Say Anything Blog

Say Anything - Pay per View! What a concept!

Those who think the party or the country, will be “taught a lesson” by handing the levers of power over to the liberals will learn a lesson, but it will be at the expense of our country and her liberties. And there are no guarantees that the party or the country will come out stronger, more conservative or better positioned to win elections against the incumbent liberals.

I have been around the net for so long that when I first logged in their were less than two dozen sites on the net!

This same tired argument ran in the dial up age and even through the beginning of AOL and still lives beyond it’s years today.

Simply put in dial up days the big users paid through the nose for the faster modems on the bleeding edge. Then in todays net they pay already for the highest speed tier of service offered via the ISP at a multiple of the bottom end cost.

No matter how you cut it , unless they go totally robotic in just downloading, the high usage people are almost at their saturation point for what they will go after.

The massive unwashed at the bottom end will crash the systems with their adoptions of youtube, online video sources and such that will make the heavy users lost in the roundoff error.

The heavy types do it for work or wanted downloads or even online RPG environments and they don’t really have a lot of growth left unless their usual haunts for example up their output of game resolution transfered over the net and not just contained via the software to the local machine.

All the web 2.0 and beyond stuff for the little guys, plus IPOD stuff will kill it all since the providers simply want to penalize the top which is already paying the most expensive tier, paying for access to the content they are bringing in from game providers for example and putting more bucks into the fastest hardware and the biggest hard drives.

But its the little guys at the bottom that will force the upgrades the ISP’s are again trying to put off and blame the bad old net freaks and not the net nerds.

I have been around the net for so long that when I first logged in their were less than two dozen sites on the net!

And with dialup it probably took you only a week or so to visit them all.

The Debate is over!  Global Whining has been confirmed.

The ISP types know from their research that the high end types will pay for the penalty bits.  They have to much sunk cost and in many cases real world business needs and such and can’t give up on what they need.

The bottom end doesn’t have that level of commitment but even just small unit growth will result in a massive combined number of new bits to be thrown around the web.  However they are much more cost sensitive and the ISP types know it and have the surveys to prove it.

You are touching around the edge of the whole net neutrality debate and ISP’s wanting to bleed the top who they know will pay to try to create their nirvana of optimization of bucks down to the last bit passing their portals.

But again for like the 4th or more generation of this game playing out like a seasonal rerun they will have to bite the bullet and simply expand their total available bandwidth or a competitor will. It’s just a matter of who will open the door and FIOS looks like they want to be a player.

The USA already pays way more per bite than the rest of the world does by large margins and has the slowest top end speeds and the worst customer service which is the international net world turned on it’s head.

Feature creep even in low end stuff will drive the need.

We have gone from plain text IM’s to IM’s with graphics, to Video IM’s to Video IM’s with background file transfer and then on and on.

NetFlix is taking the caps off their online viewing and more will follow.  Expansion at the bottom will mushroom and some providers are going to have to light up all that massive amount of dark fiber they own that was put in during the dot com boom.  They know it , but they are crying poor me the ISP to set up the bleed tier pricing to laugh all the way to the bank when they start to turn it on.

This is all a repeating scam by the ISP’s here.  Tech over the years allows growth of the megabytes the ISP can cram through a single pipe of optic fiber.

The main backbone is now pushing single fiber links into the multi-terrabyte range and look to up that by 10 fold or more in the next couple of years and the routers are available to switch it all around in non blocking connections at full wire speed switching.  Their unit cost per megabyte is dropping faster than the panties of an overworked hooker at the Olympics.

Go out to the rest of the world and the heaviest users get bulk discounts to attract their business and all sorts of perks.  Here they get thrown into the penalty box.

ISP’s can now turn on just a single extra fiber and bring on more capacity in a step growth at a lower cost than what they are already using.  Heck most of them can simply upgrade the speed of what they already have even cheaper.

This is a massive scam and a strawman but many here will buy into it, since they really have nothing to compare it to.

