Verizon did something interesting with their wireless network: they track heavy bandwidth users and throttle them during peak traffic periods. [1]
That seems like a more reasonable option than hard traffic caps. It's no surprise more wired ISPs aren't using that strategy, though... hard caps generate revenue, while rate limiting heavy users doesn't. That wouldn't be such a problem if there were healthy competition in most metro markets, but there isn't.
Verizon FIOS is one of the few good [fast] U.S. wireline ISP options left that doesn't cap traffic. It's too bad many markets are still de-facto duopolies (from the days when there was a meaningful distinction between "telephone" and "cable" companies aside from layers 1-2). FIOS isn't available here, and if it were I'd switch in a heartbeat because of AT&T's incompetence [2].
Speaking as a victim of the UK's BT rampant throttling at peak times, often making any video streaming service totally unusable, FTP's die, RDP's to private servers extremely laggy, I can say only this.
Be careful what you wish for. Once they start, they will not stop.
Right on. I have a pretty good DSL connection (measures 10Mbps down most of the time) but YouTube is almost unusable on my iPad since if there's an HD video, that's the only version you can watch. The speed to YouTube is so poor that the video can't play in real time at all even with a long buffering period.
I full heartedly support throttling during peak traffic, but I don't see a reason for bandwidth capping.
We should all rise up as one and really ask, if we are now paying $X for $Y GB of data, why doesn't it roll over like Minutes or a persistent commodity.
I'd also like to point out Charter Communications doesn't throttle nor cap their bandwidth and yet the service is great!
We should all rise up as one and really ask, if we are now paying $X for $Y GB of data, why doesn't it roll over like Minutes or a persistent commodity.
Because user bandwidth is not, by definition, a persistent commodity. ISPs do not accrue bandwidth every month they are under capacity, so why should users?
True, but neither do cell phone mintes to a cellular company. They just figured out a way to make the economics work while providing a better service to users.
I disagree completely. It's just like real estate: since I only use about 50% of the floor space in my apartment at any given time, I roll over my unused square footage and only pay rent every other month.
The difference is when you don't use your bandwidth, the company benefits, but when you don't use your square footage, a company doesn't gain anything.
The ISP company only benefits if their pipe is saturated 100% at that moment. If they had spare capacity at that point in time, it's of no use to them and they can't carry it over.
As do I. Throttling per user (as in per customer port) rather than per traffic stream (the latter can cause net neutrality issues) is obviously a superior technological solution. Traffic caps and overage charges do nothing to prevent people from saturating links at peak traffic times (evenings, for home ISPs).
How do you know Charter doesn't throttle bandwidth at peak times? Do you track packet loss, and would you notice if it went up by a percent or two?
Even if an ISP doesn't voluntarily throttle traffic, border routers automatically will with WRED or some other more modern queue management strategy if there's too much traffic buffered for the link it's trying to send on. It's more a question of whether packet loss is managed on a per-flow or per-ip basis, on egress, or whether it's managed on a per-port basis on ingress from the customers to their ISP.
I just went through a very long (about two months) trouble shooting session with Charter after moving to a new town. After getting the personal cell phone number for a local plant supervisor and keeping in touch with him during the time it took to fix things I got some information out of them. They try to keep their lines at 80% capacity all the time. They do have traffic shaping in place though he wouldn't be specific or didn't know. They don't throttle customers, they do disable power boost and more tightly restrict bandwidth to the plan the customer uses during peak hours. Which tools they are using to manage these restrictions I don't know.
Since they've finished the DOCSIS 3 rollout here last week I've considered upgrading to 60/5 from my 25/3 plan but it's pretty over priced and would be much more worth it at 60/10 or 60/15. During the period of trouble (not enough bandwidth for their inter city link where they actually do their peering) I was down as low as 1Mbit/s during peak hours on a 25Mbit plan.
if we are now paying $X for $Y GB of data, why doesn't it roll over like Minutes or a persistent commodity.
This will usher in a 'pay what you use' scheme, not unlike long-distance phone bills back in the days of yore. (you transferred $Y GB this month, so you owe us $X dollars.)
If an ISP throttles they should be required to say they are doing so to you the customer and indicate it to you in real-time.
You're paying for a service and if the company you're paying considers your use in violation of the terms agreed to they should indicate to you that you are in violation not some sneaky restriction you never know about. In fact I bet people have called their ISP and played the "it's not me it's you" game when it's actually the ISP throttling their customers.
hard caps generate revenue, while rate limiting heavy users doesn't.
Rate limiting heavy users at peak times has exactly the effect on the customer base that an ISP should want. Exactly the subpopulation of users they don't want gets an incentive to leave, and everyone else stays and talks about the smooth, uninterrupted service and "unlimited" bandwidth.
