Bandwidth caps
Last year, Comcast announced that they were establishing data bandwidth caps on their internet subscribers. It sparked initial outrage, but eventually the panic subsided as only an extremely limited number of users would ever reach the 250GB/month mark and some ISPs provided even less (AT&T and Verizon FiOS don't have expressed limits, but excessive levels don't go unnoticed). An additional source of ease came in the form of enforcement as those who do exceed their caps would receive a slower connection for the remainder of the billing period and a warning with their next statement (repeated offenses can result in higher costs).
Leave it to Time-Warner Cable to change the game. The company recently rolled out data caps in test markets (Texas, New York, and North Carolina) along with plans for a nationwide roll-out. "No big deal", one would think as plenty of other internet users have adjusted to their generous caps. That is until they see the actual cap: 40GB per month for their highest tier, 5GB base. To make matters worse, there isn't some slap on the wrist for overage. Instead of a warning letter or throttled down service, TWC customers have to pay for their excess internet usage with the cost per GB based on their tier (from $1-2 per GB). There is a maximum additional fee of $75 (up to 75GB beyond the cap), but that is less than many other service providers are charging for their plans featuring higher or even no bandwidth limits (I pay $35 for AT&T with my U-Verse subscription).
The justification for these caps is increase operating cost and anticipation of increased demand for high-speed internet. That sounds fairly reasonable, I suppose. But is their subscriber base that large already? Is it getting that much bigger? Does it really cost that much more today than it did, say, two years ago? No. No. And No. The first line of reasoning, the demand theory, was based off of a well-publicized Wall Street Journal column written a year and a half ago by a member of the Discovery Institute (no, really; those anti-science assholes), the first sign that it should have been immediately ignored. That piece foretold of an impending "exaflood" where internet traffic would exceed the existing infrastructure. Too bad for the author growth is significantly slower than what was used for his results. Additionally, major updates to increase bandwidth capacity are available today and at a very low cost, in the neighbor hood of under $100 per subscriber.
And that leads into the second point: operating cost. Bandwidth costs money, but not that much. In fact, despite the increase of overall traffic (thanks to the popularity of online gaming and streaming video content), the actual costs of of maintaining that traffic have been falling even for Time-Warner Cable.
So why the cap? Money. In response to a swath of negative feedback, TWC announced the development of premium tiers offering more than just 40GB per month and increasing the caps on their other plans. Including overage fees, unlimited bandwidth and service on par with other ISPs would weigh in at $175 per month (more than the significantly faster 50Mbps service offered by Comcast). EDIT: Uncapped, high-speed internet from TWC can cost as little as $150/mo versus $35 for the same service from AT&T. Instead of spending some of their revenue to upgrade their service, they can cap away and pocket the rest. It actually gives them more motivation not to improve their infrastructure, as it will "justify" the current caps as well as a future rate increase when they really do need the boost. It might just be me, but it really looks like a slippery slope.
Bandwidth caps have an interesting side effect in that large downloads are discouraged. I buy games from Steam and music and video content from iTunes, but at ~5GB per game, ~1.25GB per movie, and roughly 3-7GB depending on HD or SD for TV seasons, 60GB won't leave much left for anything else. In fact, I'd be less inclined to buy a game from Steam even at their weekend discounts if I feared going over my limit. I'd probably avoid playing online games as much and make less use of services like Hulu that stream video content up to high definition. Each download would have to be worthwhile. I'm sure such sites whose revenue is based primarily on the number of visits (advertisements) would be none too happy about such a drop in use. Digital content distributors would also feel the pain.
I am not inherently against caps, but a cap needs to provide two things to be acceptable: solid reasoning and value to the consumer. The former is one of those "cross that bridge when we get there" issues, but the point is that there may well be valid rationale to impose a bandwidth cap such as, perhaps, limiting usage so they can remove and replace part of their infrastructure for future improvements. And that would give back to the customer later in life. Another option is to offer discounts on service in return for accepting limits. For example, AT&T doesn't have a set cap, but if I agree to 200GB/mo, I get $5/mo off my subscription. The lower the cap, the higher the discount. An interesting note is that it would require ISPs investigate their capacity versus usage to determine effective discounts. Plus, it would make for one heck of a selling point when reaching out to potential customers; cheap, unrestricted access or cheaper, restricted to your liking access.
