back to article Report: US telcos cashing in on data caps and poor competition

The increasing use of data-capping and high data charges on US networks is less about easing network congestion or funding investment and more about increasing profits, according to a new analysis by the non-partisan New America Foundation think tank. "Data caps encourage a climate of scarcity in an increasingly data-driven …

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Meh

Is this exactly what EE is trying and doing to us in the UK?

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One small problem

A fair share of those increasing profits goes to buying "campaign contributions" of various Sinators and Congresscritters.

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Anonymous Coward

Facebook...

... are I assume getting a bung from the US Telecos in return for implementing compulsory video adverts in the news feed

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more about increasing profits

In other news - researchers discover fire hot, pope catholic and bears shit in woods

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You're right, the UK is very competitive. Tomorrow I'm moving from Plusnet's Unlimited package (totally unlimited, around £21/month) to Plusnet's new Unlimited package (totally unlimited, £9.99/month), same ISP, better plan (no throttling) over 1/2 the price

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how to tell Verizon to f__k off

Page Plus Cellular piggy backs on Verizon's voice and 3G data network (which at least in my area is the best by a long shot) but charges far far less. You can even continue to use your existing Verizon phone with their service if you send it in for a flash. The only two drawbacks is its 3G only and their highest data plan currently is capped at 2 gig. As a pretty light user myself I am able to get away with the $12 monthly plan (250 min, 250 txt, 10 meg data) no problem and best of all no contract and can change plan at any time. It only takes a few months to save what it costs to break your Verizon contract if you are a light user like me (if you own a smartphone Verizon's lightest plan is still like over $90 a month).

http://www.pagepluscellular.com/

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UK? Competitive? Really?

Would this be the competitive UK market where the vast majority of people are served via BT copper with no opportunity for a 2nd supplier to come in and compete?

At least in the US, the 1996 telco act let people like RCN and WOW (and others) go in and build fibre/cable networks and compete head-to-head with the incumbent telco *and* cable co.

Here I have BT copper competing with BT copper (not even FTTC copper - they missed my cabinet) And a low capped wireless service for people in the boonies.

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This article pretty much sums it up pretty accurately. The good ISP's that had good speeds in the past went belly up in early 2000's, and were taken over by the price fixing ass hats that are around now. Service has gotten worst, and costs have went up. Its sad till 3 months ago I had the same exact broadband speed that I had back in 2000, but was paying more, and had a insanely low data cap thrown on...

All I know is the US has to change this, and force the companies to play fair so the consumers don't suffer, but the chances of this happening are slim to nothing with the way the government is ran.

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Flame

Uncompetitive Pricing

Agreed. I still pay around $90 a month for 1.5mbps connectivity because they're the only high speed low-latency ISP that services my area and they're fully aware of that fact. I'm sick of being gouged by these greedy bastards. I really wish the FCC would do something about it.

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One factual correction: SMS was not "an engineering function" that was left enabled and so "discovered" by customers.Since about 1982 the notion of delivering consumer-generated text messages to mobile handsets has been part of the standardization efforts surrounding mobile telephony.

Although it's easy to forget in this era of a totally pervasive internet, but in the late 1970s the idea of using phone networks to deliver text was very much the state of the art (UK's Prestel, France's fabulous Minitel). And the idea of using the gaps between time-sensitive useful data to carry less time-sensitive data was the core concept behind Teletext systems. So when any group of telecoms engineers sat down to think about new networks, of course they would consider mechanisms to deliver text messages, even if they didn't fully appreciate what those text messages might be used for (just as I doubt the people who created Minitel envisaged the large amount of smut that the system would eventually deliver)!

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Devil

Repeat after me

"Corporations are people"

"Campaign contributions have no effect on policy"

"Pigs fly"

The US has the best government money can buy.

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Anonymous Coward

"The current situation is harming US competitiveness". The original article says no such thing. Of course, this piece and the original article are just op-ed so make up whatever you please.

The original article does say "Broadband and bandwidth must continue to be thought of as an abundant resource, not a rationed commodity." Guess what? It is rationed, just like everything else in this world. Scarcity exists. Guns or butter. More/better internet or going out every Friday night. Make your choice.

I don't work in telecom and I don't live in the US, but I am a telecom investor. So here is my totally biased counter-argument to these kind of articles saying telecom companies should spend on infrastructure AND lower monthly rates... You are more than welcome to pool your capital together in kickstarter and go build or buy a telecom company. Spend all of your hard earned money on capital expenditures so everyone can watch Netflix 24/7 (don't forget to decrease their rates). Let's see how long you want to be an investor or how long your company lasts.

