Why do some ISP's have bandwidth quotas?

[Joe_Greco]

>That's approximately correct. The true answer to the thought experiment
>is "address those problems, don't continue to blindly pay those costs and
>complain about how unique your problems are." Because the problems are
>neither unique nor new - merely ingrained. People have solved them
>before.

"Address those problems" sounds quite a bit like an old Sam Kinnison
routine, paraphrased as "move to where the broadband is! You live in
a %*^&* expensive place." Sorry, but your statement comes across as
arrogant, at least to me.

It's arrogant to fix brokenness? Because I'm certainly there. In my
experience, if you don't bother to address problems, they're very likely
to remain, especially when money is involved on the opposite side.

> > And about the local tail, that's also 5-10 times higher than normal in the
> > western world, I don't see that being motivated by some fundamental
> > difference.
>
>The fundamental difference is that it's owned by a monopoly.

Bingo. So, how do you propose an ISP in Australia fix the political
structure, and do it in a timescale that fits your expectations?

I have no expectations for them, and therefore there's no required
timescale. However, apparently I am not the only one to recognize that
a problem exists. Upon a minor amount of further research into the
issue, it appears that Pipe Networks, VSNL, etc., are working on a new
cable, a project referred to as "Project Runway", to connect Australia
to Guam at multiterabit speeds - so it may soon come to pass that the
current off-continent duopoly for bandwidth may need to adjust somewhat.
That could represent one significant problem - solved in a year or two.
The local political problem - well, I have to note that "political" !=
"technical", and politics can be affected, whereas technical problems
tend to organize them into problems that can be solved, and problems
that cannot.

>Despite this, wholesale prices did continue to drop. Somehow, amazingly,
>the ILEC found it possible to provide DSL at extremely competitive
>prices. Annoyingly, a bit lower than "wholesale" costs... $14.99/mo
>for 768K DSL, $19.99/mo for 1.5M, etc. They're currently feeling the
>heat from Road Runner, whose prices tend towards being a bit more
>expensive, but speeds tend towards better too.

I should note that this applies only where the ILEC (or cable
company, for that matter) has bothered to deploy service. Unlike
telephone service, there has been no "universal service" approach.
There are large areas without service other than dialup.

Large geographic areas, yes. This isn't good. Our regulation of the
telecoms has sadly been extremely permissive when it comes to giving
up on the points that were originally part of the plan for broadband
in America.

Verizon, it's particularly sad, charges $19.95/month for dialup
that'll also tie up a POTS line, where it'll offer the lowest DSL
speeds at $14.95. And Verizon "cherry picks" the places where it
offers DSL (and moreso for FiOS) so the affluent towns get high speed
service, while the rural and poorer places only have available dialup
(and that dialup is more expensive).

I would be curious if any of the places in the world with higher-cost
high-speed service also have any sort of requirement of coverage?

Interesting question.

>Anyways, as displeased as I may be with the state of affairs here in the
>US, it is worth noting that the speeds continue to improve, and projects
>such as U-verse and FIOS are promising to deliver higher bandwidth to
>the user, and maintain pressure on the cable companies for them to do
>better as well.

Of course this only applies if you live in an inner city or wealthy suburb.

Oddly, it's reported that the cable company, which has very high
penetration rates, has boosted RR speeds throughout the service area,
and the speeds being offered exceed U-verse speeds, AFAICT. I would
actually view this as a challenge for the ILEC, though I fundamentally
dislike the duopoly aspects.

I would much prefer to see a carrier neutral last mile network here,
and I've yet to see a compelling argument that it wouldn't work if it
was given a chance, which is probably why the telcos have lobbied so
incredibly hard against actually doing it.

>US providers do not seem to be doing significant amounts of DPI or other
>policy to manage bandwidth consumption. That doesn't mean that there's
>no overcommit crisis, but right now, limits on upload speeds appear to
>combine with a lack of killer centralized content distribution apps and
>as a result, the situation is stable.
>
>My interest in this mainly relates to how these things will impact the
>Internet in the future, and I see some possible problems developing.

Do you believe there is any reason for the "Internet of the Future"
to be everywhere?

Above Vint Cerf's "IP Everywhere"?

You're concerned about video over IP delivery and
other advanced applications, but do you expect to make a video call
to your cousin who owns a farm outside of town? This question is
largely ignored in discussions about cranking the 'net to ever faster
speeds, at least in the US. I'd be interested to know how it's
addressed elsewhere in the world.

I'd like to see it addressed. I'd like to see widespread Internet
availability. At this point, it's possible to make a video call to
your cousin who owns a farm outside of town, but doing so probably
requires you to be signed up for satellite based broadband, or long
distance wireless. Both services exist, and people do use them. I
know one guy in rural Illinois who maintains a radio tower so he can
get wifi access from the nearest highspeed Internet source (~miles).
He plays multiplayer shoot'ems on the Internet, not the sort of thing
you'd do over dialup, and he's good enough that his ping times aren't a
noticeable handicap. I'd note that that was even several years ago.

... JG

[Martin1]

$quoted_author = "Joe Greco" ;

> >That's approximately correct. The true answer to the thought experiment
> >is "address those problems, don't continue to blindly pay those costs and
> >complain about how unique your problems are." Because the problems are
> >neither unique nor new - merely ingrained. People have solved them
> >before.
>
> "Address those problems" sounds quite a bit like an old Sam Kinnison
> routine, paraphrased as "move to where the broadband is! You live in
> a %*^&* expensive place." Sorry, but your statement comes across as
> arrogant, at least to me.