Just yesterday I discovered that Clear does this. Unfortunately they lower one's bandwidth to 0.25Mbps and keep it that way for days or weeks. Excessive to Clear is also as low as 5GB in one day.
My I.S.P. (Frontier) wanted to cap DSL at 5 GB a month!
I'm not against metered billing, in principle, but the rates would have to be reflective of what it costs to provision the marginal bandwidth.
The bandwidth cap issue highlights two crises that the industry faces: (i) the nature of fiber optic networks is such that it's several orders of magnitude cheaper to move data between hubs in major cities than it is to move it over the "last mile" to the consumer and (ii) video streaming from Youtube, Netflix and other providers is starting to provide real competition for cable television.
(i) leads to pricing schemes that don't reflect the cost of provisioning services; installing the "last mile" might cost a few thousand dollars up front, but this gets amortized over bills that a customer pays over a long time. Upgrading a customer to a higher speed tier is the only way that the ISP can offer "better service for more money" to a customer but the increase almost certainly won't be reflective of the difference in costs. As we've seen in the airline industry, crazy pricing leads to pathology in the long time.
As for (ii), ISP's can't be seen as good actors when they are in the competitive cable television business. As customers turn on to streaming video, utilization is outpacing the rate at which ISPs want to invest in infrastructure -- and in the long term, the many ISPs which are cable providers realize that customers who've got access to Netflix and other streaming video services might decide they don't need to blow $80 a month for 500 channels full of crap.
(ii) is a real threat to the cable companies. My apartment building pays for basic cable, but I haven't even hooked up a tuner the entire time I've lived here. I pay for Comcast's 50Mbit/s plan and get my video from Hulu/Netflix/YouTube, and yet YouTube still stutters and buffers frequently.
you bet. one underlying problem is the pricing model. you get "take it or leave it" packages that were negotiated by guys in suits between cable companies and content owners (who are often different units of the same business.)
as a result, you pay for Fox News when you pay for basic cable in many places, but you can't get Al Jazeera English. The consumer's got no way to say "I don't care for Spongebob Squarepants" or "I don't want my kids watching those stupid live action shows about rich kids that are on the Disney Channel" short of withdrawing from the system alltogether.
With no market discipline on the individual channels, they can keep sucking worse and worse until people eventually give up on the whole package.
Why can't people apply non-internet concepts to the internet/ISPs? Do utilities give you unlimited electricity, gas, and water? Of course not. Does everyone who goes to McDonald's pay a flat fee of $5 and get as much as they want? Resources are scarce and the people who voluntarily provide them shouldn't be required by law to provide it infinitely without charging more or capping usage.
No one is saying caps, in principle, ought to be illegal, the argument you seem to be attacking.
The article is arguing that the caps are out of sync with the actual scarcity of the resource. Prices are rising and caps are dropping, even though bandwidth is becoming cheaper and more available. That suggests the caps aren't being used to make people pay for resources they use, but rather to trick people into spending money they didn't realize they'd be on the hook for. That's sneaky and skeezy.
It's like the banks that charge a $50 overdraft fee on each of six trivial transactions. No one is saying there shouldn't be a fee, but if it's turning into a significant profit stream, something's not right.
My point is also to counter the outrage over usage-based pricing. What is so unfair about the idea of ISPs charging per/KB similar to how an electric utility charges per/KWh?
Prices are rising for services and commodities in almost every industry. For instance, cotton has hit record highs this year, food is more expensive, gas is higher, etc. We're in an inflationary economy right now, so I don't think ISPs should be singled out for raising prices as their costs increase (e.g. they have to pay rising utility costs, salaries/benefits/health coverage, property taxes, etc). Perhaps what should be examined is change in net profit margins for ISPs that cap usage, but even if that rises, it is hard to know with certainty if the "sneaky and skeezy" "tricks" were the factor. One could argue if their tactics are indeed so "sneaky and skeezy" that they would loose business in the long run and negatively impact their profit margin.
My point is also to counter the outrage over usage-based pricing. What is so unfair about the idea of ISPs charging per/KB similar to how an electric utility charges per/KWh?
I don't have any problem with usage based pricing. ISPs don't really want that either though. They want to push users to a high priced tier and then hope the users don't use the entire bucket each month.
Look at AT&T cell phone data plans for example. They used to have a $30 plan that was 'unlimited'. This plan really had a soft cap of 5GB, so $6/GB. I find that a very fair price. Then they changed to 2 plans, one for $15/250MB or $25/2GB. I bet they did some analysis and found out that most users use 300-500MB/month so they made the plans to push people into the higher plan with the hopes they would not use the data. If they were really concerned about high usage they would have just moved to a flat $6/GB (or something similar), but then most people would ended up paying $6-$12/month.
