For most people, higher speed isn't about being able to download more data per month. It's about their data not taking as long to download. Average use is only 50 GB/month, according to data quoted in the discussion on North American usage earlier today [1].
E.g., I have 30 mbps Comcast instead of 3 mbps DSL because when I need a 1 GB file I'd much rather get it in 5 minutes than in 45 minutes.
I want to know the distribution curve, because I bet it's a pretty flat distribution. Presumably Comcast knows that too, and that's why they even -have- that "use only 5 gigs a month and save $5", which is the biggest ripoff I've ever heard of, but which, for grandma checking her email, might make sense (provided her grandchildren never visit her and use the internet).
You are conflating two very separate issues and the statement is false. Being a top-1% user by volume does not mean that you are subsidized by everybody else.
Network costs are diven by peak usage, i.e. when there is a risk of congestion. Peak usage is during primetime and the majority of users are online then. Thus almost everybody uses the network at the same time and it makes sense to share the cost equally. Hence nobody is subsidizing anybody else.
Here's the data to back me up:
"In order to investigate these issues, we took real user data for all the broadband customers connected to a single aggregation link and analyzed the network statistics on data consumption in five-minute time increments over a whole day.The data was shared by an ISP in North America who wanted to understand its own network usage. Our analysis tracked both data consumption (i.e. total MB downloaded) and bandwidth usage (i.e. Mbps being used).
...
42% of all customers (and nearly 48% of active customers) are amongst the top 10% of bandwidth users at onepoint or another during peak hours."
Source: diffeaction Analysis http://www.fiberevolution.com/2011/11/do-data-caps-punish-th...
At the same time, I do think they're a bad idea for everyone. If we had usage-based billing ten years ago, I don't think there would be a YouTube or a Netflix. Electronic distribution of games would probably not exist. Major image sharing sites like imgur would not be nearly as popular. Webapps would be less common. People would be much more likely to delay software updates or forgo them altogether.
I think that usage-based billing does represent a major impediment to the continued advancement of the Internet. This is certainly a major blow to any future where cloud-based backups or video sharing are more common or see new applications.
Secondly, the problem isn't with 'usage-based billing' in general. The problem is that this isn't 'usage-based', because the only thing that has changed from the previous billing is a over-priced fee tacked on for people who go over the cap. True usage-based billing would allow for people to actually save money when they used little bandwidth a month, but this doesn't allow for that.
WAY back when cell phones were first getting popular I got one through my employer. It was a personal phone, but they allowed employees to get personal phones through their business plan. I paid a very modest monthly flat fee and then $0.10/minute for usage. No caps. $0.10/minute for voice sounds absurd today but then it was quite reasonable and the costs were completely predictable.
It is true that many of the people reading this thread are top bandwidth users overall, but I question whether their peak-hour contribution to e.g. Netflix congestion is any more or less than the average Netflix subscriber. I also do not accept the claim that advanced users are "subsidized" by the other subscribers. If anything, the higher monthly fees paid for 50, 60, or 100mbit/s are helping to pay for the physical costs of the lower tiered users.
That said, usage-based billing is not a terrible idea, as long as the metering is 100% transparent, standardized, and as dirt cheap as it really should be. The second biggest argument I have against metered billing is that it's mentally taxing to have to think about every bit you send and receive. The first argument against it is that it's a technique to gouge customers.
You know what, let's do that usage-based billing, the difference between 5GB and 300GB would be about 1%, because of the small cost of the shared pipe. This is just more bullshit from Comcast, unheard of anywhere else on this planet.
Maybe I'm biased, but I can't see where I went wrong.
It's not your personal pipe. The bandwidth on the segment connected to you is shared with your neighbours. Upgrading the bandwidth on your segment costs money, ergo we do not want you to use "too much" bandwidth. Pre-emptively curbing bandwidth usage with threats of and/or actual overage fees, ensures higher operating margins and puts off upgrade expenses, thus increasing profits.
Not perhaps the answer you were hoping for, but hey, corporations gotta make money, right?
The vitrol is aimed at unreasonably high fees. Quite justifiably, I might add.
The person being subsidized is the computer-illiterate person who uses no data except for during peak times and then requires several tech-support calls a month.
Usage based cost makes sense for electricity or water. If you use more, they have to send more to your house. It's not the same for bandwidth, unless the total amount is over the available bandwidth.
I have a feeling they just have more people in the "peak users" category than the "over 300gb" category, so its easier to piss off the smaller group.
With more people cutting the cords, this is only going to get worse -- people come home and watch TV. I personally don't want to pay for a 10 lane highway with 5% utilization 90% of the day just to avoid 2 hours of traffic, so I definitely don't want to pay for internet that guarantees 50 mbps or whatever even during peak hours (if I wanted that I'd lease a line - I just want a cheap connection to the internet). I don't want to pay the ridiculous cost of over engineering. I'd rather see solutions that embrace the reality of that situation.
