuel the mod should an add-on break the mod completely or if I am troubleshooting something. Now when this happens, I have to wind up downloading Garry’s Mod from Steam which is roughly 60MB big, and if I need to reinstall any of my Source games I’ll be at least downloading a good 15GB of data. Add on the addons for Garry’s Mod which I download via TortoiseSVN, and you’re looking at 20GB for a full reinstall of everything GMod uses and for GMod itself. Should I need to reinstall Steam entirely such as if I reformat the hard drive Steam runs off of, you’re looking at well over 70GB of games that need to be downloaded, all of which I do not own physical media of. Being a gamer unfortunately is an expensive hobby.

    3: Modern games can use way above 100kbps of data. Some of my games such as Team Fortress 2 and Garry’s Mod can very easilly break 350kbps of downstream data, even on a 10 player server, given I have bumped up my refresh and tick rates in the game which I always do, and have turned off Interpolation which I do on servers with 122ms and lower latency, as well as tell the server to send data about everything going on in the server (which is needed a lot in Garry’s Mod, and is helpful in Team Fortress 2). Not to mention, I host game servers from time to time to spend some time with Steam friends and maybe put up a good round or two of Left 4 Dead (another bandwidth whoring game if the settings are up high), and I’ll be uploading and downloading quite a bit of data in a short amount of time when I’m looking at all of this. Now a days, the Xbox 360 is starting to use people’s bandwidth at their home to host matches for Xbox LIVE players, mainly on those games that allow it (there are quite a few around). As someone mentioned above, a bunch of gaming software, especially Blizzard’s World of Warcraft which has patches which are typically 1-3GB big, and the default updater uses peer to peer software to transfer updates to people.

    4: CNN I believe pulled a stunt on users a few months ago asking people to install a plugin which supposably ‘enhanced” their streaming experience while streaming videos from their website. Turns out, this plugin was in fact a peer to peer plugin which used a person’s upload to distribute the content, rather than using CNN’s Content Delivery Network to deliver data to users, or even then Akamai/Limelight (Steam uses limelight). I’ve seen many sneaky attempts as such take place with companies not wanting to pay for distributing content which they have or were already doing in the first place, and thus relying on residential connections to relay the content to users.

    5: 1080p Netflix streaming which requires a 10Mbps+ cable/fiber connection to run. This should be common sence to tell how much data it would use for a typical movie. Just wait until 2k resolution movies start being streamed to a home at 20Mbps. Movie theaters these days are already experimenting with using the Internet as I’m sure some of you might know to stream 20Mbps 2k resolution movies in replacement of film.

    So yeah, I’m going back to my game so I will complete this post later on or in another reply.

    • George Ou says:

      Smith6612, I do play TF2, and I’m talking about the client end and not the server end. Server end obviously takes a lot more bandwidth, and that’s why they limit it to around 100 Kbps average (yes I know it bursts well above that at times but I’m talking average which is what affects your overall usage).

      Everything you talked about pretty much fits into a 150 GB budget. Speaking of Google, they’re hoping more people don’t jump on the 2 Mbps 720P train, at least not all at once because they’re getting murdered by the bandwidth costs. And yes, dedicated server bandwidth is very expensive and always metered because you’re not sharing it with 20 other people like you do with consumer broadband.

      With consumer broadband, it’s cheap because it’s shared. And because it’s shared, there’s no way they can support a 100% or even 50% average duty cycle. At most, they can support an average of 1/20th duty cycle if they’re doing 20-1 statistical multiplexing. Now is it evil to sell you a 1/20th shared connection but at 1/20th of the price? I don’t think so if you understand that you’re getting the bandwidth for 1/20 or even 1/40th of the price of a dedicated circuit. Now I know the typical reaction is “I paid for 6 Mbps and dammit I better get 6 Mbps guaranteed 24×7″. Well, that’s not what the broadband provider sold you when they told you it was “up to” 6 Mbps. Now would I like to see averages advertised, yes, but it’s just silly to expect a dedicated circuit that allows you to use it 24×7 at full throttle and it’s silly to expect zero usage caps. 150 GB for a 6 Mbps connection is more than reasonable, and it fills every requirement you mentioned, except for the nonexistent 10 Mbps Netflix service you speak of.

