Internet Bandwidth Cartel

Some people use the Internet simply to check e-mail and look up phone numbers. Others are online all day, downloading big video and music files. For years, both kinds of Web surfers have paid the same price for access. But now three of the country’s largest Internet service providers are threatening to clamp down on their most active subscribers by placing monthly limits on their online activity. One of them, Time Warner Cable, began a trial of “Internet metering” in one Texas city early this month, asking customers to select a monthly plan and pay surcharges when they exceed their bandwidth limit. The idea is that people who use the network more heavily should pay more, the way they do for water, electricity, or, in many cases, cellphone minutes. That same week, Comcast said that it would expand on a strategy it uses to manage Internet traffic: slowing down the connections of the heaviest users, so-called bandwidth hogs, at peak times. AT&T also said Thursday that limits on heavy use were inevitable and that it was considering pricing based on data volume. “Based on current trends, total bandwidth in the AT&T network will increase by four times over the next three years,” the company said in a statement. All three companies say that placing caps on broadband use will ensure fair access for all users. http://www.nytimes.com/2008/06/15/technology/15cable.html?em&ex=1213675200&en=c6d733109a942783&ei=5087%0A

That doesn't seem unfair on the face of it, but I'm pretty sure that that is not the contract between my service provider and myself when I signed up for my access. 

If the heavy broadband users get billed higher for the access they signed up for, or get slowed down to dialup speeds on a broadband contract, I'd expect the dialup providers to get a boost in their customer base.

Maybe I can start raising the prices or lowering the quality on the things I provide to the customers whose orders are hangin' - I hadn't realized that contracts were that elastic.  On the other hand, I think I'll enjoy the self-respect more than I'd enjoy any extra money I made in that fashion.

Danno, using his broadband connection pretty heavily.

Bandwidth limits and paying for surcharges has existed in Belgium as long as I've been on the internet, which amounts to something like 4-5 years. I don't see why this is particularly surprising. It's like expecting a company to charge the same for someone who consumes one litre of apple juice, and 10 litres.

There's nothing inherently evil about saying "You have a limit of 10GB per month or whatever."

The problem is that the telecom corporations have a government-granted monopoly/oligopoly.  If they all decide to simultanously price-gouge, there's nothing you can do about.

Also, a lot of telecom corporations are lobbying "We won't invest in upgrading our network unless we're allowed to repeal network neutrality".

I agree with this - unfortunately, this is rarely made clear, and all that is offered is unconditional opposition towards/support of net neutrality. Logically. pricing according to usage makes sense. Not, however, when one is speaking of gov't granted privileges.

-Jon

fsk:

Also, a lot of telecom corporations are lobbying "We won't invest in upgrading our network unless we're allowed to repeal network neutrality".

 

All network neutrality is in reality is government price fixing.

The current model of bandwidth pricing in the US is one where the light users subsidize the Bandwidth Hogs. Well, that's all falling apart because everyone in moving into Hog territory because of youtube, movies on demand and a whole plethora of bandwidth intensive applications that normal users have embraced through the web 2.0 bandwagon.

Now you have two opposing groups fighting it out in the halls of congress, those whose business model depends on 'unlimited' bandwidth and the companies who provide this bandwidth to the end customer.

And as with all appeals to the government to 'do something' one group is going to lose and the other is going to gain.

I could go on about how the thing that started this whole fiasco was an attempt by the telcoms to externalize their rising costs without having to raise end user rates by charging the content providers for unfettered access to their networks but that is divergent to the main point.

 This is reminscent of Rothbard's solution to traffic jams in For A New Liberty.  The only problem that I see with it is the one noticed above: telecom companies are state-sponsered monopolies.

 Internet Service Providers aren't necessarily providing bandwidth--they provide access to the bandwidth.  The people who have the right to charge for the bandwidth are the actual companies providing that bandwidth.  Unfortunately, government regulations will ultimately put limits on end-users, instead of encouraging bandwidth providers to increase bandwidth.

I've been expecting the internet 'commons' to be privatized for a long time now, but there's no way government can be fair about it--it's more important than ever that something close to market incentives exist to sort this thing out properly, or another valuable resource will be trashed.  This is far too complex for a small group of people to sort out for everybody.

 

I agree with the concept of net neutrality but not the legislation. Fixing it would just get the companies more entrenched in lobbying and special interest, and would end up hiking prices above a company proposal for stratified service.

But yet again, since the teles are in cahoots with the gov't already, this might be a way to stop access to information not in the State or the companies interest.....hmmm?

                                                                                    WARNING

The above statement made by user andrew is on a flagged website on the Dept. of Commerce Potential Insurgent Weblist. Brought to you by the good people of AT&T, Bell, and Verizon. Thank you.