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story category Wall Street Journal Tries, Fails To Cover Metered Billing Debate
Stop The Cap's Phillip Dampier graciously helps them out...
12:26PM Friday Oct 23 2009 by Karl Bode
tags: competition · business · bandwidth · Op/Ed · consumers · caps
Tipped by Bob61571 See Profile
The Wall Street Journal this week took a look at the push toward metered broadband, and while the story contains nothing we haven't covered here in exhausting (perhaps sometimes even annoying) detail, the Journal did interview Phillip Dampier. Dampier's a Broadband Reports user ( Dampier See Profile) from Rochester, New York, for whom the metered billing debate was so important -- he went off and created the completely consumer funded Stop The Cap website. It's kind of amusing to see Dampier fact check the Journal's story for them, highlighting some key points the Journal forgets to touch on -- like the fact that flat-rate pricing is entirely profitable and sustainable:
Click for full size
The article makes no mention of publicly available financial reports from broadband providers like Time Warner Cable that prove that at the same time their profits on broadband service are increasing, the company’s costs to provide the service continue to decline, along with the dollar amounts they spend to maintain and expand that network to meet demand.
Dampier also notes how the Journal misidentifies Rep. Eric Massa (who is pushing for laws protecting consumers from over-charging) and omits the potential conflict of interest in ISPs pushing for high overages while at the same time crafting massive new Internet video empires. While the Journal does note that the average user consumes just 15 GB a month (that number is even less, according to a recent Cisco study) it omits just how low many of these proposed caps have been (Frontier thinks 5 GB a month is reasonable for an entire household).

The Journal also also helps the industry make caps sound more reasonable by measuring them in e-mails sent, an annoying and silly metric used by ISP marketing departments. Most importantly though, the Journal helps sell the idea that a shift from flat-rate pricing to the industry's version of metered billing (not to be confused with pure per byte billing) is both necessary and inevitable. In reality, it's neither, and the metered billing models we've seen proposed by carriers so far are little more than price hikes disguised as altruism and fairness.

It doesn't inspire fresh confidence in the American press when a consumer covers the full scope of the metered billing discussion far better than the nation's supposed top business paper and its corral of staff writers.

Related:
  1. Time Warner Cable: Let's Not Talk About Net Neutrality
  2. As Verizon Goes, So Goes Metered Billing
  3. Time Warner Caps Go from Ugly To Invisible
  4. Cable: Let Us Experiment With Pricing Or The Internet Explodes
  5. Verizon's New Wireless Pricing Is An Insult
  6. What Network Neutrality Is REALLY About
  7. AT&T: Google Is The Enemy Of Nuns
  8. FCC Study: Open Access Lowers Prices, Improves Competition
Forums » Wall Street Journal Tries, Fails To Cover Metered Billing Debate
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badtrip
East Bay
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join:2004-03-20
Albany, CA

WSJ has a lot of fail these days.

The WSJ is a sickly shadow of its former self. These days its nothing but a right wing rag. The articles are like opinion pieces and the opinion pieces are rants.
k1ll3rdr4g0n

join:2005-03-19
Homer Glen, IL

Re: WSJ has a lot of fail these days.

said by badtrip See Profile :

The WSJ is a sickly shadow of its former self. These days its nothing but a right wing rag. The articles are like opinion pieces and the opinion pieces are rants.
It's name shouldn't be "Wall Street", it should be "Fail Street".

Sorry, someone had to say it .

dib22

join:2002-01-27
Kansas City, MO

Re: WSJ has a lot of fail these days.

i think Faux Street Journal would be more accurate
patcat88

join:2002-04-05
Jamaica, NY

Re: WSJ has a lot of fail these days.

said by dib22 See Profile :

i think Faux Street Journal would be more accurate
They only publish politically correct textbook economics that are only for suckers.

Karl Bode
News Guy
join:2000-03-02

Re: WSJ has a lot of fail these days.

Well, they do have nice illustrations.
patcat88

join:2002-04-05
Jamaica, NY

Re: WSJ has a lot of fail these days.

said by Karl Bode See Profile :

Well, they do have nice illustrations.
You are right on that point.