      Now if you want to chat over this in game, let me know what server you play on and we’ll shoot it out.

      • Smith6612 says:

        I’m in Garry’s Mod at the moment. What I was talking about above is in fact the bandwidth usage I typically run my clients at. Here are the console commands I use in my Source games. TF2 will use 300kbps of bandwidth on a busy 32 player server, given the server has a high tick rate (many of the ones I play on do).

        rate 50000
        cl_updaterate 100
        cl_cmdrate 100
        cl_interp 0.01
        cl_interp_all 1
        cl_interp_ratio 1
        cl_interp_threadtickmode 1

        I use the same settings in Garry’s Mod and it can sit around 400kbps when a lot of props are moving around, regardless of player count. Typically past 400kbps the server’s CPU is too busy to kick out any more data and my data rate falls.

        Otherwise I do understand fully the whole concept of the shared pipe and how a dedicated line costs way more than what my DSL lines cost, and that my provider can’t give me my bandwidth all of the time. I’ve had cases where edge router issues with my Verizon line and Frontier having a hard time bringing in more bandwidth into the area that have caused me to have high latency and slow speeds, both of which I didn’t mind for a few days as I can tolerate the lag and deal with those slower speeds. Both companies have always been speedy about fixing up these issues when they do prop up, many times without me having to let them know. That is really all I ask for my lines when I was talking about consistency and reliability, and it is also why I am with DSL rather than cable. Much smoother experience despite the poor routing at times especially to local servers. For Google wanting to lower HD usage on YouTube, I can easily see why with the nearly nightly YouTube slowdown that causes me to have to play with the site to get a less busy cache server.

      • Ron Dafoe says:

        I used 4.5Gb last night streaming 2 episiodes of The Hunger from netflix to my xbox 360. This was NOT in HD. 2 episodes is roughly 2 hours.

      • Oscar@SA says:

        150GB.. my family blows through that in less than a week… no cap is reasonable.. period… If you were here I would beat you down with the astroturf you are sitting on.. LMAO :)

      • Michael Chaney says:

        “Well, that’s not what the broadband provider sold you when they told you it was “up to” 6 Mbps”

        Maybe this isn’t what they sold us, but it’s damn well what they marketed to us. For 20 years now I’ve watched commercials yelling “UNLIMITED INTERNET” all the while burying limits in the fine print or not disclosing “abuse” limits at all. So over the last 20 years we’ve developed apps (games, video, streaming in general) to fully utilize the “UNLIMITED INTERNET” we were sold….figuratively if not actually.

        My response to the ISPs is, you made your bed, now lie in it! Mr. Ou, since the company you work for claims to encompass “culture” as well, what is your take on the culture aspect of 20 years of “UNLIMITED INTERNET” marketing? Did you not expect that “UNLIMITED INTERNET” would become ingrained in our culture after two decades of marketing repetition, and that consumers would actually believe this is what they were getting? Well it has, so now ISPs need to deliver. I’m sorry if “20-1 STATISTICALLY MULTIPLEXED INTERNET” doesn’t have quite the same marketing zeal, but they should have been advertising the service they intend to provide.

  13. Ed Hilton says:

    I live in back woods Tennessee. I had a sprint wireless Data plan that was unlimited. I was 13 months into the plan. I really enjoyed the 1mb connection compared to dial up. I paid $59.99 per month. I used 17gb on average. They kicked me off discontinued my service which I had a contract with them to receive. I always paid my bill which upheld my end of the bargain but they broke the contract with me. Why for going over this 5gb cap thing that they all have imposed on everyone. I even ask if they had a higher priced unlimited plan that I could get. They said no of course. But they did say that in the future they may have another plan? I told them I only get burned once! For the life of me I cannot understand why all providers are doing the same thing(they are in bed together). I have no other option besides dial up. At&t (death-star) has told me ever sense 1990 that I will be getting DSL soon? I can order comcast online but no one ever comes? My state had a plan with At&t with the bell south merger for broadband but they of course lied. Its getting to the point to where people at work say if caps continue they will just shut off the internet. I look at cable and satellite tv as data also, what if they said you could only watch 4 hours of TV each month? Or use only 5KW of electricity?

