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#1 Pupik

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Posted 23 January 2013 - 21:20

For years, the key rationale given by broadband providers for implementing data caps was that it was the only way they could deal with "congestion." Of course, for years, independent researchers showed that this was bogus, and there was no data crunch coming. If you actually caught a technologist from a broadband provider, rather than a business person or lobbyist, they'd quietly admit that there was no congestion problem, and that basic upgrades and network maintenance could easily deal with the growth in usage. But, of course, that took away the broadband providers' chief reason for crying about how they "need" data caps. The reality, of course, is that data caps are all about increasing revenue for broadband providers -- in a market that is already quite profitable. But if they can hide behind the claims that they need to do this to deal with congestion, they can justify it to regulators and (they hope) the public.

Of course, enough people have been calling this explanation out as completely bogus that it appears that even the broadband companies' own lobbyists may finally be dropping this line of reasoning. Former FCC boss Michael Powell, who is now the cable industry's chief lobbyist (president of the National Cable and Telecommunications Association -- NCTA), has finally admitted caps aren't about congestion:

Michael Powell told a Minority Media and Telecommunications Association audience that cable's interest in usage-based pricing was not principally about network congestion, but instead about pricing fairness...Asked by MMTC president David Honig to weigh in on data caps, Powell said that while a lot of people had tried to label the cable industry's interest in the issue as about congestion management. "That's wrong," he said. "Our principal purpose is how to fairly monetize a high fixed cost."

Of course, as Broadband Reports notes, Powell is jumping from one myth (congestion) to another (fairness) that is just as ridiculous. If it was true, we'd see at least some prices going down. But we don't.

Except the argument that usaged pricing is about fairness has been just as repeatedly debunked. If usage caps were about "fairness," carriers would offer the nation's grandmothers a $5-$15 a month tier that accurately reflected her twice weekly, several megabyte browsing of the Weather Channel website. Instead, what we most often see are low caps and high overages layered on top of already high existing flat rate pricing, raising rates for all users. Does raising rates on a product that already sees 90% profit margins sound like "fairness" to you?

Data caps are about one thing only: increasing profits for the broadband providers, who already have massive control over the market with limited competition. It's nice to see them give up on one myth (even if we still see pundits repeating it without criticism), but it would be nice if we could get past the others as well.

http://www.techdirt....ongestion.shtml


#2 n_K

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Posted 23 January 2013 - 21:49

"Data caps are about one thing only: increasing profits"
Oh you don't say.
The only point in having a business is to make money, not to care for customers.

#3 spacer

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Posted 23 January 2013 - 22:12

The real problem is that ISPs (which are usually television providers too) are losing money due to the ancient business models still in use.

Broadcast companies make money in two ways: charging providers for the right to re-broadcast their content and advertisements. They are quickly losing money due to ratings and impressions going down. (due to DVR-commercial skippage, digital outlets, and piracy) So in order to increase their margins, they charge providers more. In turn, providers charge customers more for tv or internet...or both. If they can get away with monetizing internet by putting caps on it because there are no laws in place, then of course they are going to.

It's a chain of archaic logic fueled by greed that only hurts the end customers.

#4 n_K

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Posted 23 January 2013 - 22:37

The real problem is that ISPs (which are usually television providers too) are losing money due to the ancient business models still in use.

http://www.bbc.co.uk/news/business-16941543
Lost £78m in the 3rd quarter but made £48m in the 4th quarter, they're not losing money.
http://www.bbc.co.uk...siness-18015996
BT making £2.4b really isn't any proof of cable companies losing money.

#5 Growled

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Posted 24 January 2013 - 01:53

It's all about their greed.

#6 Biotoxic_hazard_835

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Posted 24 January 2013 - 02:01

It's all about their greed.


Pretty much sums it up.

#7 (Spork)

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Posted 24 January 2013 - 02:20

never had a cap on my isp O__0

#8 Colin McGregor

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Posted 24 January 2013 - 02:30

No cap on mine. I download full 50gb Blu-ray rips instead of dvdrips because of it lol.

#9 Mr Nom Nom's

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Posted 24 January 2013 - 02:31

Their argument might hold a certain amount of water when viewed from the position that the less you use the less you should pay but equally lets not forget how these companies raked in massive profits in the good times but spent next to nothing upgrading their infrastructure to prepare themselves for the obvious explosion in usage. What these businesses need to do is firstly upgrade their infrastructure and secondly realise that a dumb pipe to the home is a dead end and that they need to go beyond that - and that might require offering VoIP services, on demand television/movies, cloud services (which should be faster given that the datacentre is on the end of the cable rather than sending a packet half way around the world) etc.

#10 Colin McGregor

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Posted 24 January 2013 - 02:32

http://www.bbc.co.uk...siness-16941543
Lost £78m in the 3rd quarter but made £48m in the 4th quarter, they're not losing money.


ok so my math may be off but if I lose 78M but gain back 48M I did in fact lose money.

78 - 48 = 30M (in case you have issues with math).

#11 +Medfordite

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Posted 24 January 2013 - 02:56

I am guessing I have 250gb but can't find where on my Charter account to find how much I have used. I found it one time but then not now. Extremely buried. As a user of online streaming services like Netflix, was surprised that during our heaviest usage, never even reached the cap so was pretty happy about it.

Anyone know where on Charter to find such a thing anymore? :)

In regards to the bandwidth caps, their excuse at least is to prevent excessive use of the services so probably loosly translated to bandwidth congstion that "exists".

#12 n_K

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Posted 24 January 2013 - 11:08

ok so my math may be off but if I lose 78M but gain back 48M I did in fact lose money.

78 - 48 = 30M (in case you have issues with math).

But gains money in every quarter after that so is making money, or do you not understand simple economics?

profit + profit + profit + profit + profit - loss = giant profit

#13 +Aheer.R.S.

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Posted 24 January 2013 - 11:14

it's about fricken time, UK, and most if not all of europe knew this was a crock, nothing more than a money maker to piggyback from superfast broadband

#14 Kane

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Posted 24 January 2013 - 11:24



#15 I am Reid

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Posted 24 January 2013 - 17:56

as far as I know no cable based ISP's have a cap, I think there are rumors that some might have one that's like 250-500gb a month, but I still have never really heard of anyone getting extra fees for going over it. As far as cell providers that have caps, then yes, that does make more sense as congestion can be an issue, but not as much as they like to claim sometimes.



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