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.

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.

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?

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.

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.

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.

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.

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.

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.