A simple fact is that competition will work to lower prices no matter what the businesses try to accomplish. 

The only thing thing to worry about is the government will come in with a “fix” that will stifle competition and innovation.

We’re going to need more speed with increased usage.  It won’t be long and we’ll be able to get our movies and that on demand over the infernalnet.

How about adding ten thousand movies to your DVD library?

The Debate is over!  Global Whining has been confirmed.

Economics:  The current system wastes bandwidth.  It costs some finite amount for a service provider to carry a marginal unit of bandwidth, but it costs nothing for a consumer to eat it up.  People are using bandwidth when it is worth less to them than it costs to provide.  Therefore, the current system needs to be changed; as a neat little result, no one will have incentive to upload pirated games and applications on free torrent sites.

I don’t see this not happening.

The free wasted bandwidth argument is bogus. It is just as bogus as the wasted electricity to power up your game console or home theater.  It provides a service to you.

You pay a price for your kw’s of electricity, that manufacture across town pays a whole bunch less per kw than you do but you still pay to play.

For my business I have multiple OC3 lines I use and this summer I am going to raise them to the next step up for business reasons.  The line cards in my routers already support much higher speeds and they are simply throttled down to OC3 per card to meet my current needs.  This step up will be a simple software setting to make it so.  Sure my cost per what was each OC3 line will jump, but the unit cost per megabyte will be cut to a fraction of what it was before.

Plus I have no knew costs to drag in another cable conduit with more fibers at big bucks per mile to do it. I have standard 20 and 50 fiber cables here with plenty of dark fibers to light up as needed.  Simply a matter of putting in another line card in the routers.

competition will work to lower prices no matter what the businesses try to accomplish.

I predict a decreased market share for Time Warner if they try this crap.

"If the good men are silent only the wicked are heard.” - Edmund Burke

The ability to do this has been under development for a long time. Switches at telephone companies do not have the ability to serve all of their customers at any one time. Physical subscriber connections to a switch are supported by physical connections coming into the switch from a trunk in ratios determined by the telephone company to be adequate to provide sufficient service. This ratio might be 10 to 1 in Minot and 1000 to 1 in Manhattan where the population is more dense. A traditional T1 has the capability of supporting 24 telephone lines at any one time. There is most likely the equivalent of one T1 coming into Minot for every 200 telephones. The actual connection is probably now fiber optic in the form of a number of OC3’s or OC12s.

This scenario worked because phone calls last about 5 minutes. When people started using dial up to connect to the Internet for hours at a time and quite often walking away from their computers leaving them connected, it upset the apple cart. TelCos were forced to buy more capability for the same number of subscribers which cut into their profits. Even when customers would buy an addition line for their computers, it didn’t help. Instead of having 200+ customers on a T1, companies could have only 24 online customers on a T1.

Then the government decided, in the guise of providing competition resulting in lower rates, that the phone companies needed to be deregulated. Telephone companies that have paid for and own the physical lines around you were suddenly forced to provide access to their property by ISPs or anyone who wanted to be a phone company at rates determined by the FCC. These rates are much lower than what the TelCos would normally realize in revenue. It wasn’t really deregulation. It was theft of property and money. Rates did not go down. It costs an average of $1200 to install a telephone line. Telephone companies count on a basic rate of around $10 per month to pay for this. With additional charges for caller ID, voice mail, long distance, etc, companies in smaller towns try to have an ROI of around 2 years. It is usually twice as long. It will be longer if the company is forced to share the line it has installed. Companies are less inclined to install new lines and technical capability as a result.

Then DSL came along and TelCos were able to recover some of their lost revenue by installing DSL capability. Routers and switches run DSL networks in the same ratio scenarios as voice lines. Initially this was unregulated and they didn’t have to provide access to competitors. Competitors could go through local zoning and approval process and install DSL cabinets next to telephone cabinets and demand access to telephone lines and drop lines and compete but the required investment and maintenance costs were prohibitive.