Karl Bode
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Re: WSJ has a lot of fail these days.

said by patcat88 See Profile :

said by Karl Bode See Profile :

Well, they do have nice illustrations.
You are right on that point.
And you know, they are "businessy." So there's that.

bender
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said by Karl Bode See Profile :

Well, they do have nice illustrations.
shocked they aren't in crayon

DownTheShore
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Can anyone seriously trust them anymore since Murdoch took it over?
NormanS
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Re: WSJ has a lot of fail these days.

said by DownTheShore See Profile :

Can anyone seriously trust them anymore since Murdoch took it over?
Can you trust any media outlet? I trust the media a little less than I trust the government. In general, used car salesmen are more trustworthy than either.
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum
k1ll3rdr4g0n

join:2005-03-19
Homer Glen, IL

Re: WSJ has a lot of fail these days.

said by NormanS See Profile :

said by DownTheShore See Profile :

Can anyone seriously trust them anymore since Murdoch took it over?
Can you trust any media outlet? I trust the media a little less than I trust the government. In general, used car salesmen are more trustworthy than either.
I adopted a philosophy early in life - "Trust no one, not even yourself."

morbo
Complete Your Transaction

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WhatNow
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Charlotte, NC

Re: WSJ has a lot of fail these days.

If the WSJ is saying to put your money here it is time to sell that sector.
gorehound

join:2009-06-19
Portland, ME

Metered billing will be the death of all innovation on the net.folks will watch their downloading to the point that they won't want to go over their asshole caps and we will get the royal screwjob.i know i most certainly will cause i am an artist and i have at least 40 gigs of stuff on my site for folks to get for free.
my holocaust memeorial documentary is 5 1/2 hours long and is available as a free download .you get to download master quality DVD and it is on 6 full DVD's alone.
interested in jewish life before,during,and after world war 2 in the carpathian mountain/northern transylvanian region come on over to www.bigmeathammer.com while you are not capped....
cause once you are would you use up your monthly allowance to download my one huge profession documentary.
NormanS
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You are quite right. We really need to put this "right wing" where it properly belongs: In jail.
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Norman
~Oh Lord, why have you come
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cameronsfx

join:2009-01-08
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said by badtrip See Profile :

The WSJ is a sickly shadow of its former self. These days its nothing but a right wing rag. The articles are like opinion pieces and the opinion pieces are rants.
Who gives a fu@# what Karl has covered here? Justin, the site's owner, is all for caps.

TKJunkMail
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Unicast HD video will drive industry to traffic cost model

"Unquestionably, the carriers erred in their initial selling of broadband with a flat rate," says Elroy Jopling, research director of Gartner Inc. "They assumed no one would use it as much as they do now, but then along came high-definition movies. They're now trying to get around that mistake."
The growth of HD video and the attempt to eventually replace multicast broadband TV (1 to many) with unicast(1 to 1) internet video will (I repeat - WILL) result in a traffic based(tier or per byte) business model. All the FCC and their rule making will do is to make sure that the access providers will make sure you know the rules upfront. No rules regulating how to charge or how much to charge for internet access will ever make it in to FCC guidelines or in to law.
--
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SLD
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2 edits

Re: Unicast HD video will drive industry to traffic cost model

Actually, if the FCC ever does its job and fosters some competition, we'll see new players provide flat-rate billing just for these scenerios, just like we see multiple bandwidth offerings at datacenters. Considering the cost of gas went down after the 1970s as it drew new players into a profitable market, Internet access will enjoy the same benefits. Of course, only if the gov't starts killing the mono-duopoly infrastruture.
pandora
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Re: Unicast HD video will drive industry to traffic cost model

This already happens even within providers. Comcast has a 250 GB residential cap. If you don't like it, get a starter business account. Comcast will even move your residential account over to a starter business account. They did this for me.

I think the starter business account is rumored to have a soft 2.0-2.5 TB cap. The cost for the starter business account is $60 a month, some manage to get basic cable tossed in for free.

Eventually, people are going to get video content over internet, and use tremendous quantities of bandwidth per month. This will impose significant costs to ISP's on last mile infrastructure.

The price difference Comcast charges from going from residential to starter business is about $18 per month. I don't consider that unreasonable.

Comcast has good reason to be concerned about IPTV. It can and will eventually damage its cable TV business. If all they do is charge a few bucks more for a much higher cap, I don't set it as a major problem.
--
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Lazlow

join:2006-08-07
Saint Louis, MO
You are forgetting that you can do multicast via internet too.
patcat88

join:2002-04-05
Jamaica, NY


1 edit

Re: Unicast HD video will drive industry to traffic cost model

said by Lazlow See Profile :

You are forgetting that you can do multicast via internet too.
You forget that 90% of routers, ISP and residential, aren't set up to do it.