    I would love to cap there use of my land to send signals across or even stop the signals……

    I have found this very interesting:

    BROADBAND SCANDAL Bruce Kushnick, [email protected] 718-238-7191

    Summary:
    $200 Billion Broadband Scandal

    This book documents the largest fraud case in American history

    The case is simple: Do you have a 45 Mbps, bi-directional service to your home, paying around
    $40? Do you have 500+ channels and can choose any competitive service? You paid an
    estimated $2000 for this product even though you did not receive it and it may never be
    available. Do you want your money back and the companies held accountable?

    Background: Starting in the early 1990′s, the Clinton-Gore Administration had aggressive
    plans to create the “National Infrastructure Initiative” to rewire ALL of America with fiber optic
    wiring, replacing the 100 year old copper wire. The Bell companies — SBC, Verizon, BellSouth
    and Qwest, claimed that they would step up to the plate and rewire homes, schools, libraries,
    government agencies, businesses and hospitals, etc. if they received financial incentives.

    The Commitment:


    By 2006, 86 million households should have already been wired with a fiber (and coax),
    wire, capable of at least 45 Mbps in both directions, and could handle 500+ channels.

    Universal Broadband: This wiring was to be done in rich and poor neighborhoods, in
    rural, urban and suburban areas equally.

    Open to ALL Competition: These networks were to be open to ALL competitors, not a
    closed-in network or deployed only where the phone company desired.

    Each State: By 2006, 75% of the state of New Jersey was to be wired, Pennsylvania was
    to have 50% of households by 2004, California to have 5 million households by 2000,
    Texas claimed all schools, libraries, hospitals.…Virtually every state had commitments.

    Massive Financial Incentives: In exchange for building these networks, the Bell
    companies ALL received changes in state laws that gave these them excessive profits, tax
    savings, and other perks to be used in building these networks.

    This was not DSL, which travels over the old copper wiring and did not require new
    regulations.

    This is not Verizon’s FIOS or SBC’s Lightspeed fiber optics, which are slower, can’t
    handle 500 channels, are not open to competition, and are not being deployed equitably.

    This was NOT fiber somewhere in the network ether, but directly to homes.
    The Harms and Outcome


    Costs to Customers — We estimate that $206 billion dollars in excess profits and tax
    deductions were collected — over $2000 per household. (This is the low estimate.)

    Cost to the Country — About $5 trillion dollars to the economy. America lost a
    decade of technological innovation and economic growth, about $500 billion annually.

    Cost to the Country — America is now 16th in the world in broadband. While Korea
    and Japan have 40-100 Mbps at cheap prices, America is still at kilobyte speeds.

    The New Digital Divide — The phone companies current plans are to pick and choose
    where and when they want to deploy fiber services, if at all.

    BROADBAND SCANDAL Bruce Kushnick, [email protected] 718-238-7191


    Competitor Close Out — SBC, BellSouth and Verizon now claim that they can control
    who uses the networks and at what price, impacting everything from VOIP and
    municipality roll outs to new services from Ebay and Google.
    The Truth: This is a Fraud Case


    Fraud: There is a dark secret — the networks couldn’t be built at the time the
    commitments were made and are still not available. If someone pays thousands of dollars
    for a service and doesn’t get it, isn’t that fraud?

    Collusion and Cover-up: TELE-TV and Americast, the Bell companies’ fiber optic front
    groups, spent about $1 billion and were designed to make America believe these
    deployments were real in order to pass the Telecom Act of 1996 and enter long distance.
    How did every major phone company in America not know that these fiber-based
    services couldn’t be built and were able to defraud over 40 states?

