ie:
Say 5 or 10% of people use amazingly huge amounts of data, while the rest gently subsidise.
* Comcast puts a cap, angering the 5-10% while making it slightly cheaper for the remaining 90-95%.
* That 5% of customers moves to another company. Comcast doesn’t care because that was the 5% that cost them too much anyway.
* Other companies now have MORE unprofitable users. Say 10-15% of their users now. So they either bump up their price (so low users now move to COmcast) or implement a quota (so high users move elsewhere).
* Eventually there’s only a few hold outs of unlimited data, and ALL the big users go to them. 60% of their users are unprofitable.

Unlimited DOES work, as you have demonstrated in the US for many years, and it works based on low end users subsidising high end users. It fails as soon as a couple of companies start removing their unprofitable customers. It’s possible the ISPs have no choice with the increased bandwidth use of illegal and legal video services.

I hope we find a way of encouraging the development of high bandwidth applications while implementing quotas.

…but since Bell is throttling in the last-mile (using some rather Orwellian DPI-based whitelisting) and it’s not profitable to rent last-mile connectivity from Rogers (who flat-out block encrypted connections not on their whitelist), there’s no way to avoid that.

So far, they’ve been trying to trot out blatant lies about P2P congesting their core network. (Something which, by their own figures, would mean that the throttling will only gain them two or three months of time before ordinary growth in HTTP traffic would consume the free bandwidth)

At present:
- They (and the conservative commerce minister who tried to pass the buck) are getting trashed in the papers.
- CAIP (The Canadian Association of Internet Providers, representing 50+ 3rd-party ISPs), Primus (another big telco), Wireless Nomad, Vaccination Informatique, and the Quebec consumers union have complained to the CRTC (the Canadian FCC), asking that they find Bell’s practices to be illegal in the following ways:
- anticompetitive (The throttling most aversely affects VoIP and IPTV and they’re both a telco and a satellite TV provider… and they just started up a bandwidth-intensive online video rental service)
- illegal monopolistic practices (Bell’s network is payed for by taxpayer dollars and they’re supposed to sell access to the local loop as a content-agnostic transport, not as a white-label internet service)
- violations of Canadian privacy laws (Ever wonder why the CRIA couldn’t try RIAA-style mass lawsuits?)
- CIPPIC (the Canadian Internet Policy and Public Interest Clinic) has also filed a complaint with the federal privacy commissioner.
- The Quebec consumers’ union has filed class action lawsuits against Bell Sympatico (breach of contract) and Videotron. (the Quebec equivalent to Rogers Cable. I forget why)
- …and the CEO of TekSavvy arranged a net neutrality protest on Parliament Hill last month.

At present, Bell Sympatico is bleeding customers like crazy (despite a massive ad campaign and flat-out lies by the phone agents in an attempt to scare, deceive, and bribe people into staying… my personal experience),

Given how obvious some of their lies are and how strong the response has been, My only conclusion is that Bell Canada execs think they’re still in a pre-Internet era where enough stalling and money can get you out of anything.

While I was happy with my usage habits on uncapped broadband in Japan, here in Australia I have to use a Dashboard widget to make sure I don’t go over. When the next billing cycle approaches and you still have a few GB left, you’re going to find ways to get your money’s worth. It’s bandwidth you’ve already paid for after all, as opposed to bandwidth you didn’t need on an uncapped plan.

Long answer… maybe not. The limits being tested by TimeWarner are pretty ridiculous for someone like me (using 100-150 GB/month on average), but I don’t think the rumored Comcast caps at 250GB/month could really be considered unreasonable by most people, my quick math says this is over 100k/sec every second of the month.

I do think Doug makes a good point: if caps are going to imposed, people should be able to pay for what they really use. Paying $50+/month to use 250GB isnt unreasonable, but for the tons of people who use <10GB, there should be a much lower priced option available.

In some places cable must compete with telcos over speed, so it wouldn;t fly in those areas. I’d say it’s aimed at preventing competitors from using the MSO facilities.

Everyone’s knee-jerk reaction is that caps mean more money, more money, more money and that a change in pricing would mean an immediate move to the competitor. However good business models (and I’m not saying this is the ONLY good business model or even the right model) will move into other technologies and providers. If cable is the first to do it and it makes sense (assuming they do it right), you can count on the telcos to follow in their footsteps. Bad business models speak for themselves, but don’t assume that the guys at the MSOs are a bunch of uneducated and disconnected execs. They are a pretty strategic bunch of folks (no I don’t work at a cable operator).

The bottom line here is that the folks that read this blog are the digital elite and with tens of millions of broadband customers in the US that don’t read OM daily (heathens!) and many tens of millions more that don’t use broadband at all, there’s a whole lot of strategic planning to decide on the right pricing to get the most of them online. Not everyone will be impacted to the same degree Om’s readers think they will be. Although everyone wants the best and fastest service for free, that doesn’t make MSOs or Telcos any money. Sorry, but the fact is that these guys are in the business to make a profit and will only do so if the buying public continues to buy at the rates they charge. And… they will (on both counts).

The fact is that we were all conditioned by AOL that Internet is flat rate and by mobile phone providers that usage charges and tiers are what to expect. Well, it looks like the table are turning. This is far from over, but don’t think the cable execs haven’t thought about this long and hard and don’t think for a second that the telco execs won’t ever do it if it’s successful.

Take for example their $3 Million Dollar bill:

(link)