Explicit multicast would be the answer to multicast problems on the internet, that way anyone can do multicast, and not just people who are a Tier 1 ISP with a grandfathered exclusive IP range of multicast addresses.

»www.google.com/search?hl=en&safe···oq=&aqi=

TKJunkMail
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said by Lazlow See Profile :

You are forgetting that you can do multicast via internet too.
But no one is doing it for residential systems.

espaeth
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said by Lazlow See Profile :

You are forgetting that you can do multicast via internet too.
You can, but in this scenario it makes no sense. Multicast is for distributing the same packet to multiple people at the same time -- there exists a similar option in the traditional TV world, they're called channels. Every viewer on a multicast feed needs to watch on the same linear time line, just like a standard TV channel.

Internet-based video delivery is about 4 legitimate and 1 questionable thing:

1) Time Shifting (watch what I want, when I want it)
2) Place Shifting (same as #1, but not primary viewing location)
3) Archived Content
4) Niche content (Limited distribution)
Questionable) "Free" programming

Time shifting is by far the largest driver towards Internet-based delivery, and it also represents the most inefficient use of network resources. You're taking content that is already being digitally delivered to your house via OTA ATSC feeds, cable QAM feeds, and satellite QPSK/8PSK feeds.... and transferring yet another copy of the same content over the network. Time shifting is better accomplished through local capture and playback using an already established stream as the source.
nasadude

join:2001-10-05
Rockville, MD
·Comcast

the ONLY reason for caps or per byte billing is to allow the ISP to charge more money.

most ISPs could simply raise prices right now, since the majority of customers are, at best, in a duopoly market, with one telco and one cableco.

however, they don't want to do that because it would destroy their fragile charade of a "robust, competitive" market, and even our somnambulant regulatory agencies might wonder why prices are going up in a "robust, competitive" environment.

NOCMan
Verizon Fios User
Premium
join:2004-09-30
Flower Mound, TX

Love this site.

Metered billing would be the death of innovation of any bandwidth intensive services on the internet. It would then be at the mercy of the ISP's would become gatekeepers of anything that required any bandwidth that has the ability to cause a customer to go over their low caps.

Online Backup - Dead (5 Gigs for 50 dollars a year from your new ISP)

Online Video (Netflix) - Dead (View what the ISP wants you to view for a fee)

Game Expansion, OS Update, Antivirus, and any number of other necessary downloads - will count against you.

Now you will pay to access the internet (Monthly fee), and then pay to use the internet(Overage Charges).
chimera

join:2009-06-09
Washington, DC

Re: Love this site.

Yeah, just like how paying for gas stopped people from getting SUVs or driving cross country.

espaeth
Digital Plumber
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said by NOCMan See Profile :

Metered billing would be the death of innovation of any bandwidth intensive services on the internet.
The same way that text message fees and cellular data plan costs prevented people from using those applications?

Yes, companies are profit-minded and will therefore charge more than it costs to provide the service. The rules of supply and demand still hold true though, if the price decreases the demand as you suggest, that leads to busts in supply which creates natural pressure to reduce the cost to increase demand again.
sonicmerlin

join:2009-05-24
Cleveland, OH

Re: Love this site.

Um...how about the same way that usage caps have killed video services in countries like New Zealand and Australia?

Internet services don`t follow a typical supply-demand curve. The curve is highly inelastic, demonstrating its utility and necessity to consumers.

espaeth
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Re: Love this site.

said by sonicmerlin See Profile :

Um...how about the same way that usage caps have killed video services in countries like New Zealand and Australia?
I assume you are referring to this; note it only talks about a single video provider having an issue.

You can't compare the network ecosystem of Australia and New Zealand to that of the US, Europe, or Asia. Base circuit costs are ridiculous, largely due to heavy government regulation and taxation of telecom, which makes providing capacity disproportionately expensive compared to other world markets. Combine that with the heavy reliance on expensive transoceanic fiber backhaul for connectivity to the rest of the world and it's obvious why they have challenges with network utilization and expansion.
Dampier
Phillip M Dampier

join:2003-03-23
Rochester, NY

Re: Love this site.

Australia's ABC-TV, the nation's public broadcaster, has also loudly complained about Internet Overcharging schemes like usage caps, and has begged to be made exempt from them so it can provide online video to Australians. Most providers have said no, and the service suffers for it.

Other providers have never gotten beyond the planning stages because the business model doesn't work in usage capped broadband. Canadian video services are a great example.