    The mergers killed fiber optic deployments in over 26 states and harmed
    competition. With every merger, the phone companies simply dropped all state
    commitments and harmed every state they merged with. Case in point: Verizon cut
    deployments to 13 states during the NYNEX-Bell Atlantic merger, not to mention GTE’s
    28 state deployments. SBC did the same in all 13 of its states, from California to Illinois.
    Worse, the mergers were based on the companies competing with each other and there is
    NO evidence they ever did any serious wireline residential competition.

    The Regulators Killed Competition and Broadband. Over the last 4 years, instead of
    continuing competition as ordered by the Telecom Act of 1996, the FCC has rewritten the
    laws close down Internet Service Providers (ISPs) that brought America to the Internet,
    as well as virtually all local competition. AT&T and MCI couldn’t compete because they
    were regulated out of business and thus were sold off.

    Distortion of the Truth by the FCC. Virtually every piece of documentation presented
    in this work is missing from the FCC’s Advanced Network Reports. The FCC defines
    broadband as 200 kilobytes per second in one direction — 225 times slower than what
    was promised in 1992.

    Cross-Subsidization — Instead of spending the money on these networks, the Bell
    companies used the money to enter long distance, rollout wireless and the inferior DSL
    services. The Bells also lost over $20 billion overseas and paid executives over a billion
    in stock options during the mergers.

    Bait and Switch — Customers paid for a fiber optic wire and got DSL over the old
    copper wiring — it’s like ordering a Ferrari and getting a bicycle.
    20 Year Analysis of Revenues, Profits, Expenditures: This book is based on a 20 year
    analysis of Bell-supplied data, Census Data and Business Week. Since 1984::


    Revenues are up 128%.

    Employees are down 65%, Construction is down 60%.

    $92.5 billion is missing in network upgrades.

    Profits based on failed fiber plans up 188% as compared to other utilities.
    Teletruth has filed a complaint with the Federal Trade Commission, (FTC) to investigate the
    claims presented; the book is the data for our complaint

    Can We trust Them?

    Eddy

    • Tim says:

      Damn, I did not know this. PBS even covered this. Thank you for sharing this. Every news outlet out there should be on this.

  14. Tim says:

    Finally got through these comments, whew.

    Anyway, someone tell me this, are we having a data crisis or a bandwidth crisis?

    Because if it is the later, then it would seem the problem is one that ISP’s are over-selling their backbone.

    If it is data, then how are we going to run out of data?

    Please explain to me why data needs to be capped and not bandwidth? And don’t the ISP’s have lower speed offerings for people who are lite uses? And don’t ISP’s make a killing, already, off of people that usually go for the premium speed tiers? Time Warner’s biggest gains have been on the broadband side.

    The big secret, though, is that caps are a last ditch effort to keep you from getting TV over the net, for free! Cable TV providers have been fleecing people for the longest and now when they are threatened with competition, they come up with these cap ideas and blame it on P2P or something.

    See, even today, it is expensive to install a cable tv network in a city, town, area, ect.. That is why you see usually only one 1 provider. But thanks to the internet, that isn’t necessary to install a costly infrastructure from total scratch. So these guys have enjoyed relatively no competition. Only here recently, have they seen the threat of the net and only here recently did they start talking about capping your usage.

    When these ISP’s dropped their newsgroup access service, some completely altogether, did the customers of those ISP’s see a rate decrease even though this saved them a lot of money and bandwidth? No. Those customers still get charged the same amount for less service.

    Some of you people are living in a pipe dream if you think it will be cheaper if you go to caps. That wouldn’t be in their best interests. They, the ISP’s, are in the business to make a buck and if that involves upending you and shaking it out of you, then so be it.

  15. Jon Henke says:

    “Mr. Ou, since the company you work for claims to encompass “culture” as well, what is your take on the culture aspect of 20 years of “UNLIMITED INTERNET” marketing?”

    I can’t speak for George and I can’t speak to commercials you’ve seen over the years, but I do agree that advertising must be accurate, ISP’s should be transparent about exceptional network management practices and companies should not market “unlimited internet” while imposing undisclosed caps.

