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Yo FCC! Are You Doing Anything About Metered Broadband?

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In an effort to burnish his public image, Federal Communications Commission Chairman Kevin Martin has taken up a populist and politically lucrative crusade against the evil cable company Comcast and its nefarious efforts to block certain kinds of traffic.

Given that we all love to hate our cable companies, especially the big ones, it is a calculated bet by Martin, who is rumored to be contemplating running for the House of Representatives after he leaves the FCC. No wonder he has been campaigning hard to chastise Comcast, and perhaps censure them for an undeniably lamentable act.

My inner cynic believes that this so-called punishment is nothing but a smart tactic by Martin to show that he is on the side of Network Neutrality and a champion of open access and the people. He told The New York Times that he was pursuing this because of openness he wants to see in the networks.

“We are setting a very high bar on what network operators can do in terms of putting limits on consumers.”

I chortled when I read that and had to shake off the image of Martin as the proverbial Internet Robin Hood. The reality is that all this talk is nothing but hot air, a diversionary tactic that taking the attention away from a bigger, more evil problem that’s emerging for the U.S. Internet: metered broadband.

Metered Broadband, better even with Network Neutrality

Today for instance, Frontier, a smallish telephone company that has operations in upstate New York, decided to impose a 5GB bandwidth transfer limit on some of its DSL offerings. As my dear friend Dave Burstein pointed out earlier today, their main rival is Time Warner Cable, which also wants to charge people by the byte.

While 5 GB looks pretty sizable – Comcast claims that their average broadband subscriber only uses 2 GB per month – in reality, it’s nothing. It’s essentially two movies in HD. Once you go over the limit, the meter ticks over faster than a San Francisco taxicab. That would limit the amount of Internet a consumer can use on a daily basis, thereby limiting the amount of time people spend on Facebook, MySpace, Microsoft, Google, Yahoo or any one of numerous services.

The situation would be no different than the early days of dial-up, when the pain of dialing up prevented us from being always on the network. When broadband came along, things changed, for usage of services like Google skyrocketed, Skype came along and YouTube became part of our lives.

Of course, it helped that the growing use of the Internet increased the amount of advertising dollars being spent online. The billions of dollars in profits being raked in by web companies made broadband providers – mostly old phone companies and cable companies with reputations for pulling a fast one on customers – jealous.

First they thought that they could get rid of Network Neutrality – by charging web companies special rates to make their sites easier to access than the non-paying ones. That turned out to be a political hairball. Comcast is finding that out the hard way.

Fuzzy Math of 5 GB Download Limits

Instead, they came out with an ingenious plan: Charge people by the byte, aka metered broadband. This way no one can blame them for playing favorites, and if consumers continue to constantly use the network, then they will have to pay more and more cash. In an earlier post, we did the math on how carriers are going to gouge consumers and pointed out what you can do with 5 GB a month:

* download about 1,000 songs from iTunes. * download five full-length movies from iTunes. * watch about 500 minutes of YouTube video. * share about 2,500 two-megabyte pictures.

According to data cobbled together by Dave, since 2001 web data traffic has grown 25-40 percent per user. As we use more web-only services – Twitter, Facebook, MySpace, YouTube and Hulu – we are going to consume more and more bandwidth. Add to it iTunes downloads, and before you know it we would be using much more than the 5 GB some incumbents want us to use. It is hardly a surprise then that nearly 90 percent of you who responded to an earlier poll conducted by us found the idea of metered broadband moronic.

Saving Incumbent Video Schemes

What makes the scheme even more devious and clever is that it saves the service providers’ video franchises. I had earlier pointed out that most of these carriers have spent billions of dollars to upgrade their video networks (telecom operators built entirely new ones) with a view that they could earn big profits as video-on-demand takes off.

The broadband juggernaut allows content owners to go directly to the consumers, by passing these video gatekeepers. But by capping the bandwidth and asking people to pony up big dollars for over-the-wire downloads, the pipe owners want to ensure that they can make their money back and then fleece us silly.