I'm not sure utilities are a good comparison point for two reasons. The first is that the marginal cost of internet data is near zero while the marginal cost of electricity generation is not. Secondly, utilities generally are more highly regulated than ISPs.
The reason it can be distasteful when an ISP raises its rates or limits its services is that ISPs often have a monopoly over many of their customers. At best most people get to choose from a duopoly, so the ISPs don't really have to compete in a free market.
The marginal costs of commercial software is even lower, but most vendors charge in a mostly linear manner; it's not like they decrement their prices for each sale they make to keep a steady cost-to-price ratio. Why should they? If enough people want to still voluntarily purchase their product/service, they should continue to try and make as much money as possible. If their are few good options, then the market is ripe for competition to help bring the incumbents back to offering better values.
Isn't this a site revolving around entrepreneurs in IT? Doesn't everyone want to make more money then they spend?
If the market was actually open for competition, then there would be alternatives and no-one would complain about caps, they'd just move to another provider.
The fact that bitching about the caps is people's only option should tip you off to the fact that the market is not, in fact, open.
There is definitely competition, but even if there wasn't, that would mean that the existing provider was good enough. What's stopping more alternatives from appearing besides this? Probably looming legislation more than anything. If you really hate it, instead of spending your energy lobbying for regulations, go start your own ISP that gives everyone the world for a lower flat rate. I'm sure you'll stay in business for a long time.
In countries where there is actual competition between ISPs, such as Sweden, and other parts of Europe, there are no caps. And our ISPs don't seem to suffer for it. I'm sure they'd love to have caps, but the first one to do it will just start bleeding customers, and none of them can afford that since the market is saturated.
I have a throttle cap on my mobile internet though, I can use as much internet as I like on my iPhone for a flat fee, but if I go over 5GB in a month, they may throttle my speed for the next month. That's pretty fair, I guess, but they're building out 4G now with even faster mobile internet, so those caps are probably going to disappear slowly as people move over to newer technology with more bandwidth than the current 3G/EDGE systems.
Where I am, I can choose between nine different ADSL providers, one cable provider, and about six different mobile broadband providers. All of them want me to switch to them, and they differ slightly in pricing, bundling, triple-play, customer service, speed, etc.
That's not what I'm asking. I have multiple providers of DSL internet, cable, and mobile providers, all with varying services, pricing, etc. Each one applies caps.
Where you are, are their lies that affect providers in that area? Or is it all pure competition?
Did those 9 ADSL providers all lay their own line, or is their laws in effect that make those providers lease their lines out to other providers?
The copper network is owned by TeliaSonera, the former state telephone monopoly, but they were forced to open that up to competitors so anyone could install DSLAMs in the phone stations, etc. There's competing national fiber networks as well, so no ISP has a stranglehold on the DSL market.
There's no competition and choice for cable though, you have the cable company you have, and that's it.
For GSM networks, there's three separate, and two or three 3G networks, so there's competition there as well.
In a few months my house is gonna be hooked up to the city fiber network, at which point I can choose from another bunch of ISPs.
Yeah it goes both ways. The users who barely use their internet connection, such as grandmas that check their email and look up a recipe a few times a week, are subsidizing the users who are streaming Netflix in high def for 3 hours a night.
I'll pick on at&t uverse since that's what I've got, and since they're the latest to join the transfer cap party.
Those grandmas are not paying $65/mo for the top service tier. They are paying $35/mo for 3Mbit/s lowest-tier uverse service, and they still get a transfer cap of 250GB.
Streaming netflix users, who are pretty much all going to be in the top tier or two of service (24Mbit/s or 18Mbit/s) get pinched by the same cap. 250GB is 3.2% utilization of an 24Mbit/s download link, over a month, btw.
Even in some alternate universe where caps make sense, the least AT&T could do is grade the caps by line speed. It seems to me like I'm subsidizing grannie's transfer allowance, even if she doesn't fully use it.
Since the primary issue is traffic congestion at peak usage times, the obvious solution is to rate limit heavy users, rather than punishing them with hard caps which indiscriminately targets users who transfer lots of data in off hours.
Given all that, why does AT&T cap all uverse tiers the same? The first explanation that comes to mind is that they know if they drop the caps too much for lower tiers, because despite what they claim 250GB really isn't that much, they'll start cutting into too many grannies' modest internet usage. They want to keep their low-end customers from being hurt by lower caps, but they want to gouge their higher-end customers for going over the same caps.
And why do they cap instead of rate limiting heavy users? Rate limiting doesn't make them money. Caps might (though they will lose some customers over this outrage, and others will cut back usage or service tiers, so AT&T might even lose money overall).
People seem to assume that it's out of "greed" that they're doing this. Just look at how much the executives are making, and all that. They don't seem to buy scarcity as a legitimate argument.