Asian broadband costs less and is faster than what we have in North America. It's also untrue that regulation and taxation is the cause of Internet Overcharging. In Canada, the CRTC has rubber stamped provider positions on broadband issues for years, and the result has been usage capped -and- speed throttled service, despite dramatic profits.

Competition, and the relative lack of it, is a much better explanation for getting away with these overcharging schemes. That was one of the big reasons Time Warner chose Rochester for its little experiment in April. We're the only city of size in New York where Verizon isn't constructing or preparing to upgrade to FiOS. When the incumbent telco ISP has 5GB of usage in their Acceptable Use Policy, there isn't much downside to overcharging consumers who have nowhere else to go.
--
Phillip M. Dampier
Editor, Stop the Cap!
»stopthecap.com

morbo
Complete Your Transaction

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Stop the Cap site - excellent info on RMT

The Stop the Cap site has excellent info on the Reverse Morris Trust and the steps being taken to close the loopholes so Verizon and other companies can't exploit the code to their great financial benefit and the detriment to consumers.

sousademiami

join:2003-02-04
Hialeah, FL

Rupert...

Is this an editorial? I can't tell, there seems to be actual research, but at the same time a huge pro-corporate slant.

Oh yeah, "News" Corp.
--
OASAASLLS

dynamicnet

@dynamicnet.net

Wall Street Journal is liberal and yet another pet

More and more newspapers and journals have gone liberal becoming pets of liberal democrats.

What do you expect anymore when the only media the White House is trying to snuff out is Fox News.

To me, that makes all other outlets, like the Wall Street Journal just another propaganda machine.

Thank you.

Jeebus Juice
Premium
join:2008-01-16
Tampa, FL

Re: Wall Street Journal is liberal and yet another pet

You do know that WSJ is owned by fox news
rahvin112

join:2002-05-24
Sandy, UT

Re: Wall Street Journal is liberal and yet another pet

Shhh, he has an ideology that he's sticking to. He believes the liberals are going to get him and that all media is controlled by these liberals. Introducing fact's contrary to this ideology just causes him to ignore them and respond by attacking the author.
vinnie97

join:2003-12-05
Mesquite, TX

Re: Wall Street Journal is liberal and yet another pet

He may have been misinformed about WSJ but O's fight with Fox News is proof of this Administration's continued attempt to control the media.
Talis

join:2001-06-21
Houston, TX

said by dynamicnet :

Wall Street Journal is liberal
You are kidding right?

1. Do you know who owns the WSJ? Rupert Murdoch
2. Do you know that Rupert Murdoch guy? He's the guy that owns Fox News.
3. Have you ever read the WSJ?
4. Did you fly in from Pluto on the red-eye?
Mr Matt

join:2008-01-29
Eustis, FL
·Comcast
·Embarq

More Bologna from the know nothings.

First of all ISP's must immediately be required under law to provide accurate usage meters in the form of a webpage that would show the amount of data uploaded and downloaded during the measurement period as defined as the ISP. The subscriber should not be charged usage for accessing the webpage. This would give subscribers a picture of the amount of data they are uploading and downloading so they would have accurate information if they wanted to comment to a regulatory agencies about any proposal for CAPS.

I know many readers of this newsletter will recommend various metering applications or firmware to be installed in the subscribers router or computer. I say Bologna. Why shouldn't the ISP's be required to provide an accurate way for the subscriber to determine the amount of data that the ISP claims the subscriber has uploaded and downloaded. After all many cell phone providers allow the subscriber to check the minutes used on the fly.

The FCC should monitor the accuracy of the ISP's metering system. The FCC should require ISP's to register their metering systems and prove that the system they are using is accurate much in the way Telephone Equipment had to be registered under FCC Part 68 Regulations to prove that it did not harm telephone's network. After all power companies and Gasoline Stations are required to calibrate their meters and prove them to be accurate.

The FCC should consider prohibiting ISP's from charging subscribers for overhead and data uploads and downloads required for maintaining the security and proper operation of subscribers computers. This can be easily implemented by registering the IP Addresses of servers used to download critical updates as exempt. ISP's would be prohibited from charging usage for accessing those websites, otherwise subscribers might skip downloading security updates. Why should accessing the subscribers computer system security or other update website be charged as usage.
grouchy951

join:2000-09-23
Chicago, IL

Re: More Bologna from the know nothings.

Personally, I wouldn't trust the ISPs meters.

I would want to have both a local meter and their version for comparison.
WhatNow
Premium
join:2009-05-06
Charlotte, NC

Re: More Bologna from the know nothings.