That is so much better than getting rid of Network Neutrality and of course, much harder to prove since the carriers control the numbers and they know how to fudge them silly. With that as background, here is the juicy little bit from The New York Times story that shows Martin’s heart isn’t in the right place, Comcast’s pending punishment notwithstanding:

Mr. Martin was asked whether the commission’s approach will push more Internet providers to start to impose caps on how much bandwidth consumers can use. He said he wanted to reserve judgment on that trend. He seemed comfortable with Internet providers offering services with limits, so long as they are clearly stated.

If Martin wants us to believe in him as one of the people, the 21st century Robin Hood who is looking out for the U.S. Internet consumer, then he should start by putting an end to this metered broadband nonsense right now.

Related Posts

  1. Why Metered Broadband is bad for Microsoft, Google & Us
  2. Why tiered broadband is enemy of innovation.

57 Responses to “Yo FCC! Are You Doing Anything About Metered Broadband?”

  1. Stephen Gazoogle

    Yo Om,

    last time you tried this, a majority of your readers favored metered broadband. 2nd time around you fail again. Give it up.

    And don’t watch illegally downloaded movies, walk or take a bicycle ride.

    Metered broadband is a fair solution.
    Now let’s discuss the cost for 5GB/month.

  2. To all those who support metered broadband, I have a proposition:

    I will pay for what I use on the Net if you pay for what you watch on TV and for the minutes on you local calls. I pay for bits, you pay for seconds, including the commercials.

    Fair is fair and if you don’t think that it’s fair for “those who use more” tv or local call time, then you have no right to ask me to pay more for my Net.

  3. 5 Gigs, that’s not much.

    Admuncher reports that it saves me from about 1 gig of
    adverts per month. That’s nothing out of 1500 m bits per
    sec (actual DL ability: about 430 gigs per month), but
    out of five gigs? Everybody would buy Admuncher, and
    nobody would see any web ads.

  4. Robert

    Whether your for or against metered downloading, it’ll never fly anyways. Do you really believe that companies like Google, Microsoft, Yahoo!, and so many others who depend on large net traffic will let this slide? Secondly, once you offer unlimited service for anything, there’s no going back. Most of the companies who have tried have gone under.

  5. Bravo! This is the first time I’ve seen reasonable and rational feedback from GigaOM readers on the topic of tiers and bandwidth usage metering. I was just about to take GigaOM off of my RSS feeds because of the one-sided and irrational posts, but my faith in the readers of this blog has been restored.

    Business should be allowed to run business. Vote with your wallet and cancel your service if you don’t want to pay. As much as we’d all like it to be deemed as such, broadband service is NOT a lifeline service. It’s great and useful and all of those things, but it ain’t saving lives! If it was only used for phone calls (in which case, you’d have NO problem with caps) or it provided electricity to your house to keep you warm in the winter, it should be regulated as a lifeline service. However, for those of you/us who download gigs and gigs and GIGS of movies and content, you have a choice. I’d like a Ferrari to drive to work, but I can only afford a Scion. You don’t see my lobbying for laws to prevent Ferrari pricing capped. Actually, maybe I should do something about that. Hmmm…

    We can all complain about pricing all we want (I do too), but until service providers (cable or otherwise) deem new billing plans as unprofitable, they’ll use them and try new ones when they don’t work. Heck, I want broadband for free too, but I understand that corporations are in business to make money. This ain’t a non-profit!

  6. strotter

    I still can’t believe a lot of people are too naive (dare I say “stup!d”?) as to what really is the problem? In a nutshell:
    – Bandwidth Overselling.
    – Selling Bandwidth W/O Disclosure on Quality (Guaranteed or Burst).

    From day one (of broadband internet?), ISPs sold consumers bandwidth w/ no guaranteed rate BUT advertised them like that is what the consumer will get. Heck, you’ll even be lucky if they decided to note it on the contract. Ofcourse, nobody/few complained since there were fewer people then who are connected, not to mention the type/size of content was a lot fewer/smaller. Now, it’s a different story, but the ISPs will do what they can to keep the status-quo, w/c is keep selling you BURST bandwidth and make you believe otherwise.

