“If the caps need o be adjusted, they can be adjusted.”

Which btw they never stated officially and couldn’t guarantee.

http://twitter.com/alextwc

Rather than “impugning the motives” of the carriers, I’m simply looking at what the incentives are that drive their actions. According to law, investor-owned companies have one obligation only, to make money. They will behave differently according to whether they are an unregulated monopoly, operating in a truly competitive environment, or perhaps as a regulated monopoly.

An unregulated monopoly will try to make the most money with the least effort or investment that it can get away with. Rather than investing in its infrastructure, it will play with its rate structure with devices such as caps, putting a damper on its customers’ use of its service – especially if it plays the rates so that users end up paying steeply for over-use.

By contrast, companies in a competitive environment have the incentive to improve their infrastructure and offer their customers higher speeds which plenty of them will willingly pay for. I’m not saying that monopolies won’t ever improve their infrastructure, just that they’ll take their own sweet time.

Any of the arguments you have made in favor of caps applies equally well to a non-capped, higher speed scenario – better, in fact, since the latter imposes no limitations on customers other than what they willingly impose on themselves.

Quote “The system that TWC floated and then withdrew is not a cap.”

It is actually a tiered series of caps involving steep over-use charges for those who step over the line.

The problem that keeps coming up here is the supporters of the Massa bill making sweeping generalizations that aren’t backed up by even simple calculations and then impugning the motives of the carriers. Some people are persuaded by this sort of thing, of course. What I find really odd is the use of the term “cap” to describe usage-based pricing. Comcast has a cap – 250 GB/mo – and if you exceed it for two or three months you’re history. The system that TWC floated and then withdrew is not a cap.

The costs of middle-mile bandwidth vary region by region, and there’s no hard rule about how much it should cost to each consumer. And it certainly is the case that transit costs are capacity-based, so the economics of broadband are very sensitive to usage.

That’s inconvenient, but true.

OK, that’s all, I’m out of here.

OK, let’s get to the core issue – bandwidth. There’s a difference between bandwidth/speed and quantity of usage. In my case, I rarely download anything that requires high speed but I listen to WiFi internet radio for maybe 30 hours a week, which along with my other use could take me well over some arbitrary cap, without my having put any significant stress on the provider’s system.

Quoting what you wrote:

“Like I said, the cost of raw bandwidth is declining, slowly, but people are using more of it. On the question of connections vs bandwidth, it’s helpful to bear in mind that each connection has a certain capacity, so the overall system has to be engineered with enough capacity to meet peak load. While it’s true that off-peak usage doesn’t cost anything measurable, increasing the capacity to meet greater peak load does have a cost, and it’s not linear.

So bandwidth is not free.”

All very true, but it’s absolutely no argument for caps. It’s logical that the telecoms should invest in higher speed and offer them for a higher fee. Unlike usage caps, paying for a higher-speed tier would be the user’s choice. Users would voluntarily limit their own speed rather than having the telecom company imposing an arbitrary cap. And I don’t think you’ll find anyone who wants higher speed objecting to paying for it.

You can be sure that usage caps will be designed so that users will often exceed their limit and pay steep overcharges. This is nothing but a money grab by which the telecoms, exploiting their monopoly positions, will be in effect charging their customers up front to raise money for capital investments which are not necessarily guaranteed to happen. In a truly competitive environment, companies would invest their own money in capital improvements and recoup their investment from customers willingly paying for better service. The cap will only work under monopoly or near-monopoly conditions and would actually be a disincentive for improvement.

So don’t try to tell people that the cap is in their own interest when it is not.

The modem and CTMS equipment upgrade for D3 isn’t going to break the bank either as pointed out in this NY Times article…

http://bits.blogs.nytimes.com/2009/04/28/cablevision-goes-for-us-broadband-speed-record/

“Cablevision has said it spent $300 million for its upgrade to Docsis 3 and the deployment of Wi-Fi hot spots for use by its Internet customers around the New York area. That investment comes to about $97 for each of Cablevision’s 3.1 million customers, or $60 for each of the homes passed. Those relatively low numbers are consistent with other reports that say the overall cost to deploy Docsis 3 is quite low compared with the premium prices that cable companies are charging for 50-megabit and 100-megabit service.”

Cablevision had no problems with modem supplies so I don’t for one minute buy that as a reason for delaying D3 deployment.

And finally…and this is all I’M going to say on the subject. Healthy competition, Congressional legislation, common carrier status, muni broadband services, FTC anti-trust action, FCC regulation……I’m for whatever means works to break free of these cable monopolies and old-school telco-think, and to push this country to the forefront of the information age rather than stagnate and watch other nations pass us by. Just ask our Canadian friends to the north how Internet Overcharging is working out for them.