Chief cable lobbyist: data caps were never about network congestion, always about profit


#1

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#2

That was pretty obvious when the CRTC made Bell Canada disclose their congestion figures in 2008 when they were throttling not just their own customers but customers of other ISPs that had to use the same last mile.

http://www.dslreports.com/forum/r20690166-The-Bell-Disclosure


#3

Well, gosh.


#4

I know it’s been posted a bunch, but it’s one of the best discussions of the topic:


#5

So where’s the class action lawsuit?


#6

You mean to tell me that companies care more about money than their customers? Now that I find hard to believe. Next thing you know you’re going to tell me that companies care more about money than their employees. But that, obviously, will never happen.


#7

You know, this is like the Conservative, right wing echo chamber.

I like a lot of what you guys say, but you’re wrong on this.

if 1% of the users double the aggregate cost of providing a service, the pricing model needs to change.

The US market has always been distorted by the fact that Carriers historically provided free interconnect agreements between each other. Out in ‘the world’ you realise that providing the customers access to another network can be ruinously expensive. Here in Australia, the cost is driven primarily by a) local access rental and b) International interconnect via sub-sea cables, which are multi-billion dollar investments run by people who are very keen to recover their money. I suspect as the rest of the internet grows around the world, this cost will apply more and more to the US.

I hate caps as much as the next fellow. But presenting it as Price Gouging is just plain wrong.


#8

I do like seeing new things on bOINGbOING. And I never expected to see that sentence! But maybe it’s not very accurate.


#9

You get the occasional rightwing troll, but as far as things go on the internet: rightwing is one of the things i’d never pin on boingboing in it’s current state for articles or comments…


#10

Lol, I don’t mean is a right wing position. But there is a blindness to it, I. E. Because it is about profit, it is bad. Much like righties see everything through a prism of ‘left=evil’, I think it’s also incorrect to see everything through a prism of ‘profit = evil’

It’s all about context. Change the word profit (in the headline) to ‘profitability’ and I think it is instantly less sinister. Caps are about profitability, not congestion. Sure, there is always some cross subsidisation among ISP customers, but caps are one possible solution to the guy who goes through an ‘eat all you can buffet’ with a wheel barrow…


#11

It’s gouging. They increase rates by increments every couple of months and then they want to charge more on top of that with data caps. Sorry, but the cable company here is HIGHLY profitable. Add to that the fact that they lied about congestion in the first place.


#12

Michael Powell used to be the head of the FCC. Now he’s the cable operators’ chief lobbyist.

Not to mention he’s Colin Powell’s kid Which means there’s not a door in Washington he doesn’t have a key to.

God Bless America


#13

Gotta love artificial scarcity. Hey, it worked for beanie babies (for a while, anyway).


#14

The dslreports piece claims 90% profitability, which makes providers sound hugely greedy, but they don’t cite anything. I have a lot of difficulty believing that providing internet is 90% profitable. Infrastructure is expensive. Even if some infrastructure is state subsidized, companies still spend billions on it.

Looking for actual data led me to this Op-Ed piece in the NYT, penned by someone working at what appears to be a reputable and non-partisan think-tank, which included the following quote:

Critics have also focused on price and profit, claiming that America’s broadband companies earn windfall profits at the expense of customers. But company financial reports show that American providers are four times less profitable than their European counterparts.

It also appears that claims of high profitability rest on gross profit margins, which do not take into account infrastructure costs; it’s no surprise the numbers are high if these costs are excluded.


#15

Not buying it. If they had nothing to hide, they wouldn’t need to have lied in the first place.


#16

not knowing the actual numbers i still want to agree.

did their lobbyist misrepresent some numbers just for gains in stock price? unless their infrastructure is cost free… or mostly free. then again, what does cost matter?

how many versions of ‘books’ would it take? both sets cannot be accurate (little cost or significant expense). claiming significant expense would hurt stock value but reduce tax liability. misrepresentation of those costs as negligible would help stock value and be dismissed as a mistake to tax authorities. does make it look like they always lie in their favor.

just press releases would get this kind of scratch my back reporting. however, this lobbyist was hired from the federal government that taxes, regulates, and (in part?) subsidizes their industry. my capability to understand absolutes hurts me here. it really starts to seem like the petty criminals controlling the governments of the world never stopped expanding to steal from every and any aspect of modern society.


#17

Not buying it. If your chief objection is that they lied, then why would you lie in the first place and claim they are “HIGHLY profitable”?

In other words, there’s some terrible, factually-unsupported logic going on here.


#18

I’m not lying. They lied and I still believe that they did it to hide something, and that thing is always about money. I’m sorry but I don’t feel like digging up the cable company’s earning , but the owner is one of the richest men in the country. It must be from all the losses.


#19

It’s possible for different individuals to sincerely have different beliefs. Its also possible to have multiple beliefs. I love my girlfriend because she’s beautiful and smart. Was I lying when I said I loved her because she was smart, or am I lying today when I say I love her because she’s beautiful?

What cable company are you talking about? Who is “the owner” of this cable company (which is probably a public company)? If the CEO of GM is rich, does this mean that car manufacturing in the US is highly profitable? What about Bank executives getting huge bonuses for booking losses?


#20

Pricing based on usage is not totally crazy - the cost of providing the service is roughly constant, independent of usage, up to the physical capacity of the infrastructure, but the amount of data that a customer is using is an indicator of the utility of the service to the customer - if a customer finds something useful, it makes sense that they might be willing to pay a premium for it.