    Protocol discrimination and metered connection are one and the same, and are there to keep the status-quo. In the case of metered bandwidth, if everyone started consuming their bandwidth allocation from day one, everyone would notice that internet is slow (not because of heavy users, but because you were led to beleive that what you paid for is guaranteed bandwidth). But since the heavy users will quickly consume their share, the rest of the users will then feel the speed-up.

    I believe that metered bandwidth is better than protocol discrimination and is viable BUT ONLY for burst bandwidth connections.

    Not only should the ISPs be forced (yes, thank government intervention for that) to explicitly/clearly state their policies, but also state the quality of their service (GUARANTEED or BURST).

    Yes, you will pay more for a GUARANTEED (bandwidth) service (but hopefully not w/ an arm and a leg, again, thank government intervention in preventing/minimizing excessive/bogus charges), but no doubt a lot would pay for such a service (that is, only if the imcumbent ISPs doesn’t over-exercise their oligopoly status and squeeze-out new competitors offering such a service).

  7. You’ve converted me Om. If you search my old comments you may find that I’ve been on the other side of the metered bandwidth fence saying “people should pay for what they eat.”

    But I really appreciate your argument on the “protecting existing TV business” and think it goes even deeper than that: if they can’t regulate the internet due to net neutrality, then they’ll try to move content/services off the internet and into a proprietary network, e.g., Comcast On-Demand.

    For example:
    Every cable pipe going into people’s homes is already splitting time between the internet and a proprietary video network. Now imagine that proprietary network getting smarter…adding communication and social application overlays, and meanwhile the cost of using that pipe for internet access increases. Then they’ll effectively compete with internet content and services but /off-network/ and completely unregulated.

  8. waaa waa waa…. all of you are complaining but not actually doing anything….
    The second bellsouth/at&t do this in my area…. i’m picketing in their front lawn with my laptop. (plus i’m sure when dad sees the bill because of this bandwidth cap… he’d get rid of the internet anyway)

    And i’ll make a sign that says All yo bandwidth are belong to us.

    i’m sure i can get plenty of people to join me… :D

    In other countries they can get like 15mbps for a fraction of the price.

  9. DG Lewis

    To the voices of reason saying, “It’s not the caps, it’s unreasonably small caps. I’d be OK with 250 GB/month, but 5 GB/month is ridiculous,” a question: What makes you think that a “reasonable” cap like 250 GB/month will increase as bandwidth demand increases? And bandwidth demand will increase.

    Ten years ago, a 5 GB/month cap would have seemed eminently reasonable on your 33.6 kb/s dialup — you could have run at full speed 24 hours a day for fifteen days before you ran into it. Today, a 250 GB/month cap may seem eminently reasonable – but relative to an average 3 Mb/s cable internet access download rate, it’s actually lower than that 5 GB/month cap would have been ten years ago.

    I share Om’s concern that metered usage, in whatever form and at whatever level, will serve to stifle innovation at some point, due to the behavioral cost of users needing to manage bandwidth usage.

  10. The problem with what some of you are saying that it’s ok to meter is that the topologies that cable uses are shared bus topologies. The maximum node count using the topology is 2500 nodes. That means that all your neighbors are sending signals on the same wire that you are. What happens when people like myself start to use your bandwidth? The main reason that there is congestion is that the cable companies have not invested a fraction of their revenues back into their networks. Bit torrent use is really negligible but they (ISP’s) say that so the people start to yell at each other instead of them. If you use email and I play WOW, why should I pay the same as you? This is the argument that the companies want people to start to talk about so it takes the focus off of them blocking and degrading internet connections to sites that directly take away some of their profits. Comcrast blocks more than just Bit torrent traffic. I personally busted them blocking me from downloading software that lets you tune into internet based TV as well as a personal DVR program. All I had to do was use a VPN connection (encryption) and I was able to download the file. After I turned off the vpn and tried once at gain to download the file, it would start and stop almost instantly.