I use NetMeter »www.metal-machine.de/readerror/

On the screen all the time. It is interesting Matt wants net neutrality but wants update sites exempt. If ISPs are to be dumb pipes then they should not be made to pay for all the equipment to tell one site from another.
How about i move into one of you guys home it would save me a lot of money on house payments. Any company can build a network but every time they try they find out there is a lot more to it then what you see. I don't like to pay monthly bills any more then the next person but I contracted for the service so I can pay the bill or do without. I have one ISP choice or dialup. I know people outside of small towns do not even have my option.
What you guys want is regulated competition by big government.
sonicmerlin

join:2009-05-24
Cleveland, OH
Metering doesn`t even make sense, since they don`t purchase bandwidth based on aggregate demand. A `bandwidth hog` doesn`t cost them any more than does grandma watching youtube at 8pm.

JakCrow

join:2001-12-06
Palo Alto, CA


1 edit

Once again, the U.S. gets it wrong

Businesses in the U.S. have become too big and too powerful and they are destroying innovation and growth in this country. Corporate America believes it can make all these bad decisions STILL BE entitled to unlimited customers and cash. In a healthy market, there would be enough competition to prevent metered rates or data caps, but we've allow too few have too much. Competition in the U.S. has a sickness and if this keeps going on, competition will be on its deathbed.
idknow

join:2009-10-23
Punta Gorda, FL

"new" billing models?

The article reminds me of the old billing model used by telephone companies before hi-tech and satellites changed everything.

So, in that light, the new telecoms are desiring to return to the old, captive audience, pay through the nose (node) models?

there's so much to look at and read on the net, that I could easily download 5 gig per day! I have a terabyte of disk space now and hard disk prices are dropping, especially on the discontinued stock models that eventually appear at a store near you or even at online stores.

John McCain is on the wrong side of the net-neutrality issue. Throttling, that is, interfering with our ability to download content/files (it's all downloading, reading, viewing, pick any adjective) isnt right. They're all making profits; their costs are decreasing. What else do they want? more MORE and MORE!!!

Enough is enough!

jmorlan
Hmm... That's funny.
Premium
join:2001-02-05
Pacifica, CA

Meter email uploads

The metered billing plans are totally misplaced. Instead of metering user downloads, there should be a cap on uploads. Not all uploads, just email uploads.
--
This is not a rehearsal.

joetaxpayer
I'M Here Till Thursday

join:2001-09-07
Sudbury, MA
·Comcast
·Comcast Formerly ..

The Meter?

WSJ missed the larger point for many. Most people really don't know their usage. 250GB, 50GB, what does it matter unless there's a meter on line that one can view.
Comcast would have far fewer upset customers had ther put up the meter and announced that a cap would be implemented 2 months hence. 99.9% of their customers would have seen they were nowhere close to the cap.
Dampier
Phillip M Dampier

join:2003-03-23
Rochester, NY

Re: The Meter?

said by joetaxpayer See Profile :

WSJ missed the larger point for many. Most people really don't know their usage. 250GB, 50GB, what does it matter unless there's a meter on line that one can view.
Comcast would have far fewer upset customers had ther put up the meter and announced that a cap would be implemented 2 months hence. 99.9% of their customers would have seen they were nowhere close to the cap.
The problem with usage cap regimes is that once firmly in place, nothing assures you the industry doesn't start a limbo dance, gradually reducing those caps and exposing more people to overlimit fees and penalties. Bell Canada did that and also sells "overlimit insurance" to protect Canadians who do manage to go over the limit. Nice racket, there.

Comcast threw a 250GB cap on primarily as a response to the FCC telling them no on their network management of peer to peer traffic. In reality, Comcast customers do exceed that and still don't get called out by the company. They seem to only chase the top few offenders in each division. Comcast also will informally tell customers they can buy another residential account if they want to exceed 250GB. They are by no means the worst offenders of Internet Overcharging. Imagine if your ISP set your limit at 5 or 40GB (Frontier and Time Warner Cable, respectively, both not currently enforced or shelved)?

As consumption billing schemes like this become a revenue center, it's in the best interest of providers to increase the revenue they can earn from them, especially in markets without strong competition. That means they can tinker with them to force more people to pay higher prices.
--
Phillip M. Dampier
Editor, Stop the Cap!
»stopthecap.com
Forums » Wall Street Journal Tries, Fails To Cover Metered Billing Debate


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