Mixed feelings about broadband caps
Aug. 29th, 2008 11:17 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
[Expanding on some thoughts I've made in comments elsejournal recently.]
Comcast has just made official what they've been hinting at for quite a while: they will be capping residential monthly bandwidth at 250GB. Needless to say, this is causing some consternation in the blogosphere.
On the positive side, they're actually giving a concrete number, as opposed to being vague about it, which is a real improvement -- there have long been reports of them tapping heavy users on the shoulder and saying, "Too much". If that's going to happen, I'd much rather have them saying publically what the limit is rather than applying it secretly and arbitrarily. And in their defense, 250GB *is* a lot of traffic: I'd be pretty hard-pressed to use that much with current technologies.
More importantly, the economist in me doesn't mind the idea of bandwidth caps. The notion of "all you can eat" is bad economics: by failing to set a price on consumption, it encourages people to be stupidly wasteful, and that will usually lead to bad results. By saying explicitly "this much bandwidth will cost you this much", it allows people to see what their consumption is costing, and to compare plans appropriately. In principle, competition should drive the cost-per-bit down to appropriate levels.
(And perhaps even more importantly, it's a move towards treating Bits As Bits, which is a healthier way to think about the Internet than trying to distinguish one kind of traffic from another, as they've been doing lately.)
OTOH, in practice there's a big snag here -- this isn't a particularly competitive market. It's not *too* bad in the Boston area: we've got three big players (Comcast, RCN and FiOS) duking it out in many towns, which is enough to keep them somewhat honest. But a lot of places have only two, which is dangerously cozy, and many only have one, which typically leads to things being more expensive than they should be. Even with three players, frankly, the market is smaller than I like, especially when those players have shown a tendency towards acting as a block when convenient.
So the situation does make me a bit nervous: in the face of weak competition, Comcast could potentially abuse their pricing power. The only reason I'm not *really* worried is the details of this particular market -- FiOS is the hungry new entrant into this market, and one of their best competitive advantages is bandwidth. (FiOS' network is in some respects much better than Comcast's.) I expect this to keep Comcast honest, lest they hand Verizon a big competitive advantage. But it's worth watching developments in this space closely, and it makes it even more important to fight against the industry's constant attempts to stifle new competition...
Comcast has just made official what they've been hinting at for quite a while: they will be capping residential monthly bandwidth at 250GB. Needless to say, this is causing some consternation in the blogosphere.
On the positive side, they're actually giving a concrete number, as opposed to being vague about it, which is a real improvement -- there have long been reports of them tapping heavy users on the shoulder and saying, "Too much". If that's going to happen, I'd much rather have them saying publically what the limit is rather than applying it secretly and arbitrarily. And in their defense, 250GB *is* a lot of traffic: I'd be pretty hard-pressed to use that much with current technologies.
More importantly, the economist in me doesn't mind the idea of bandwidth caps. The notion of "all you can eat" is bad economics: by failing to set a price on consumption, it encourages people to be stupidly wasteful, and that will usually lead to bad results. By saying explicitly "this much bandwidth will cost you this much", it allows people to see what their consumption is costing, and to compare plans appropriately. In principle, competition should drive the cost-per-bit down to appropriate levels.
(And perhaps even more importantly, it's a move towards treating Bits As Bits, which is a healthier way to think about the Internet than trying to distinguish one kind of traffic from another, as they've been doing lately.)
OTOH, in practice there's a big snag here -- this isn't a particularly competitive market. It's not *too* bad in the Boston area: we've got three big players (Comcast, RCN and FiOS) duking it out in many towns, which is enough to keep them somewhat honest. But a lot of places have only two, which is dangerously cozy, and many only have one, which typically leads to things being more expensive than they should be. Even with three players, frankly, the market is smaller than I like, especially when those players have shown a tendency towards acting as a block when convenient.
So the situation does make me a bit nervous: in the face of weak competition, Comcast could potentially abuse their pricing power. The only reason I'm not *really* worried is the details of this particular market -- FiOS is the hungry new entrant into this market, and one of their best competitive advantages is bandwidth. (FiOS' network is in some respects much better than Comcast's.) I expect this to keep Comcast honest, lest they hand Verizon a big competitive advantage. But it's worth watching developments in this space closely, and it makes it even more important to fight against the industry's constant attempts to stifle new competition...
(no subject)
Date: 2008-08-29 03:28 pm (UTC)That said, you didn't mention DSL; is that intentional, or does FiOS just overrule all out there? In Cambridge, we've got Verizon and Speakeasy at least for DSL... Makes up for the fact that I can't get FiOS or RCN, I guess.
(no subject)
Date: 2008-08-29 03:41 pm (UTC)(no subject)
Date: 2008-08-29 04:53 pm (UTC)I live in a city adjoining Cambridge, and we also don't have FiOS. That lack, however, is not due to low demand, nor inability on Verizon's part to run their FiOS here. It's because Verizon's terms for doing so are apparently so eggregiously excessive (I don't know the details, but the sense I got was either "city-granted monopoly" or "city-granted subsidies") that the city refuses to accept them.