Poll Bandwidth Caps
Leave it to Time-Warner Cable to change the game. The company recently rolled out data caps in test markets (Texas, New York, and North Carolina) along with plans for a nationwide roll-out. "No big deal", one would think as plenty of other internet users have adjusted to their generous caps. That is until they see the actual cap: 40GB per month for their highest tier, 5GB base. To make matters worse, there isn't some slap on the wrist for overage. Instead of a warning letter or throttled down service, TWC customers have to pay for their excess internet usage with the cost per GB based on their tier (from $1-2 per GB). There is a maximum additional fee of $75 (up to 75GB beyond the cap), but that is less than many other service providers are charging for their plans featuring higher or even no bandwidth limits (I pay $35 for AT&T with my U-Verse subscription).
The justification for these caps is increase operating cost and anticipation of increased demand for high-speed internet. That sounds fairly reasonable, I suppose. But is their subscriber base that large already? Is it getting that much bigger? Does it really cost that much more today than it did, say, two years ago? No. No. And No. The first line of reasoning, the demand theory, was based off of a well-publicized Wall Street Journal column written a year and a half ago by a member of the Discovery Institute (no, really; those anti-science assholes), the first sign that it should have been immediately ignored. That piece foretold of an impending "exaflood" where internet traffic would exceed the existing infrastructure. Too bad for the author growth is significantly slower than what was used for his results. Additionally, major updates to increase bandwidth capacity are available today and at a very low cost, in the neighbor hood of under $100 per subscriber.
And that leads into the second point: operating cost. Bandwidth costs money, but not that much. In fact, despite the increase of overall traffic (thanks to the popularity of online gaming and streaming video content), the actual costs of of maintaining that traffic have been falling even for Time-Warner Cable.
So why the cap? Money. In response to a swath of negative feedback, TWC announced the development of premium tiers offering more than just 40GB per month and increasing the caps on their other plans. Including overage fees, unlimited bandwidth and service on par with other ISPs would weigh in at $175 per month (more than the significantly faster 50Mbps service offered by Comcast). EDIT: Uncapped, high-speed internet from TWC can cost as little as $150/mo versus $35 for the same service from AT&T. Instead of spending some of their revenue to upgrade their service, they can cap away and pocket the rest. It actually gives them more motivation not to improve their infrastructure, as it will "justify" the current caps as well as a future rate increase when they really do need the boost. It might just be me, but it really looks like a slippery slope.
Bandwidth caps have an interesting side effect in that large downloads are discouraged. I buy games from Steam and music and video content from iTunes, but at ~5GB per game, ~1.25GB per movie, and roughly 3-7GB depending on HD or SD for TV seasons, 60GB won't leave much left for anything else. In fact, I'd be less inclined to buy a game from Steam even at their weekend discounts if I feared going over my limit. I'd probably avoid playing online games as much and make less use of services like Hulu that stream video content up to high definition. Each download would have to be worthwhile. I'm sure such sites whose revenue is based primarily on the number of visits (advertisements) would be none too happy about such a drop in use. Digital content distributors would also feel the pain.
I am not inherently against caps, but a cap needs to provide two things to be acceptable: solid reasoning and value to the consumer. The former is one of those "cross that bridge when we get there" issues, but the point is that there may well be valid rationale to impose a bandwidth cap such as, perhaps, limiting usage so they can remove and replace part of their infrastructure for future improvements. And that would give back to the customer later in life. Another option is to offer discounts on service in return for accepting limits. For example, AT&T doesn't have a set cap, but if I agree to 200GB/mo, I get $5/mo off my subscription. The lower the cap, the higher the discount. An interesting note is that it would require ISPs investigate their capacity versus usage to determine effective discounts. Plus, it would make for one heck of a selling point when reaching out to potential customers; cheap, unrestricted access or cheaper, restricted to your liking access.
Poll Bandwidth Caps