    • George Ou says:

      I’ve always stated that there needs to be much more transparency needed. I’ve said this during public speaking, in my writing, just about everywhere.

      As for the claim of 20 years of “unlimited internet” marketing, the Broadband market is barely 10 years old. So this kind of hyperbole isn’t helpful to the debate. Moreover, a few broadband providers used the term but I don’t think any of them do that now. Still, it hurts the honest ISPs not to have a transparency standard in place if other ISPs misrepresent their goods and services.

      • Ron Dafoe says:

        I don’t know if this is what he meant but I was using the internet through local dial up providers in 1995 or so.

        While broadband is barely 10 years old, dial up internet access was available in the early 1990s and some companies billed as unlimited back then as well (as long as there was no busyanyways).

        • Tim says:

          And I might add that caps have been tried before and failed. I was with AT&T dial-up back in the mid 90′s and they decided to change their unlimited plan to limited. Supposedly, they sent an email telling their already unlimited account subscribers about the radical change in their account. I never received the email and boy was I surprised when I got the bill at the end of the month, $400+!! I complained and I did get a credit on my account and soon there after they stopped the silly cap stuff because it was ridiculous. $400 for internet? That is just dumb.

  16. Just a quick note on how our comment section works. If people include two or more links as part of their comment, it will get marked as ‘pending review’ and held before it gets published. On weekdays, that usually means no more than a few hours before I see it and approve it. On weekends, that can take a bit longer because I make an effort to get away from the computer to re-energize and “have a life.” :-) This policy is in place to keep comment spam from becoming an issue. Most of that spam has tons of links in it.

    We allow opposing views here because I think it’s important to know and investigate what the opposition believes and fact check it.

    The only time I will step in is when a personal flame war erupts that isn’t about debating the issues, but rather focused on simply personally attacking people. I also delete spam on sight.

  17. I have a few moments now to address the article George Ou posted on the “pro-commerce” website Digital Society.

    1) It looks like George has a lot of skeptical readers even over on his own site. The comments petered out at 20, and outside of a handful of comment linkbacks to other blogs (where the same challenges were often raised by skeptical consumers), there just doesn’t seem to be too many convinced by George’s theories.

    2) “Denounce” is a mighty strong word. I don’t denounce George personally, I call out his position on his issue. It isn’t a case of him “selling out” consumers, because he’s held some of these positions long before his new job working with a Washington-based special interest think tank. He never represented us to begin with.

    3) Beyond the hyperbole about kittens and baby seal clubbing which is just waving shiny keys hoping people will dismiss me out of hand, he claims that I think “George Ou hates Net Neutrality and is probably in favor of blocking VoIP services and ISP censorship,” and that “these kinds of attacks” don’t advance the debate.

    George is right. The only question is, why is he doing the attacking? George, guess what? This debate isn’t about -you- personally, or whether or not I think -you- are in favor of blocking VOIP services and ISP censorship. We’re far more concerned about the views of the ISPs that are writing checks to affiliate with some of the groups you and your boss are running/”working with.”

    We’re the customers, remember? The ones providers and special interests aren’t paying to distribute our views.

    The VOIP issue and ISP censorship weren’t fear-mongering.

    It wasn’t me suggesting VOIP providers might be blocked by an ISP in the United States. It was ACTUALLY an ISP in the United States that did that:

    (http://archive.webpronews.com/news/ebusinessnews/wpn-45-20050304FCCStepsInAgainstVoIPBlockingPhoneCompany.html)

    It wasn’t me saying that telecom companies might be tempted to block and censor the views they don’t like. It was actually Telus, in Canada, which cut customers off from reading a union website critical of the company:

    http://www.nytimes.com/2005/08/01/business/worldbusiness/01telus.html?_r=1

    Are these widespread problems? No, not yet. But I’d prefer not to allow things to deteriorate to that point when this can be nipped in the bud today.

