NNSquad - Network Neutrality Squad
[ NNSquad ] Re: [IP] Third Major ISP AT&T Testing Bandwidth Caps in the Fall [with a comment by me djf]
At 08:01 AM 6/8/2008, David Farber wrote: >I am at a loss to see how such a cap will really help. The issue is not the amount of bits you move but when you move it. Alas, as an ISP I can say that based on our observations this is becoming less and less true. We do have times of lower loads, but the difference between the peaks and valleys is getting ever smaller as users' PCs engage in more and more unattended activity. The distribution of traffic shifts; we see more long downloads at night and more interactive activity during the day. But the differential between the high and low points is already down to 20%, and it's and steadily shrinking. As we see more and more convergence -- that is, as more and more of all sorts of media and communications shift to the Internet -- I expect this trend to continue. >What [download] caps DO create is an additional cost for people who are transferring large objects across the net -- like HD programs LEGALLY. This is true. But even if the traffic is legal and they are not shifting content providers' costs to us via P2P, those users are still consuming more resources... and those resources are not free. (In fact, because we are rural, backbone bandwidth for us is almost criminally expensive -- $100 per Mbps per month compared to $10 per Mbps per month in a city or $2 per Mbps per month in a major co-lo.) So, as long as the price is fair, it is reasonable to ask them to pay more for using more. It is not necessarily a bad thing when pricing models change so that the charges customers pay are more closely related to the cost of the goods and services they consume. Nonetheless, while it is sensible to price services according to resources consumed, it may still not be desirable to price by the bit. As I stated in my remarks to the FCC at its recent en banc hearing at Stanford: >Some parties claim that we should meter all connections by the bit. But this would be bad for consumers for several reasons. Firstly, users tell us overwhelmingly that they want charges to be predictable. They don't want to worry about the meter running or about overage charges -- one of the biggest causes of consumer complaints against cell phone companies. Secondly, users aren't always in control of the number of bits they download. Should a user pay more because Microsoft decides to release a 2 gigabyte service pack for Windows Vista? Or because Intuit updates Quicken or Quickbooks? Or because a big virus checker update comes in automatically overnight? We don't think so. And we don't need to charge them more, so long as they are using their bandwidth just for themselves. It's when third parties get hold of their machines, and turn them into resource-consuming servers on our network without compensating us for those resources, that there's a problem. Thirdly charging by ! th! e bi t doesn't say anything about the quality of the service. You can offer a very low cost per bit on a connection that's very unsteady and is therefore unsuitable for many things users want to do -- such as voice over IP. And finally, a requirement to charge by the bit could spark a price war. You can just imagine the ads from the telephone company: $1 per gigabyte. And then the ads from the cable company: 90 cents per gigabyte. And then one or the other will start quoting in "gigabits" to make its price look lower, and so on and so forth. All Internet providers will compete on the basis of one number, even though there's much more to Internet service than that. > >The problem is, small ISPs cannot win or even compete in this price war, especially when -- as is true in most places -- the monopolies backhaul their connections to the Internet and thus control their prices. Again, we wind up with duopoly. (The full text of my remarks are at http://www.brettglass.com/FCC/remarks.html) As you can see from the testimony above, we as a small ISP really do not want to charge by the bit. Nor do we want to impose caps or overage charges. We'd much rather charge a flat rate, subject to terms which indirectly and painlessly limit resource use so that the service does not become unprofitable to provide. (In our case, these include limitations on the duty cycle of the connection, as well as prohibitions on the operation of servers and P2P on certain classes of service, such as residential connections.) Alas, the choice of whether or not to charge by the bit may be taken out of our hands. If we move to a "metered" pricing model, it will have absolutely nothing to do with whether or not people want to download content that competes with cable TV services, because we are not IN the video business. Rather, we may be forced to implement caps or meter by the bit by "network neutrality" legislation or regulations. We'd much prefer to have the flexibility to innovate in the area of pricing models -- and, if possible, to avoid troubling our customers with concerns that "the meter is running." But big, well monied, polished lobbyists -- some representing very large companies (such as Google) -- are at work here. Others of these lobbyists are (or represent themselves as) consumer groups which claim to represent consumers' best interests -- but do not truly understand the issues and so are advocating action which is actually anti-consumer. And since we as independent ISPs work very hard in our own businesses and are not full time "inside the Beltway" lobbyists, legislators and regulators may well listen to the lobbyists instead of doing what's best for their constituents. We certainly hope they won't. But so far, lobbyists have had the floor at all of the Congressional hearings to date, while not one of the 4,000 or more small, consumer-friendly, independent ISPs -- who are working hard to fend off duopoly -- has been offered a seat at the witness table. So, the outcome may well be beyond our control. --Brett Glass