As a Canadian who went through the debate here, I can say that caps and rate hikes aren't the same thing. The psychological impact on the average internet user is very different, and so online behaviour will be impacted in a different way.
Paying 40$ a month instead of 30$ for an unlimited or very high amount of data means you'll grumble a bit, but you'll still do whatever you did before.
Going from a very high cap or unlimited to a very low cap + expensive additional data means you'll very probably try to restrict your data transfers and do whatever you can not to exceed your cap.
You don't have a sunken cost like with a normal rate hike..
What's surprising to me is that, at least with Comcast, there's simply no way to get the cap-free service I had before. I don't have the option to pay more to remove the cap (other than paying per gigabyte over the cap, which is silly).
While I don't argue with the title of the article - bandwidth caps really are just a way to deal with infrastructure costs by passing it on to some consumers - the use of IP transit as a reference for an ISPs cost of service is inaccurate.
IP transit costs are what a carrier or ISP would pay to get traffic from their main datacenter/CO in a given metro area to the Internet. This is an operating expense and is a drop in the bucket compared to CapEx they spend on the last mile.
The cable operators and mobile carriers are freaking out because they are constantly pouring money into nodes splits and QAM carriers(cable) or radios, backhaul, and spectrum(mobile). These are the real money pits of their businesses and their motivation to enforce data transfer caps, throttling, etc.
I don't understand why ISPs aren't offering some benefit to their users when they introduce these transfer caps. Why not add caps to the lower plans and lower the price as well? If it's true that the vast majority of users don't get anywhere near the caps, then this would be beneficial to most users.
For heavier users, offer a plan with no cap (or, say, a cap 10x larger) and higher speed, and charge more for it. I think power users would be much more accepting of a price increase along with higher speeds than a simple addition of caps to all plans with no price change.
In the US, cable companies are often monopolies in providing broadband internet. They get away with offering mediocre product and poor service simply because there are no alternatives.
I've had the backwards situation where it was cheaper to buy basic cable TV + cable internet than stand alone cable internet.
It would be foolish of them to offer a cheaper, limited cable internet plan when they can make everybody pay more for their standard, unlimited (that is not unlimited) plan.
Just playing devil's advocate here... Is the wireless cap really a bad thing? I have a 2GB cap right now. I still stream music, surf and watch the occasional YouTube video. I haven't gotten close to the cap yet. I pay about as much as I did for "unlimited" and the biggest impact is that I now keep track of how much data I'm using. Yeah, it's annoying. It's easier to have unlimited and not have to think about it. But I also don't want a wireless internet experience that's as slow as molasses because everyone is walking around streaming Netflix day and night or some cheapskate has decided to use his smartphone as his home internet connection. I can deal with caps as long as they are reasonable and periodically adjusted to account for increasing demands of mobile apps and sites.
the 2-5 GB caps are for wireless networks, aka 3G. How often do you download HD movies onto your phone? In the very next sentence it mentions 250 GB for desktop connections.
Is this spectrum encumbered by any regulations that would prevent an enterprising individual from leasing some land near a backbone connection and setting up a startup ISP?
Would LOVE to see the regional cable monopolies face real competition. 22Mbps is about 30% more downstream and 4000% more upstream speed than I get from Time Warner Cable in NYC.
22 Mbps shared by hundreds or thousands of customers is much worse than cable or DSL. You can already do ~100 Mbps at decent range in 2.4 GHz using Ubiquiti or similar equipment; there are dozens of WISPs doing this and if they're lucky they barely break even.
Cringely doesn't mention ISPs' claims that they will increase the caps every year. I'm willing to wait for them to renege before breaking out the torches and pitchforks.
[+] [-] MikeCapone|14 years ago|reply
Paying 40$ a month instead of 30$ for an unlimited or very high amount of data means you'll grumble a bit, but you'll still do whatever you did before.
Going from a very high cap or unlimited to a very low cap + expensive additional data means you'll very probably try to restrict your data transfers and do whatever you can not to exceed your cap.
You don't have a sunken cost like with a normal rate hike..
[+] [-] baddox|14 years ago|reply
[+] [-] sgrossman|14 years ago|reply
IP transit costs are what a carrier or ISP would pay to get traffic from their main datacenter/CO in a given metro area to the Internet. This is an operating expense and is a drop in the bucket compared to CapEx they spend on the last mile.
The cable operators and mobile carriers are freaking out because they are constantly pouring money into nodes splits and QAM carriers(cable) or radios, backhaul, and spectrum(mobile). These are the real money pits of their businesses and their motivation to enforce data transfer caps, throttling, etc.
[+] [-] baddox|14 years ago|reply
For heavier users, offer a plan with no cap (or, say, a cap 10x larger) and higher speed, and charge more for it. I think power users would be much more accepting of a price increase along with higher speeds than a simple addition of caps to all plans with no price change.
[+] [-] rexf|14 years ago|reply
I've had the backwards situation where it was cheaper to buy basic cable TV + cable internet than stand alone cable internet.
It would be foolish of them to offer a cheaper, limited cable internet plan when they can make everybody pay more for their standard, unlimited (that is not unlimited) plan.
[+] [-] michaelbuckbee|14 years ago|reply
200MB - $15/month 2GB - $25/month
Albeit without the higher speeds.
[+] [-] MrVitaliy|14 years ago|reply
It is even more pathetic with their 4G network advertisement. All it takes is 1(maybe 2) HD movies from Netflix to hit a monthly cap.
[+] [-] jm4|14 years ago|reply
[+] [-] Ronkdar|14 years ago|reply
[+] [-] zheng|14 years ago|reply
[+] [-] joelhaus|14 years ago|reply
Original article was posted here yesterday: http://news.ycombinator.com/item?id=2814917
Cross-posting my question from this thread:
Is this spectrum encumbered by any regulations that would prevent an enterprising individual from leasing some land near a backbone connection and setting up a startup ISP?
Would LOVE to see the regional cable monopolies face real competition. 22Mbps is about 30% more downstream and 4000% more upstream speed than I get from Time Warner Cable in NYC.
[+] [-] wmf|14 years ago|reply
[+] [-] wmf|14 years ago|reply
[+] [-] ericd|14 years ago|reply
[+] [-] Bud|14 years ago|reply
[+] [-] noonespecial|14 years ago|reply
If you're not granny checking her email and facebook, you're not welcome here.
I think its more about quietly but forcefully sending the message that your internet is not for tv.
[+] [-] unknown|14 years ago|reply
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