    This site is not interested in scare-mongering about Net Neutrality. We called out everyone who thought AT&T was blocking 4chan just a few weeks ago. We are technically aware enough to realize the difference between a solution to malicious denial of service attacks vs. a self-interested company trying to block criticism or competitors. http://stopthecap.com/2009/07/27/trigger-happy-att-4chan-hullabaloo-is-not-a-net-neutrality-issue/

    4) George accused me of quoting him out of context on the question of usage caps? Really? By quoting an entire two paragraphs of your argument completely in context -and- linking back to the original article for readers to follow themselves? Nobody on this site is confused about your position on usage caps. We consistently oppose them. George doesn’t.

    5) Under the overheated section “Dampier’s tin foil hat theories and lies” (really, George), he is reduced to recitations of my views that, of course, are incomplete and represent little more than “pot to kettle” when it comes to accusing me of quoting him out of context.

    George seems to have a reflexive fear of actually quoting me, perhaps because it’s a lot harder to try and knock down an opposing view if you are forced to actually present it fairly.

    Frankly, this is not surprising. When you actively work against consumers’ best interests and derive a paycheck from doing so, I’d probably be afraid too. Judging from the comments George, and his like-minded friends, have gotten thus far, whoever is cutting the checks to these groups really aren’t getting their money’s worth.

    6) I did find useful information on George’s position in his summation:

    “Intelligently managed networks mitigate the need for usage caps

    Intelligently managed networks like Comcast which employs “fair share” which deprioritize customers who use the most bandwidth behind customers who use the least bandwidth can offer the most generous usage caps. That’s because intelligent networks deal with the problem of peak consumption directly without having to knock down average consumption with more restrictive usage caps. But even with a good network management solution in place, residential broadband networks need some kind of usage cap that serves the needs of the vast majority of consumers. Those consumers with more demanding needs can choose commercial grade broadband services.

    Broadband providers who don’t employ these intelligent network management schemes have to resort to far more restrictive usage caps to indirectly deal with peak bandwidth consumption by knocking down the average consumption. This is why I have consistently stated that usage caps are the inferior solution and I strongly criticized Free Press and others for promoting the myth that usage caps are the superior alternative to network management. Now Free Press want to swing 180 degrees and get us to believe that ALL usage caps should be illegal, but Free Press’ hypocrisy and unreasonable stance on network management have shown us that they have no credibility.

    The current global broadband market has almost universally implemented some form usage caps and the vast majority of countries have more restrictive caps than the United States. Even Time Warner’s more restrictive usage cap is generous by global standards but the American market has rejected it and Time Warner has listened to the outcry. That is the free market in action and it has worked. What we don’t need is legislative action that swings too far to the other extreme where even sensible usage caps are outlawed.”

    So, to sum up this debate, it’s clear that George believes usage caps are appropriate right now, at least until “intelligent network management” (ie. throttles) can be introduced to artificially slow down the applications consumers use on their broadband accounts when a provider makes the decision they have exhausted their “fair share” of that network for the period they decide is appropriate. Why should we complain about usage caps anyway, given the proposal from Time Warner Cable, in George’s eyes, is generous by global standards.

    Usage caps – Yes, for now
    Throttles – Yes, and then less need for pesky usage caps
    Level of caps – OK if they are generous by global standards

    After nearly 100 comments here, we’re really back to the original piece I wrote, which hardly misrepresented Ou’s views. I still consider them anti-consumer, and come at consumers’ expense when a more practical solution would be for broadband networks to expand using some of the enormous profits they earn to accommodate the interests of their customers. A formal broadband usage cap, particularly as part of a consumption tier billing system, is designed to empty consumers’ wallets or make them fear using their broadband service out of concern they will go over their limit. The lack of competition for most consumers makes his solution to “switch to the DSL provider” hardly much of a solution at all, particularly for consumers facing an even more oppressive cap from the phone company.

    I guess I’ll just keep wearing that tin foil hat of mine. :-) At least I paid for it out of my own pocket. It wasn’t given to me by AT&T and Verizon, and whoever else bankrolls Digital Society, Arts+Labs, and the PR firm DC Signal Team.

    • Sonicmerlin says:

      I don’t understand. Where is George Ou getting his information that the vast majority of developed countries employ caps, let alone *stricter caps* than in the US? Was there an international study demonstrating this information?