Or how about this one... Buy shares in (insert your ISP/wireless provider/telecom company here). As they are clearly making far too much profit, that will more than offset the excessive monthly rate you are paying. Now rather that asking someone else (me) to spend money to lower your monthly bill, you've spent your own money to effectively lower your monthly bill. That seems more fair.

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Actually I would love to see some more investment even if it resulted in higher bills. What you say is entirely true you cannot expect to spend less and get massive amounts more. If you want investment in infrastructure to increase then you are probably going to have to pay for it eventually. I live in an area which has a cable company a single 'normal copper' telco and some wireless providers. Wireless providers can't compete on amounts of data per month or even all that well on speed. The copper telco is frankly screwed, they used to be able to compete but the cable co doubled their speeds and vastly outstripped the adslmax offerings for a similar price. The problem comes with the cable offerings, they still aren't all that fast. Considering we live in a small, densely populated, mostly middle to high income area it wouldn't kill them to ramp up their offerings and charge a premium.

I believe the problem lies in them not actually having to, there's no competition so why bother. Sure they can beat out their opposition on speed but its still not up to much, their top product is 50/5 (admittedly uncapped) but their pricing is not exactly simple once you get into cross sell discounts etc. I would happily pay more for faster speeds, business products tend to actually be worse unless you spend huge amounts (like 1000's a month). I would love for google to bring fiber here, that would shake things up. The copper telco doesn't stand much of a chance, they don't have the money for vdsl \ fttp \ fttc etc so things will stand still for years.

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FAIL

hmm

I guess as an investor it is your own self interest to not have a problem with your current investments buying politicians in order to help put up even more barriers to entry by competitors. Please excuse the general public for not necessarily sharing your self interest. In addition there are knock on effects and costs to everyone including shareholders by limiting market forces artificially with laws and regulations. Funny how business types always complain about laws and regulations unless it is being used to prop up their obsolete or broken business models.

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Re: hmm

Go learn something about the competitive advantages about the telecom industry and you'll see that competitive "moats" are created from the expense of sticking coax, copper, and fibre in the ground or from the expense of buying wireless spectrum at auctions, or the huge cost of operating customer service centres and billing systems. Buying polictians... please! Get off your soapbox. Until technologies are developed and implemented to enable bittorrent-like service over publicly available wireless spectrum, these "moats" are going to exist.

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Facepalm

Unlimited data = slower connections

Unlimited data reduces the incentive for providers to upgrade the speed of connections.

* If providers can charge for data, then it incentives them to provide as much availability and faster speeds, because the results in more data being downloaded which generates more revenue.

* If providers are required to provide unlimited data, then providing faster speeds mean that they have to upgrade network infrastructure to support throughput.

In today's world where you have video streaming and torrents it is perfectly feasible to continually transmit data. Fibre being installed today is easily capable of 1Gbps (100 times faster that an average 10Mbps ADSL connection). Is a provider really going to want to take the risk of you downloading 100 times more data in a month?

For an historical viewpoint, go read about "Tragedy of the Commons".

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Re: Unlimited data = slower connections

Thing is, people are used to flat rates. The moment a competitor comes in with a flat rate, customers are gonna bolt. Thus why the big boys seem to be engaged in cartel behaviour. They squeeze out the little guys who can offer flat rates, make a captive market, and then fight it out amongst those remaining.

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Unhappy

I only hope that these idiotic caps on wired services

don't become part of daily life here in Sweden as well ! But given our propensity to take after (nearly) all the worst developments in the US and given our present government, which greatly favours corporation profits over customer interests, I'm not particularly sanguine....

Henri

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"regulators need to enforce fairer competition and make sure companies aren't artificially creating scarcity to drive up prices."

They don't need to do anything. Even home grown competitors were stamped on. The American telecoms industry has nothing to worry about.

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Depends how low the caps are

My ISP uses data caps too, however at 250-300 gigabytes per month it's not something that particularly bothers me. The problem is only when companies use 2-4 gb caps and yet advertise themselves as being the best solution for video streaming, music, etc.

They also say they'll send me a series of warnings if I was ever to approach the cap so I don't incur overrage charges. I suppose it would be possible to consume 80+ gb data a week, but I seriously doubt anyone who isn't torrenting HD movies would come close.

With Netflix, Hulu and Amazon Prime I consume between 10-15 gb / month right now so I'm not coming close to anything that would cost me.

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