    Less than ten years ago there were many articles written about companies going out of business that were installing fiber all over the country and no one used it. I know that on the west coast alone that we were only using less than 30% of available bandwidth. As a result of these small usage numbers, the companies that built the networks were forced into bankruptcy. They had no choice but to sell off that infrastructure for pennies on the dollar. Now that we are using this infrastructure, we are being asked to pay more for less.

    The problem is simply competition or their lack of. If we had true competition for the wires coming into our home and businesses, none of this would be an issue. The simple fact is we don’t have competition for any of the copper coming into our homes and businesses. That is the chief problem. Every one of you that screams for open markets and self regulation are dead wrong. We are experiencing just that, free and open markets. Which in truth aren’t free and open. These blocking technologies are only in place to protect their monopolies instead of offering better, faster technologies.

  11. Geez….I don’t want to pay extra to download illegal movies and use my computer as a server. Get a grip. There is nothing wrong with charging for usage. Comcast pays for the bandwidth it uses. If customers need more then their connections can provide they have to upgrade and add more bandwidth. If you don’t like the pricing, leave….that is the real power of the consumer.

  12. xinunus

    Apparently it doesnt take much for someone to call themselves a journalist. Take this quote from Om’s article, “has take up a”. Huh? You really need to either learn how to check for grammer or drink more coffee.. dohhhh..

    “In an effort to burnish his public image, Federal Communications Commission Chairman Kevin Martin has take up a populist and politically lucrative crusade”

  13. Benchmarkjoe

    Here in my town. The CMA cable is already limit the down load to 20GB/month for the (roughtly $75 premium user). I think we should use dial up to check our email and let them and us feel the pain for a while. But more likely the providers will suck and suffer while I can go to fishing to enjoy the outdoor other than sitting on my table.

  14. As I’ve written about here before, it is not metered bandwidth that is necessarily the issue. The issue is the very small bandwidth tiers (or caps) that will kill both Internet video and innovation. 5GB is a ridiculously small bandwidth cap – the 900GB upload cap being set by NTT in Japan makes far more sense.

    We are all going to suffer from the monopolistic bloat and girth of the large service providers who are desperately trying to find a way to get more money from each consumer as opposed to working the inefficiencies out of their own operations. It is not grandma doing email or an average torrent downloader that is killing the service providers, they are bringing it on themselves.

    @Dave – as for the “everything else is metered” argument, you’re right. But they are also regulated with appointed (or elected) commissions that approve pricing plans. If a service provider wants to charge like other household commodities, that might work. Somehow, I do not see that being commoditized to a bit-pusher as being part of their long-term strategic vision.

  15. austinandrew

    As much as I hate the idea of metered broadband, it makes sense. Until recently your cell phone was metered. Long distance on landlines used to be metered. People who use more should pay more.

    However, companies should be required to provide you with any easy way to see exactly how much bandwidth you’ve used month-to-date. Also, there should be a requirement that you have at least two options for high speed internet in your area in order for you to be offered metered broadband. That way there’s at least competition.

  16. “Why should the grandma checking email pay the same as the busy torrent downloader?”

    For the same reason why the person who watches 3 hours of TV a week pays the same amount as someone who watches 48 hours. Or, the same reason why a person who makes 5 hours of local land-line phone calls pays the same as the person who makes 25 hours.

    When it comes to broadband the heavy users are already paying more for faster speeds. Grandma checking her e-mail can go with the slower speeds while gamers and torrent users pay for fast speeds.

    TV: people pay more for premium channels not for hours watching those channels.

    Land-line Phone: people pay more for options not for time spent talking.

    Net: people pay more for speed not for bytes. (Which consumers haven’t been getting the speeds they’ve been paying for anyway, but now THIS?)

    How is metered broadband going to affect gaming? There are a lot of jobs and money wrapped up in gaming.

  17. MeMyselfAnI

    Metered broadband is a double edged sword. It could work really well if the limit is sufficiently large. It could hurt everyone and everything if the limit is sufficiently low.