      Furthermore, how does he explain the profitability of ISPs in countries like Sweden and Japan, where symmetrical 100mbit connections have been offered for years?

      Finally, how does he justify Time Warner’s desire to impose caps when they’ve had the same speed tiers for a DECADE, and internet speed increases according to Moore’s Law? They also make billions upon billions in profit.

      The only Cable company in the US who even bothered upgrading to DOCSIS 2 was Cablevision. What happened to the rest of these companies?

      • George Ou says:

        “I don’t understand. Where is George Ou getting his information that the vast majority of developed countries employ caps, let alone *stricter caps* than in the US? Was there an international study demonstrating this information?”

        The data comes from the OECD broadband portal. http://www.oecd.org/document/54/0,3343,en_2649_34225_38690102_1_1_1_1,00.html

        It’s also well known that the caps in the UK, Australia, and Canada are very restrictive. The OECD data simply confirms it and it also shows the caps in other nations as well.

        Broadband usage/uptake and Internet traffic has shot up exponentially at a very steep climb. This idea that we’ve been flat over the last decade is utterly wrong.

        • Alex says:

          Bandwidth costs have also lessened, and broadband ISPs have had increasing profits. Even the CLECs in Canada which still offer uncapped broadband in parts of the country are profitable.

          Considering that more internet content is still produced in the US than any other country and that the US is home to several major hubs it would be fair to say that the US can certainly afford more bandwidth relatively.

  18. Jeorge Houenke says:

    Ummm. do you think the moderator at Digital Society will allow my post….here it is, in case they choose to censor me.

    Jeorge Houenke said:

    As an unprincipled industry lobbyist puppet once said…”every broadband provider in the world has to have some kind of usage cap…”
    HAH!…NOT!!! Caps ARE NOT required…best effort and true competition in the high margin ISP market are the ONLY answers….. unless of course you prefer the rape and pillage money party tactics of Time Warner and other companies attempting to take usurious advantage of their monopolies to reduce service and bleed their customers who have no other alternative for service.

  19. Ron Dafoe says:

    I posted this over there. I really want to know what his answers are on a variety of these real consumer problems. It would be very easy to exploit the Gb per month model for ISPs so their partners become the defacto leaders, with a kickback to ISPs of course:

    What about those of us that do not have AT&T or Verizon to use as a service? You seem to continually think that both of these providers have access to the entire country when it is not true. There is no other cable provider in Rochester NY. There is no other regular phone service company in Rochester, NY besides Frontier. Frontier states in their terms of service that they think 5Gb per month is sufficient, but they have not decided what to do about it yet.

    Can you explain to me, that if it is network congestion that is the problem, why if I use 6Gbs per day in 3 hours, and my neighbor uses 1Gbs per day but has a continuous stream of data 24 hours a day/7 days a week that it is a good way to bill us for network use?

    What about those of us that do not use P2P that use data? Why are all these things so focused on P2P? Why don’t they limit only the P2P traffic and explicitly state that they limit it and that it is limited to if that is the argument?

    Why don’t we have data limits on cable TV? They have had to build out their networks as well as upgrade their technology to get HD on their backbone.

    What is wrong with offering various levels of service based upon speed? Why can’t there by a 1Mb connection at $15 a month to save people money, a 10Mb service at $40 and a 20Mb service at $60 per month for those that want to spend the money?

    If you are going to take consumer intrests in consideration, are you not concerned about deals that these ISPs can make where by their own services will not count against the data caps that they have and theirby taking competition essentially out of the picture? Such as netflix? Or having netflix pay some amoutn of money to the ISP to be exempt from the data caps and then Netflix having a serious advantage over Amazon and others? This leads to no competition in the long run if this happens.

    Are you not concerned about ISPs coming up with stuff like “The Netflix data package” that you pay directly to your ISP at some amount of money to allow unlimited Gbs of data to the netflix site (or any other company)?

    These are companies. Their concerns are how to give value to their shareholders while keeping customers.

