Lauren Weinstein wrote:
[ Of course, caps carry a definite profit center bonus as
compared with throttling, at least when subscribers are being
charged extra for exceeding the caps (and especially when those
caps are relatively low). That is, a circuit that is throttled
but not capped will never bring in additional revenue since
there's no cap to exceed (and so no "excess" data to charge
for).
Note also that currently announced caps, even for similar
technology and speed circuits, are varying widely from different
companies. This *suggests* that perhaps their levels are being
set arbitrarily, or at least that's a reasonable assumption in
the absence of public data to explain how these caps and related
charges actually relate to claims of "degrading" other
customers' traffic.
A more charitable interpretation: the ISPs have no idea what cap levels
will be tolerated by consumers. So they are all guessing -- and maybe
even trying different values from what other providers have announced --
in hopes of finding out what the results are.
Too high a cap will mean that they get no benefit -- traffic continues
at rates that the ISP cannot sustain in its current business model. Too
low a cap will send users running to FiOS or DSL as soon as they get
their first bill with $500 in overage fees (and there's a good chance
consumers will refuse to pay, in addition to switching).
As for those who will simply terminate customers who use "too much"
bandwidth, one of my friends has a lovely gesture: sitting in a chair,
he holds one foot out in front of him. Then gripping an imaginary
revolver in his hand, he takes careful aim.
But of course a monthly bandwidth cap has only an indirect effect on the
ISP's biggest problem: use of a lot of bandwidth in a short period of
time, whether by P2P or by users viewing video. It's true that somebody
who does this _all the time_ will also run up against the caps. But
somebody who does it for a few hours will degrade service for others in
the area (and/or force the ISP to buy more bandwidth from upstream
providers -- if not already in a "no settlements" peering arrangement),
but won't run up against the cap. And somebody who does it late at
night will run up against the cap even though they do not degrade other
users' experience.
I suspect what's happening, though, is that the business model designed
in the 90s is simply bursting at the seeas, and all the ISPs are going
to have to tear their hair for a while until they find a new,
sustainable business model. Nothing surprising here. I commented
earlier that finding a business model that works for 5 years is a
miracle in this era of rapid technological change.
[ In a truly competitive ISP marketplace, such "experimentation"
with subscribers as the guinea pigs might perhaps be argued as
justifiable. But in the current constrained marketplace for
most U.S. Internet users (as far as reasonably-priced access
services are concerned) it's far less tolerable. This is but
another factor pointing at the possible need for regulatory
intervention in this situation. It is unfair that customer A
forced to buy Internet service from cable company Y in one area
may have a 250 GB cap, while customer B getting the same
speed service from company Z in another area is facing a 40 GB
cap -- or even 5 GB. These are enormous differences that
*will* negatively affect a wide range of Internet
applications, especially at the lower cap levels.
-- Lauren Weinstein
NNSquad Moderator ]