As to metering, that might work if there were competition. But, as has been repeatedly pointed out, there is little or no effective broadband competition in the U.S.
"No capacity" has a similar spectre in the last mile as to that which was recently demonstrating in the Netflix inter-connection choking scandal. Although last mile requires more outlay than "fixing" Netflix, the money is there (currently in outrageous profits).
The major ISP's have had years -- and very significant government subsidies and other favors -- to fix this. They haven't. We need the infrastructure to keep our economy competitive. Time to (re)regulate, and to open the field up to municipal development and competition.
There are a few problems with this. Firstly, very few users are going to cut down peak usage, because it's during primetime that they have the free time and inclination to use the Internet.
Secondly most people don't even know what a GB is. Thirdly, you assume usage-based fees are meant to curb usage rather than drive profits.
> or services would offer a way to cache episodes locally during the night so you can watch them after work.
Since we are basically talking Netflix here, this is never going to fly with the DRM guys.
This is not a technical problem, as you can see, since the desided outcome can be reached, if you are willing to ignore some legal niceties...
(and fwiw, i have no interest in defending comcast. i bring this up mainly inform myself about the circumstances.)
The marginal cost to Comcast is close to zero, the question is how to account for upgrades if everybodys usage goes up enough to exceed network design capacity.
Regular folk unexpectedly think that the cost of normal network upgrades are included in this so called "monthly subscription fee", but Comcast has real accountants with actual hard copy degrees on their walls that tell us that we need additional "bandwidth usage fees" and "overage fees" to pay for it in the US.
Also, common carrier phone services only had usage charges for long-distance service.
Someone else just needs to come out with better and cheaper services. Comcast sucks and is milking their monopoloy.
Not really true. Maybe within an exchange--don't really remember. But there were certainly usage-based charges even within an area code.
Not to mention, electricity has always been usage-based. Heck, a modern desktop PC probably burns through a nickle or two as he browses as well!
Why is it OK for AWS & Google Cloud to meter by the GB, but not Comcast?
In addition, with AWS I can always switch to a cheaper provider. I can not switch to a cheaper cable company.
And that only kicks in after the first 300GB.
AWS/Google retail bandwidth prices are a bad comparison, as they are ridiculously expensive compared to wholesale bandwidth prices.
Wholesale bandwidth costs about 0.1 cents per GB. Not quite 1000X what Comcast charges, it's "only" 100X the wholesale rate.
To give you some perspective, Dane Jasper, CEO of Sonic.net said they spend about 3% of their costs on bandwidth. Please consider that Sonic is a small actor and at scale costs will be less.
Source? I've often wondered what this number is when viewed in aggregate across carriers - I can just never find it.
Just kidding. Seriously though, you are not going to see wholesale rates posted on a website. Contact your bandwidth provider and ask for a quote. For serious volumes and good pricing, expect to sign an NDA.
However, to give you an idea of lowend pricing here are some examples from FDCservers. This is not an endorsement, just a site with easily accessible prices that I could remember off the top of my head. In fact, I emphatically do not recommend them. There are much better providers both in terms of price and quality.
Remember 0.1 cents per GB equals about $0.30 per Mbps.
Asymmetrical 100G at $0.15 per Mbps https://fdcservers.net/ip-transit.php
Metered 10G at $0.60 per Mbps https://fdcservers.net/colocation.php
Unmetered 10G including server $500 https://fdcservers.net/dedicated-servers.php
Better providers like L3 are around $3/Mbps, last I heard.
So $0.001 a GB means you'd only pay 33 cents per Mbps, which seems pretty low. But maybe at terabit commits, HE goes even lower.. I've only looked at 10G commits.
Not to mention that bringing bandwidth to a DC is way cheaper than bringing it to individual homes.
We are not talking about individuals buying retail bandwidth here.
It doesn't make sense to compare retail prices to wholesale prices. If an average coder can't even get bandwidth at $0.001/GB with some serious effort, then how this this a valid point of comparison for how much bandwidth should cost for the average internet user?
I doubt you can get Level3 or Internap to beat HE prices.
It very much does. It gives you a sense of real world marginal costs, a fair assessment of fair market value (fair retail cost = reasonable markup factor * wholesale cost) and a sense of scale.
> If an average coder can't even get bandwidth at $0.001/GB with some serious effort,
If I can, you can. I've even given examples with links to order pages. Not that I recommend FDCservers, mind you.
> then how this this a valid point of comparison for how much bandwidth should cost for the average internet user?
It's a valid point because it tells you how much bandwidth ACTUALLY costs compared to what Comcast says it costs.
> I doubt you can get Level3 or Internap to beat HE prices.
How much money do you have on you? There's a bet I'd like to win.
Commit to a single DC is not the same thing as metered bandwidth to thousands of customers.
- Running fiber to a DC is way easier than running it house that could be in the middle of nowhere.
- Commit != selling bandwidth by the byte. I think you fail to understand this. I don't have the time to explain this in detail to you anymore as I've already spent more time than I wanted to writing the rest of this.