Then voice over IP came along and TelCos began to lose long distance revenue. As Internet content became more sophisticated and videos, movies and even TV began to be watched online, the ratio of the number of subscribers to available bandwidth began to once again be reduced. TelCos have been forced to install new equipment to meet bandwidth demands while not realizing a significant increase in revenue. The new equipment often requires the installation of fiber in areas where the revenue does not justify the expense. Even RBOCs have been forced to increase their ROI targets.

There is no end in site for bandwidth requirements and as technology changes the TelCos are becoming less and less involved in customer premise equipment. Instead of telephone companies they are becoming bandwidth providers and your bill will eventually change from a basic rate plus extras to a bit usage charge.

This is geared more to the neighborhood level where local ISPs have a choice of upgrading every neighborhood or convincing that one guy in each subdivision to stop hosting bit torrents 24/7.  It’s really more of a “fair access policy” than an attempt to get more income.  You can watch You Tube all day long and not get even close to the bandwidth usage of the guy next door downloading HD movies all day long.

If this keeps the cost for normal users lower, then it makes sense (unless you’re the guy who thinks he should be able to run a high usage business from his home while still paying the residential rate).

rBOCs will have the clear playing field on this until tech outstrips them. It is going on even as we speak.

What used to be prohibitively costly is not so any more.

The weak point of the whole telco system was and is the last mile.  Those puny little wires designed to be the absolute least amount of copper to provide compressed analog voice to a common codec for voice compression.

Now they are jumping through tech hoops trying to shove data down the same path and still leave the old voice path there besides.  But more are moving to the voip model to make better use of the frequency band the wires will transport.

What used to be many pairs of wire between switching centers is now a fiber used only at a minute fraction of it’s capability.

Fiber is moving to things like fiber to the neighborhood to fiber to the curb to fiber to the home in steps and each step makes the next one cheaper.

There really is no good technical reason for each house not having 10/100 ethernet to the home.  It is readily available.  It doesn’t even have to be shared bandwidth like cable.

80% of the gear installed out there now is IPV6 capable (even Vista is).  Internet 2 is alive and well with 10gig drop points in the real world.

Phone numbers and fax lines are being replaced by ip addresses and subnets.

As prices drop for new tech and one trench can be dug to support massive bandwidth to neighborhood distribution points it becomes a much lower break even point to totally bypass the telco local distribution bottleneck and it will happen.  The intercity stuff will still be shared, but there are decades of growth capability in the fiber that is there already in place.

That is part of the reason new cables are going underground.

Most people never knew that the largest cost for a cable TV provider was not his cable and amps or his broadcast equipment or even the cost of the programming.  The big number each month was the ‘pole rent’ all that money paid to the electric or phone company on a per pole basis depending on who owned the pole itself that was passed on to the consumer as part of the monthly fee.

Yet the phone and electric company took in all that rent in new subsidiaries they created just for that revenue stream and never recognized it as revenue to the utility themselves, because if they did the public service commission could never have fought off the screams for rate decreases because of the new found income.

Even the cable world is getting ready for the change.

Years ago they up graded from 30 channels to 60 then they eventually up pathed to 250 or 512 channel stuff.

Now they are moved to all digital.

The waste on broad proportions was carrying 500 channels of analog locked into synch for a dedicated channel to watch by tuning in.  The channels were all provided 24/7 but some only had a handful of people watching them.  Even the most popular channels you only needed one off for all to have a look see.

Now with all digital a house drop can request a channel and you digitally blast it to the buffer in the box at 40 times play rate or more. Fill the buffer and move on to the next most popular program and blast it out in the next time slice. Repeat as necessary to fill all the buffers for a bunch of different channels or multiple copies just time shifted to different schedules.  Video on demand no problem, we can support 100 of them in the same channel band we used to have to dedicate to a single program.  Now since on the average cable TV system 12 % of the channels would carry 80% of the traffic you can now cram all that into two channels place on a 500 channel system.  Lots of room now left for “new” stuff to make money off of.  VOIP done on cable etc, music downloads from the cable company and not some net provider.