    If they need more money, why are they shy about raising their prices on Internet Access? I think a $10 price increase across the board with a promise that more services where forthcoming such as DOCSIS 3 would have been recieved far better.

    Why are other ISPs saying that they do not need data caps? Are they crazy?

  20. My initial reaction to George’s article is “pot to kettle” and I’ll probably address a few points he made in the comments section here (it’s not worth another article on this debate) later.

    It appears thus far that reaction in the comments is not exactly uniformly positive towards Ou’s position.

    My overall assessment really remains the same. I’m not sure consumers will be convinced that George and his boss represent the pro-consumer view when, in fact, they have some ties to the industry that is responsible for some of the behavior that has consumers upset.

    I would like to hear from people if their comment was not approved for publication on their site. Our policy is to trust our readers to comment responsibly and we give them the benefit of the doubt, allowing their views to go live immediately, except if they include two or more links (which might indicate a comment spammer). I then review the comment and approve it, no matter what position is taken, as long as it is not spam.

    I welcome all points of view, as long as they are not spam, aren’t part of a personal attack flame war, or are completely off topic (such as the one accusing the cable industry of being part of a Zionist conspiracy). After I stopped laughing, I zapped that one.

    I also appreciate the engaging and very on point replies from our readers, who have gained a lot of insight and ability to challenge industry talking points and refute them effectively. I suppose when your broadband provider tries to rip you off, that’s motivation to get into the fight. :-)

  21. lucy says:

    “What about those of us that do not use P2P that use data? Why are all these things so focused on P2P? Why don’t they limit only the P2P traffic and explicitly state that they limit it and that it is limited to if that is the argument?”

    Please let’s not go threatening net neutrality for the sake of eliminating the bandwidth cap. One of the reasons for the caps in the first place (other than taking all our money), is to go against net neutrality principles and show preference for some content over others. “If you watch videos on hulu it goes against your cap, but if you watch videos from our partner site, it doesn’t get counted against your cap!” Which streaming video site do you think would do better?

    P2P is only an excuse. Whatever the latest bandwidth intensive app is will always get the blame. It was music; it will be HD video. And P2P is easy to blame, because they can always claim that it’s made up of pirates bleeding the software and music and movie industries dry. But it is not their job to police the internet, nor should it be.

  22. For me, it’s an “agnostic argument” as far as what people do with P2P. I agree that providers and some of their astroturf friends do use copyright issues as one of the arguments why P2P throttles only target the pirates. They did this in Canada, right up until the Canadian Broadcasting Corporation noted THEY use P2P to deliver some of their television shows to Canadians watching online.

    Joost used P2P to show legitimately licensed TV shows to Americans. Skype uses a form of P2P to make and receive telephone calls. Some software distribution portals use P2P technology as well.

    When usage caps were introduced in Canada, P2P got the blame. But as we saw, not only did they dump usage caps on the heads of their customers, they also throttled the speed of those BitTorrent applications by 90% for extended periods of the day.

    In the United States, Comcast started with a throttled speed concept to slow demand on their networks from BitTorrent. They also blamed P2P. The FCC spanked them, and they switched to a simple 250GB monthly traffic allowance.

    The arguments these days about the “need” for usage caps is online video. P2P’s glory days are really behind us — the piracy sites are infested with trojan horses, viruses, and other malware in many of the most sought after applications downloaded from there. A lot of the online video that people used to download using BitTorrent has become available on sites like Hulu.

    You are absolutely correct that ultimately this is all about money. By using artificial controls like usage caps and speed throttles, it reduces the need for providers to spend money to upgrade their networks. The proof is in Canada, which continues to fall behind in broadband rankings. In the absence of robust competition, and wholesale provider Bell now permitted to slap caps on independent ISPs using them for connectivity, Canadians are now faced with conserving bandwidth like it’s a limited natural resource.

    There are some technical challenges from applications like BitTorrent, and its ability to be configured to use all available bandwidth. But BitTorrent P4P, the proposed next generation of BitTorrent, holds promise in dramatically reducing its impact on even the more constrained platforms like cable’s shared bandwidth design.







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