> If I can, you can. I've even given examples with links to order pages. Not that I recommend FDCservers, mind you.
Uh still wrong, and not even close even if you include FDCservers.
1GBPS $2500/328717GB = $0.007/GB
10GBPS $15000/3287170GB = $0.004/GB
Where's the $0.001/GB?
A page asking you to contact their sales team is not an example. If you are buying transit you need to be in the proper DC and you need to colo. This is out of reach for most programmers that deploy on EC2 or Digital Ocean.
> How much money do you have on you? There's a bet I'd like to win.
You're probably going to make another flawed comparison that you can get tier 1 bandwidth lower than HE by buying some absurd amount of commit. Feel free to prove me wrong with actual quotes.
http://www.webhostingtalk.com/showpost.php?s=8394951450d19c2...
AWS bandwidth usage is not an issue because when the traffic to my websites increases, my ad revenue increases too.
http://arstechnica.com/business/2014/05/comcast-plans-data-c...
We are the 98%! And charging the heavy users more makes our service cheaper.
Some of the people complaining here are elites – in technical and economic terms – and want poorer, less-sophisticated people to subsidize their outlier usage. And they're dressing this desire-for-handouts up in a righteous anger!
If they don't have competition, regulation can't always simulate the same consumer benefits, for a number of reasons. The regulators are often at the mercy of the regulated company. (The FCC, for example, is all telecom/lobbyist/party-functionary lawyers.) The regulated company tends to do fine, as their model and margins get frozen into slow-moving regulatory law. Smaller/newer companies with other models and technologies can't as easily fit into the regulatory mold, which often even bans them from offering the high-value (differentiated) services that could offer a competitive toehold. Can't have some upstart skimming off the cream from the now-tamed monopolist!
Which is why in all cases new competition, not formulaic rules from DC lawyers, should be the policy priority.
I think this argument conflates whether Comcast is too expensive with whether usage-based pricing is necessarily unfair.
Put another way, why is it ok to charge less for a capped speed but it isn't ok to charge less for a capped monthly transfer?
The best kind of rate raises are rate raises that don't look like a rate raise but effectively is one.
> Put another way, why is it ok to charge less for a capped speed but it isn't ok to charge less for a capped monthly transfer?
Because the monthly cap is far too low and the usage fees are ridiculously expensive. Combined with the fine print 95% of customers are worse off with a monthly capped transfer.
So is the complaint that usage fees are inherently wrong, or that Comcast is simply too expensive?
I don't agree that the price needs to have any relation to the wholesale cost, though. It's just price discrimination. Expensive shampoo doesn't cost more than cheap shampoo because of the ingredients.
Price discrimination is ok, if it in addition to providing a premium product also makes the good or product more affordable and available to another class of customers, thus creating a consumer surplus. Classic example: air travel.
Comcast's offering is a sham. It makes broadband more expensive for everyone. This is inherently worse.
For families the numbers seem sillier.
in swaths of the bay area, there is exactly one high speed provider
So it is disingenuous to complain that your top speed means you burn up your allocation. It's unlikely anyone is happy to pay per Mbps, so they gotta work out something which requires compromise.
Now, the limits are tiny, the pricing nuts, etc., but it's not fundamentally a terrible model. On cell data, I'm very happy to buy per GB so I can decide how much to spend.
The real downside is that capping users or offering low cap plans stifles innovation. It sounds nice to be able to "pay what you use" but that has a negative impact overall.
Wholesale rates from quality providers are about $0.30 per Mbps per month at 95th percentile. For paid transit, that is, and Comcast does a lot of peering which brings the cost down for them.
So that's $30 per month for your 100M line, even if you run it full tilt all month and manage to hit only paid transit routes all the time. That's not too bad and most people use only a small fraction of their theoretical monthly throughput.
first, the costs cited above are for handoffs at major peering points, private or public. Pulling 10Gb/s across to your apartment complex is going to add a lot to the cost, if it can even be done (right of way issues).
second, the expertise needed to realize that you can do this and then provide support for it is neither common nor cheap.
If you had a tower on a nice highly-visible location (say, the giant Jesus statue in Rio) and could do line-of-sight laser links, that would be an extremely cost-effective solution. Sadly, that sort of opportunity is rare.
Heck, smack in the middle of Seattle is a cable ISP called Wave Broadband. They have 100GB-1000GB usage tiers and even actively market that "more gigs can be proactively purchased each month." (But at least they bought out CondoInternet so the high-rise dwellers and houseboats in Eastlake can have no-quota gigabit fiber service.)
I used to work for an ISP and I totally get the concept of oversubscription. But they're saying I can only use my paid account for about one-seventieth of the month without paying extra, all while advertising all the great streaming services I can use through my account.
I could not possibly be more wholeheartedly supportive of reclassifying Comcast as a common carrier. Using fines to maintain a 70:1 minimum oversubscription model is all the proof I need that this is sorely needed.