Times are changing and this whole bandwidth hog story is just a shiny toy to fool those who are easily fooled.  They will buy into we have to share this scarce resource and the hogs should pay more without even the slightest clue of just how much bandwidth is really out there today available to be used and at what a low usage rate is is being exploited.  They only tell you the hogs are using x percent of the demand, they wont tell you that all users combined are loading us down to maybe 15% of installed capacity that we can just change one setting and bump up by factors of a hundred or more for available bandwidth.

As I said before, I don’t think there’s anything all that sinister in charging based on use.  I’m just not sure it’s marketable.

iTunes just went to online movie rentals.  Netflix is renting movies via download.  NBC, ABC, CBS and Fox are all streaming television shows through the internet.  Everyone and their grandmother has been downloading music for years now.

I just don’t see ISP’s being able to switch to usage-based fees just at the point when new developments in internet business are driving bandwidth usage to all-time highs.  Especially now when customers are used to getting all the internet they want for free.

Heck, Amazon is giving free mobile internet access on the Kindle just so that users might download some of their eBooks.

The war against illegal plunder has been fought since the beginning of the world. But how is… legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish this law without delay … If such a law is not abolished immediately it will spread, multiply and develop into a system.

Frédéric Bastiat, The Law

Rob’s recently listened-to songs:

If this keeps the cost for normal users lower…

A common leftie redistributionist fable.  It’s just greedy “divide and conquer” strategy.  ISPs used to have usage charges, then, to expand their business, they went to a flat rate(not “free").  If they aren’t making enough money under the present system, service will suffer, and then people will be willing to pay more; so far that ain’t happening.

"If the good men are silent only the wicked are heard.” - Edmund Burke

Telephone companies that have paid for and own the physical lines around you…

Actually, the customers(the public) paid for them; it’s on your bill.

"If the good men are silent only the wicked are heard.” - Edmund Burke

My guess is most of you have never had the pleasure of sitting in on meetings of a state public service commission and watched the catfights between the providers and the users over just how bogus some of the numbers are and how cherry picked they are from the entire data availability there is.

Similar logic holds for municipal license hearings.

Too many times it is so tightly framed that it would almost have been better to roll dice and present no data at all.

Thanks JustADude for sharing so much factual knowledge.

Hoping our internet services soon catch up to Korea and France.

Woof glad to help.

I have a unique insight to this whole shell game.  I ran a couple of companies I started from scratch.  One designing and installing the backbone cable for the cable TV systems in a bunch of large cities nationwide and another company during the dot com boom at the same time putting in a lot of those fiber cables linking all the NAPS and ISPs to expand the backbone and the next couple of tiers down.

All together I had over 3000 people working for me at the peak before I was bought out by a consortium of the major players.

At one time I was taking over a 1/4 of the entire west coast production of fiber optic cable of Cornings west coast plants and 1/2 coming in from overseas.

I got to see it all up close and personal and play ball with all the major players.

Glad to chip in with some insider tips on the issue.

Times are changing and this whole bandwidth hog story is just a shiny toy to fool those who are easily fooled.  They will buy into we have to share this scarce resource and the hogs should pay more without even the slightest clue of just how much bandwidth is really out there today available to be used and at what a low usage rate is is being exploited.

Okay, say we agree that bandwidth is not scarce because there is excess capacity.  That means that as usage increases, it will be unprofitable for any given company to add more capacity.  From here, bandwidth will necessarily become scarce, because scarcity is the only incentive for providers to increase capacity.  Now, my argument dominates; the current system allows a user to power through bandwidth when it is worth less to him than it costs the company to provide.

This is wasteful, and any company that provides this kind of service opens itself to competition from a company that charges with a pay-by-use schedule.