It's arrogant to fix brokenness? Because I'm certainly there. In my
experience, if you don't bother to address problems, they're very likely
to remain, especially when money is involved on the opposite side.

it's arrogant to use throwaway lines like "address those problems" when the
reality is a complex political and corporate stoush over a former government
entity with a monopoly on the local loop.

AU should be at a stage where the next generation network (FTTx, for some
values of x hopefully approaching H) will be built by a new, neutral entity
owned by a consortium of telcos/ISPs with wholesale charges set on a cost
recovery basis. if either political party realises how important this is
for AUs future and stares down telstra in their game of ACCC chicken, that
may even become a reality.

cheers
marty

[Steve_Gibbard]

There's a big difference between fixing brokenness and demanding that somebody else do something that might make sense in your situation but not in theirs.

People in different places deal with different economic factors, whether in terms of telecommunications, or the movement of goods, or labor.

In the US, we automate a lot of household tasks (dish washing, clothes washing, etc.) because the machines to do those tasks are cheap, and peoples' time is expensive. Many people have cars, because they can afford them, but hiring a chauffeur would be extremely extravagant. In some other parts of the world, importing machines to wash dishes or wash clothing would be considered extremely expensive. Anybody who could afford such things would instead spend $10 per month on a servant who would do what those machines do, and clean the house and cook meals. Cars, made with expensive foreign materials by expensive foreign labor, would mostly be unaffordable, but anybody who could afford one would also spend the extra $10 per month on somebody to drive it for them.

The same goes for telecommunications connectivity. In the US, we've been conditioned over the last ten years to think of long haul telecom capacity between major cities as a seemingly infinite resource with a price approaching zero, so expending extra effort to limit its use wouldn't make much sense. In parts of the world where the same long distance capacity that we take for granted sells for $5,000 per megabit per second per month, and where $5,000 represents 10 or 20 years of income for the average person, people look at it differently.

So, what drives the telecom cost differences? Distance and difficulty of terrain are certainly partial answers, as are economies of scale. But, if we look at what happened in the US, the story is a bit different. In the late 1990s, we had a telecom construction boom. Demand for capacity was surging and lots of investors wanted to invest in new capacity. There was a set of cities that were seen both as where the money was, and where a network had to be to be a peer of all the other networks. Once somebody was laying a little bit of fiber, it didn't cost much more to lay a lot of it, so lots of companies ended up burying lots more fiber than they had a use for between the same set of points. Doing that was really expensive, and the construction had to be paid for up front before the fiber could be used. Presumably, the investors assumed that once the fiber was in, it would sell for what fiber was selling for before the construction boom, and they'd all make their money back.

Unfortunately if you're an investor, but fortunately if you're an American consumer, the market didn't work that way. It became a competitive market with high capital costs, a near infinite supply of the product, and lots of competition. The fiber companies couldn't price their services to recover their construction costs, because if they had charged more than any of their competitors they wouldn't have made a cent. Instead, they priced their services to be cheaper than the competition, trying to salvage whatever money they could. The competitors responded by pricing things even cheaper, trying to make sales of their own, and the cycle repeated itself again and again as the price of capacity along those routes fell towards zero. Eventually, the construction debt went away in bankruptcy, the fiber got bought up cheaply by companies that hadn't lost everything in building it, and what it had cost to build ceased to be relevant at all.

In other words, capacity in the US is cheap because a bunch of investors screwed up. That's nothing new; it's how the American railroads got built in the mid to late 1800s, and it's how the original American phone networks got built in the early 1900s. Investors will presumably keep making similar mistakes, and society will be better off because of it. But counting on them to make the same mistake while investing in the same thing within the same decade may be pushing it.

Unfortunately for consumers, and fortunately for investors, this pattern didn't repeat itself everywhere. Those who built fiber on paths that were not seen as where the money was ended up with monopolies. They can charge far more than their construction costs, as long as they can find customers willing to pay. They're vulnerable, of course, to somebody else coming along and building a parallel cable that forces their prices towards zero, but such a cable would force its own price towards zero as well, and generally wouldn't be a good investment. Second cables do occasionally get built, but often their either on sufficiently different paths that they still provide a monopoly on connectivity to somewhere, or they're built by somebody who needs the capacity themselves.

If you're an ISP in an area served by an expensive long haul capacity monopoly rather than a cheap competitive free for all, the economic decisions you're likely to make are quite different than the decisions made in major American cities. If you can always go get more cheap capacity, encouraging your customers to use a lot of it and thereby become dependent on it may be a wise move, or at least may not hurt you much. It's probably cheaper than keeping track of who's using what and having to deal with variable bills. But if the capacity you buy is expensive, you probably don't want your customers using a lot of it unless they're willing to pay you at least what you're paying for it. Charging per bit, or imposing bandwidth caps, is a way to align your customers' economic interests with your own, and to encourage them to behave in the way that you want them to.

I should also note that those advocating "carrier neutral" fiber to the home probably won't get high speeds at low prices, as long as that "carrier neutral" fiber is a monopoly. Even regulated monopolies are generally allowed to charge enough to make back their construction costs, and if the ISPs are paying for the fiber monthly rather than up front, that's going to put a pretty firm floor on what ISPs can charge. What would theoretically push consumer prices down would be to have several competing companies build fiber to the same set of homes, that they or their post-bankruptcy successors would continue to control. We've sort of got that in much of the US, with the DSL/cable duopolies, and speeds do seem to be creeping up slowly, although not nearly as much as in some other parts of the world. The question, of course, is how to convince investors to go for such a thing.

-Steve