    It’s all about competition and greediness of internet providers. I have to agree with Mr. FCC Martin that internet companies MUST publish their limits even if they are “soft” limits that you can occasionally go over without problems… as a consumer I still need to know how much is too much.

    Also I need to be able to use my internet connection how I see fit… not in some limited fashion based on what my internet provider (crapcast) wants to block and allow. They need to get their fingers out of it!

    If Comcast wants to impose a limit on bandwidth usage that is sane, like 100gb or 200gb… that would be fine by me… especially if they offered high speed internet at a lower price than I’m paying now with lower limits. Example: If they were to offer 30GB a month for $30, 100GB a month for $60, and 250GB a month for $75 I could see that helping… A few friends who have very tight budgets could really benefit from a cheaper highspeed internet. They don’t download hardly anything, but they would use it for online gaming, youtube, and online classes.

    This could work if done right.

  18. Charles Farrell

    >> My electric, water and natural gas providers meter my usage, the internet providers should do the same thing? <<

    Yes, those providers DO meter your usage, as does your cell phone service provider, more than likely, but in all those instances there is a “meter” through which you can monitor your usage throughout the billing month. And the definition of what is being “used” is very straightforward.

    One problem that I see with that billing scheme, when extended to internet bandwidth, is that a subscriber could look at his megabit usage numbers throughout the month and have only a vague feel for whether it is anywhere near accurate, or whether he is being ripped off. Especially if there are multiple users and devices in the home contributing to that usage. And PC processes running in background, such as the neverending software “updates.”

  19. Yo GigaOM, have you ever heard of a business modeling. If user X is making a company lose money because they download files 24×7 – then that isn’t a smart company if they just let organizations led by people like you to cry and complain to leave it the way it is. Companies need to make money, and to let government and lobbyists force them how to run their business, instead of the consumer, is so wrong. Grown up and stop your whinning. What would you do if your server was getting hammered 24×7 by people visiting your site, and the hosting company keep raising your rates. Are you going to cry to the hosting firm and say leave me alone, I want unlimited capacity!!!!!! for the same price, and then call the hosting company evil for trying to make a profit???

    The smaller population that sucks up bandwidth downloading from Giganews and pirated sites, and some of those legal places too, are paying the exact same price as people who use it just check email and stock prices. Get with the program and realize we are a society that has to pay for services – and that the all you can eat service is not a smart way for telcos and cablecos in the long run to run a profitable business.

  20. William


    Welcome to the rest of the world, which has had metered download limits since the dawn of time. However, us in Australia are starting to thead the other way, with shaping after we reach our ‘limit’. This means that once we use 5GB our speed is dropped to near dial-up speeds. We can still get on the net, but not really do anything

  21. I work from home for a software company. I probably use 1GB a day every now and then, often at least a few hundred megabytes. I would be fine with a reasonable cap, say 200gb per month. Something like 5gb is ridiculous. I could blow through that in a week and I don’t do anything illegal or even use it that much.

    I only stand against unreasonably small caps, but I know that this is going to get expensive. Cable and broadband are already expensive.

  22. Metered broadband is the solution, not then problem. Why should the grandma checking email pay the same as the busy torrent downloader? My electric, water and natural gas providers meter my usage, the internet providers should do the same thing?

  23. Cable companies and phone companies have 2 options when it comes to capping: break the law or overcomplicate their way of life. Let me explain…

    Many cable companies offer VOIP. Recently, phone companies (such as AT&T) began doing the same (VOIP in addition to POTS). Here’s where the problem with “capping” comes in… is the bandwidth utilized by their VOIP service going to count towards the transfer cap? If it will count then how will they justify this? “Unlimited calls in the US” their VOIP service will state. On the underside, if you go over the cap then you will *technically* still be paying for some of your calls.

    On the otherhand, let’s say they don’t count THEIR VOIP service towards the bandwidth cap. What about Vonage? Will these calls be counted towards the bandwidth cap? If yes = monopoly. If no = how will they keep track of this? VOIP services pop up constantly. Many small, some big.

    Now what happens when TV over IP comes along one day…?