Say a pay-by-use company comes in and offers a bargain rate to light users.  All the light users will switch to the new service, leaving the heavy users to the flat-rate company.  This is obviously unstable, and eventually, the pay-by-use company will dominate the market.

That means that as usage increases, it will be unprofitable for any given company to add more capacity. From here, bandwidth will necessarily become scarce, because scarcity is the only incentive for providers to increase capacity.

This is only true if supply is greater than demand, which is not the case.  The customer base for internet use is constantly increasing, and the quality of service is an issue.  Right now, cable internet is in competition with DSL.  DSL is generally less expensive, but cable is faster, so those who desire more speed go cable, while the lighter users are quite satisfied with DSL.  Reliability is also an issue, so don’t expect pay for usage to be a big hit anytime soon.

"If the good men are silent only the wicked are heard.” - Edmund Burke

If this keeps the cost for normal users lower…

A common leftie redistributionist fable.  It’s just greedy “divide and conquer” strategy.  ISPs used to have usage charges, then, to expand their business, they went to a flat rate(not “free").  If they aren’t making enough money under the present system, service will suffer, and then people will be willing to pay more; so far that ain’t happening.

R108, if a company decide to piss off their abusive customers in order to compete better among the profitable ones, just exactly how is this “leftie redistributionist”?  Perhaps this is a beginning step to lowering prices for other users in the interest of competition.

Flat rate is not any more or less socialist than pay for usage - not allowing a company to decide their rate structure, however, would be.

Socialism among the telecom business is alive and well today in that companies are not allowed to offer premium services, such as fiber to the home, to affluent neighborhoods without also offering them in the ghetto.

en: I thought I made it clear, but here goes: the leftie redistributionist, divide and conquer fable is that the “rich"(big users, whatever) should pay more, and that will enable “the proletariat” to pay less.  It just doesn’t work that way in the real world.  Look, internet service is worth what people are willing to pay for it, no more, no less.  Flat rate is the rule because it won the competition.  If you think it’s “unfair"(my favorite leftie buzzword), you are certainly entitled to your opinion, but business would not have expanded the way it has without the flat rate structure.  This is just another type of class envy politics, IMO.
I think your use of the term “abusive customers” is the giveaway to your own class envy beliefs.
The socialism isn’t a part of the telecom business, it’s in the govt regulation it has to endure.  The real greed is always in the political class.

"If the good men are silent only the wicked are heard.” - Edmund Burke

Actually the internet is one of those contrarian things, band width abundance promotes innovation and newer delivery services enhancing the value of the entire package.  See my earlier comments on various versions of IM programs.

Restrictive bandwidth policies stifle innovation and utilization.

If that were not the case , we would all be stuck still with 9600baud modems or even shudder the thought 300 baud modems.

How about a show of hands of how many of you want to go back to only the three major networks on TV for 8 hours a day and going black for the rest of the day?

As long as there are tiers to pay the costs that already charges the heavier users.  Limits on amount can be tried but the will not work, except on the very LOWEST tiers not the highest.

Look at cell phone net access for examples of that or a set number or unlimited text messaging for others.

Unit bandwidth costs go down once fiber or tech raises the bandwidth limits.  The perceived value of those added services that are largely out of the development or control of the providers are what will drive it and enhance the income for the ISP.

The will end up having people upgrade their speed to use the services they hold in value and if they have to up total bandwidth to support it they can add capacity cheaper than their revenue will increase thus boosting profits.

For example if the portal itself is bumping up against its full capacity, a simple doubling of the capacity will have a lot more overhead for growth, since peaks and valleys of usage patterns will not pressure the total bandwidth any where near as much as it was doing prior, even with their unit bandwidth cost going down.

Dude: You make it sound complicated, but really the only thing that matters is demand, supply, price and good management.  The details don’t matter.  People will pay for something that’s worth it to them, and won’t pay for something that isn’t.  Marketing ploys can only go so far.  Ultimately, and successful product has to be available, affordable, and of good quality.

"If the good men are silent only the wicked are heard.” - Edmund Burke