Consumer data consumption has increased exponentially in a little over a decade. According to broadband insight reports from OpenVault, monthly household data usage has skyrocketed from an...
And I’m not arguing that. I’m arguing that it’s clear that pricing has been decoupled from consumption, but in the other direction, where the ISP’s are setting prices arbitrarily. That’s been a choice on their part, and a big reason why people like me are distrustful of any data they claim shows their case. They have been caught lying so many times before. I’m old enough to remember Comcast paying homeless people[1] to stuff a courtroom to make it seem like more people supported them (once again if they don’t have money to cover infrastructure costs, why are they instead spending their money on things like this?). There’s also issues like when they bundle unnecessary services, essentially consumers paying for nothing, like when the AG of Washington State sued them in 2016.[2] I could go on for pages about shit like this going all the way back to illegally shaping traffic with Sandvine targeting BitTorrent traffic.[3] I honestly don’t wish to and maybe you ought to do more research on how much money these companies ream the American consumer for before acting like there is any connection between pricing and consumption here.
EDIT: Further, if that’s not enough, here’s the Huffing Post with some raw data[4] on how Time Warner was making 97% profit on their internet offerings in 2015. Here’s the Wall Street Journal[5] in 2012 discussing how many ISPs had something like 90% profit on their internet offerings:
On the face of it, such offers appear counter-intuitive. Cable executives and analysts say that about 90% of the money cable operators charge for broadband goes straight to gross profits, since there are minimal operational costs for providing Internet service.
Finally, here’s a breakdown from the EFF[6] on why building infrastructure is ISP’s main cost, and that maintenance and upkeep is a sliver of costs, once infrastructure is rolled out:
Some estimates suggest the cost of deployment can be close to 80 percent of the entire cost portfolio of an ISP. Note that means operations and maintenance of the network (that includes all of the broadband usages of its customers) could be as little as 20% of the ISP’s costs. This is acutely true when it comes to a fiber to the home deployment where the infrastructure (fiber optic cable) is effectively future-proof and can be upgraded cheaply with advances in electronics.
It is worth remembering that our current incumbent telephone and cable companies have made back their initial investment costs because they entered the market as monopolies in the old days and likely enjoyed favorable financing as safe bets (nothing is safer to invest in than a monopoly). Our current incumbents enjoyed a litany of advantages for being the first to deploy. For example, many buildings as they were constructed prospectively required the installation of a telephone and cable line, which in essence gave them virtually a free ride to customers that new entrants will not enjoy.
It’s funny that I have symetical LAN Gb all over my house and beyond the initial cost it costs pretty well $0 per month to operate and maintain. My ISP gives me a limited use Gb line outside the house (and a tiny fraction of that speed on the uplink side for arbitrary reasons) and somehow it costs upwards of $100/month. That has no rational correlation to reality in terms of cost to provide the service.
Massive enterprise systems are on a daily basis maintained by reletivlely small teams of specialists, most of who never have reason to physically touch a piece of gear. That happening in dynamic environment always looking for the next big step. An ISP has a comparativly simple task to direct traffic flows for the most part dictated by automated protocols.
Federal subsidies to telcos were not intended to provide Internet service for free, but to reduce costs.
You could argue that a subsidy should reduce prices relative to what they should have been, had no subsidy existed.
But you cannot argue that pricing should be decoupled from consumption as a result of that.
And I’m not arguing that. I’m arguing that it’s clear that pricing has been decoupled from consumption, but in the other direction, where the ISP’s are setting prices arbitrarily. That’s been a choice on their part, and a big reason why people like me are distrustful of any data they claim shows their case. They have been caught lying so many times before. I’m old enough to remember Comcast paying homeless people[1] to stuff a courtroom to make it seem like more people supported them (once again if they don’t have money to cover infrastructure costs, why are they instead spending their money on things like this?). There’s also issues like when they bundle unnecessary services, essentially consumers paying for nothing, like when the AG of Washington State sued them in 2016.[2] I could go on for pages about shit like this going all the way back to illegally shaping traffic with Sandvine targeting BitTorrent traffic.[3] I honestly don’t wish to and maybe you ought to do more research on how much money these companies ream the American consumer for before acting like there is any connection between pricing and consumption here.
EDIT: Further, if that’s not enough, here’s the Huffing Post with some raw data[4] on how Time Warner was making 97% profit on their internet offerings in 2015. Here’s the Wall Street Journal[5] in 2012 discussing how many ISPs had something like 90% profit on their internet offerings:
Finally, here’s a breakdown from the EFF[6] on why building infrastructure is ISP’s main cost, and that maintenance and upkeep is a sliver of costs, once infrastructure is rolled out:
https://www.sfgate.com/business/article/Cable-giant-Comcast-hires-seat-warmers-to-pack-3226430.php ↩︎
https://fortune.com/2017/12/24/washington-comcast-service-plan-fraud/ ↩︎
https://consumerist.com/2007/10/27/damning-proof-comcast-contracted-to-sandvine/ ↩︎
https://www.huffpost.com/entry/time-warner-cables-97-pro_b_6591916 ↩︎
https://www.wsj.com/articles/SB10001424127887324073504578109513660989132 ↩︎
https://www.eff.org/deeplinks/2018/05/big-lie-isps-are-spreading-state-legislatures-they-dont-make-enough-money ↩︎
It’s funny that I have symetical LAN Gb all over my house and beyond the initial cost it costs pretty well $0 per month to operate and maintain. My ISP gives me a limited use Gb line outside the house (and a tiny fraction of that speed on the uplink side for arbitrary reasons) and somehow it costs upwards of $100/month. That has no rational correlation to reality in terms of cost to provide the service.
Massive enterprise systems are on a daily basis maintained by reletivlely small teams of specialists, most of who never have reason to physically touch a piece of gear. That happening in dynamic environment always looking for the next big step. An ISP has a comparativly simple task to direct traffic flows for the most part dictated by automated protocols.