    This capping issue is ridiculous. 10 years ago, the phone companies were the “bad guys” and cable companies complained. The tables have turned and the cable companies have taken over being greedy.

    As for “their networks can’t handle it”. I’m sorry, but cable companies are going to have to REINVEST some of the billions of dollars we pay them back into their networks. Just as phone companies held off and held off, never upgrading their systems, they are now paying for it and fighting tooth and nail to get back in the game (Verizon as an example). 10 years from now, the Internet will be ever more different than today. Do we want to stifle our advancements because Comcast wants to keep every penny?

    Which is why China now has more Internet users. Let’s go ahead and hand over our DNS servers because our network won’t be able to handle it soon (without proper upkeep with the times).


  24. OM – While I enjoy your musings most of the time – this commentary is at best silly – bordering on ignorance. Packet Cable initiatives (the basis for metered usage) were underway long before Martin arrived at the FCC. Billions of dollars in infrastructure has already been delployed around Packet Cable. Martin is in no position whatsoever to undo these initiatives – so picking on him is what I call “silly”.

    And now the “ignorance” part – where the hell have all you guys been for the past 5 years while packet cable initiatives were being rolled out? Now it seems fashionable to write about these things – so there is one “pundit” a day taking a shot at metered usuage – a shot which is nothing more than a stink bomb – the foul odour lasts for a couple of minutes and then forgotten.

    Metered usuage in inevitable (as are tiered services)- has been coming for a few years now. The REAL DEBATE should be how law makers (and agencies like the FCC) monitor prices (as in gouging), and open up every alternative for broadband access. If they do their part – market forces will give the consumer a good deal at a fair price. Business models should be left to the operator.

  25. Charles Farrell

    Blanket opposition to “metered broadband” is unlikely to succeed. Looking to the near future, many people are going to be wanting to watch an HD version of video-on-demand. Some are going to want to accumulate extensive film libraries. We are talking about an extremely large number of bits!

    Even with their brand-new Roku box, Netflix backed off from supporting HD, and from my experience with Roku on a “5MB” connection, it seems to barely work.

    The cable companies are going to have to make huge investments in infrastructure to support the implied excalation in bandwidth requirements. Some of the prominent providers are nearly bankrupt already. (I personally blame the outrageous, extortionate fees that they have to pay to the TV content providers).

    The most likely compromise will not be “metered” broadband as such, not some quantity of bits, but speed restricted tiers like we see today from some providers. A base monthly charge will include a download speed restriction that is too low for practical video-on-demand.

  26. This is essentially the outcome of network neutrality it appears. The ISPs cannot discriminate on apps in any way, so they move to caps. They end up making more money, consumers end up paying more money, and consumer advocates somehow get to claim victory. Huh?

  27. Wow, someone who understands how big business works. Martin is getting tough on net neutrality as a diversion – to make it look like he is on the consumer’s side. Then, of course, he has to be “fair” to the duopolies so he will be soft on metered broadband. Which is what the duopolies want anyway – they are going to make a ton more money off metered broadband than they would have charging the websites for fast access.

    It is really starting to appear that the cloud is going to die before it gets off the ground. By the way, the “average user” includes many people like my 65 year old mother who has broadband but never uses it. Vonage, Skype, Netflix (online), etc. better enjoy their companies while they can.

  28. Om

    Thanks for including me in your story. I wanted to stop by and give credit to Karl Bode at DSL Reports, who was the original source. Within a few hours after he broke the story, it was being discussed by two commissioners at today’s FCC hearing.

    Bandwidth is cheap but not free, so Comcast’s soft cap at 250 gig has some basis in 2008 costs. But Frontier at 98% less has nothing to do with their costs and I agree with you is about protecting their “93,600 DISH customers.” (Frontier 10K)

    Frontier in 2007 had capital spending of 315,793, which seems like a lot until you note their Depreciation expense was $ 374,435. 5 gigabytes is so low even a 2002 style network can handle it, but not maintaining the network is going to hurt them and their customers.

    Dave Burstein