Artificial scarcity is not real scarcity. When you have the ISPs taking federal money and blowing it on themselves, merging with each other to lower competition levels, buying up media assets & suing communities who try to do things on their own terms, you start to see how underhanded a lot of the telecoms practices are.
So what happens if you start using your internet connection at full capacity 24/7, and so do all the other customers of your ISP?
On the kind of fast connections you have over there, you could easily run up hundreds or even thousands of dollars worth of bandwidth charges for your ISP. Will they just operate at a loss, or will the government step in and pay the bandwidth costs, or will they throttle your speed down?
Not necessarily. If everyone tried to use the connection at full capacity, they wouldn't succeed since the backbone and international connections are bottlenecks at a far lower capacity than the collective theoretical bandwidth of all local users. So if a million Swedes tried to download from YouTube at 10Mbps each, you can be sure there isn't a 10Tbps pipe to deal with that, and so every user would end up with slow, sluggish service. Just unmetered.
There wouldn't even need to be any explicit throttling - when a site gets slashdotted or whatever everyone trying to access it slows to a crawl, but it's not because individual user's ISPs are throttling them. An ISP that was saturating its outbound links might drop packets according to some algorithm to ensure "fairness" rather than at random, but that's still not throttling, that's "our network is too congested to keep up with demand".
It's more than just lack of competition. What's happened is all cable television and phone companies have realized they are completely fucked. The Internet is way more disruptive than they originally thought. With VOIP and Netflix/bittorrent nobody needs a phone or television anymore. So there is a conflict of interest growing among the only companies that are providing broadband internet.
These companies don't want to be relegated to simple utilities with low profit margins, and so they are doing everything in their power to keep the cost of data rising even while their cost of the bandwidth drops by half each year. With bandwidth caps and usage-based billing at 5000% profit margin they are simply begging the government to crack down on what ends up being highway robbery.
Competition for the sake of competition doesn't necessarily make things cheaper. If you have to make three copies of the physical infrastructure, that's not cheap.
I've seen business plans for rural wireless internet projects and typically the economics work out if you can sign up all of the customers in an area but if you've got to split them with the phone company and a cable company you can't pay for the tower and charge an affordable rate.
Now, I know a guy who owns the patent for "virtual geosynchronous" satellites that would have about 1/3 the latency of today's satellite internet connections and drastically increase the availability of satellite bandwidth. Despite having a patent portfolio that covers many aspects of the system, he can't get to first base when it comes to finding a few $1B to build the system.
Incumbents in this space, however, are happy to keep selling satellite "fraudband" internet and hundreds of crappy TV channels.
I'm hoping that a silver lining in the recent Tory victory is that the door could be opened to greater competition. The big telecom companies in Canada have had their way for too long, and the quality of our internet service has suffered mightily for it.
"Competition" is a funny old concept. When we're talking about competition among telecoms, it's usually strongest in countries where the government has mandated that owners of network infrastructure must allow resale. A hands-off approach from the government gives you natural monopolies, because that initial cost of building the infrastructure is so high.
Every supermarket chain in Germany has their own branded mobile network reseller with prepaid SIM cards, and prices keep going down.
One day we'll have a solid wireless option that can compete with physical lines. It will be just as disruptive as cell phones were to land lines. That's the only way you get around the massive barrier to entry that is running physical utility lines. One day.
I'd argue that it's much more than 12. That would be ~20 GB/movie. I don't think Netflix's HD streaming is anywhere near Blu-ray quality. My roommates stream Netflix all day long and our usage has yet to break 200 GB. Not that I'm defending Comcast...
How many ISPs actually enforce their caps? Genuine question- my ISP, Cox, technically has about a 100GB limit, but I know I've downloaded close to 1TB in a month with no overages, throttling, or anything.
I had no idea data caps were this frequent. I am all about net neutrality and the more selective throttling and data caps our data providers implement, the less innovation we will see.
Here in Australia, pretty much EVERY broadband provider has caps (there is only one I know of that gives unlimited, although I can't get this because the companies DSLAM isn't in my exchange). Don't even get me started on mobile internet caps.
That seems like a more reasonable option than hard traffic caps. It's no surprise more wired ISPs aren't using that strategy, though... hard caps generate revenue, while rate limiting heavy users doesn't. That wouldn't be such a problem if there were healthy competition in most metro markets, but there isn't.
Verizon FIOS is one of the few good [fast] U.S. wireline ISP options left that doesn't cap traffic. It's too bad many markets are still de-facto duopolies (from the days when there was a meaningful distinction between "telephone" and "cable" companies aside from layers 1-2). FIOS isn't available here, and if it were I'd switch in a heartbeat because of AT&T's incompetence [2].
[1] http://www.tekgoblin.com/2011/02/03/verizon-to-throttle-high...
[2] http://leaf.dragonflybsd.org/mailarchive/users/2011-02/msg00...