(no subject)
Date: 2008-08-29 05:34 pm (UTC)And as
(no subject)
Date: 2008-08-29 05:38 pm (UTC)As it stands though, I'm happy with DSL, and have no plans to switch until FiOS comes to town.
(no subject)
Date: 2008-08-29 10:06 pm (UTC)(no subject)
Date: 2008-08-30 12:20 am (UTC)Ironically, the right way to deal with the potential server problem *is* bandwidth caps, on upload instead of down -- I would be much happier with those than on the stupid no-server rules...
Home servers
Date: 2008-08-30 05:28 pm (UTC)(no subject)
Date: 2008-08-30 10:29 pm (UTC)The easy way to do that is to block all web and mail connections. If they don't do that, they have to do more work to make sure their customers aren't abusing the rest of the net (whether or not the customers are personally responsible or have merely had their machines sucked into a botnet is irrelevant), and that costs money. I suspect there aren't enough of "us" to be worth worrying about, except as a truly niche market. Even in an open market, niche products demand a premium, so I'm not sure we'd be that much better off if we had more competition for the general home Internet market.
Why I can't get business-class service at my house is another issue entirely.
DSL is good enough for many people
Date: 2008-08-30 05:19 pm (UTC)A lot of people who aren't really heavy users are just fine with DSL; and Verizon sells their first-tier service pretty cheaply ($15 for 1.5Mbps, isn't it?). I'd say that makes them a legitimate competitor in the marketplace.
Suburban fiber
Date: 2008-08-30 05:21 pm (UTC)Hollow laughter. Verizon has no plans to come to Chelmsford. They're in some of our neighbors (Lowell, Westford), but we're not even scheduled.
(no subject)
Date: 2008-08-29 03:32 pm (UTC)(no subject)
Date: 2008-08-29 04:20 pm (UTC)(no subject)
Date: 2008-08-29 04:53 pm (UTC)I think a typcial XviD/DivX movie runs in around 700 MB - so you can even get a bunch of those in a month.
A blue-ray movie disk can store 25 to 50 GB - so downloading a lot of high-definition movies is going to cause problems.
(no subject)
Date: 2008-08-29 05:32 pm (UTC)(no subject)
Date: 2008-08-29 05:47 pm (UTC)We use VOIP for two phone lines (though one is for fax and is inactive 98% of the time), we have active browsing schedules, and we both play WoW. Sometimes we download a TV show or movie (at about 350 and 700 MB respectively). What is our use? No idea. I'm going to start hunting around for tools that might tell me.
If you know of any already, please share. I'm sure others here would also like to know.
(no subject)
Date: 2008-08-29 06:47 pm (UTC)Straw, camel.
Date: 2008-08-29 07:00 pm (UTC)Re: Straw, camel.
Date: 2008-08-29 07:28 pm (UTC)Re: Straw, camel.
Date: 2008-08-30 05:14 pm (UTC)I think broadbandreports.com will tell you how far you are from your CO, if you give them your phone number.
(no subject)
Date: 2008-08-29 07:20 pm (UTC)When the question is why, the answer is "Money". (Robert Heinlein).
Interestingly, there was a recent technical report on the theoretical limits of old "copper" phone line, which was far higher than most coax based cable companies.
My non-expert opinion.
Comcast has a simple choice. They can spend oodles of money on network upgrades to fix capacity at the customer end, the so-called "last mile". Or they can "monetize" the last mile, and make money off their lack of capacity, by setting limits and charging if you exceed them.
In a realistic competitive environment (the kind of enviroment that, in theory, capitalists prefer) there would be many competitors and any attempt to squeeze the consumer by monetizing a shortage would lead to mass exodus by the customer.
But that's not what we have. Even in happy-town, a place where you can get 3 different sorts of high-capacity bandwidth (and numerous DSL providers), we don't have the theoretic level of true competition (5 providers).
So, Comcast has a choice - make money, or spend it. And they choose to make money. Because Comcast has a choice, and the consumer does not.
"Why isn't Comcast competitive with their speeds?" Because they have no competition. (And the standard alternative to competition, regulation, is not easily available in this political climate.)
(no subject)
Date: 2008-08-29 07:43 pm (UTC)I will agree that there is a capacity issue, and that individuals are maxing out that capacity. But the problem is that ISPs have been unwilling to invest in infrastructure to keep up with the demands of the Skype, YouTube, and Hula age. Setting caps like this is just another way of telling the market what the demand side of supply and demand should be, so they can keep margins high and services low.
Even without increasing capacity, they could better set and honor bandwidth rates. Most people these days are purchasing a 5mb connection, and getting half of that if they're lucky. Honest and enforced rate caps would give more relief to most. With a usage cap, the lines are still saturated until some people get cut off. I'm sure many would be happy to downgrade to a guaranteed 1.5mb (fast enough for most things) if it were cheaper and made available. As it stands, the package providers don't want to lower prices, so they compete on advertised speeds, that they have no ability to meet, so you often see similar performance from the 10mb line as from the 5.
(no subject)
Date: 2008-08-30 12:07 am (UTC)They're still answering to the FCC on their practice of traffic shaping. They must see revealing what they're also already doing as damage control. The unlimited moniker seems doomed.