ISP Bandwidth Caps are Really Rate Hikes

IP transit costs are what a carrier or ISP would pay to get traffic from their main datacenter/CO in a given metro area to the Internet. This is an operating expense and is a drop in the bucket compared to CapEx they spend on the last mile.

The cable operators and mobile carriers are freaking out because they are constantly pouring money into nodes splits and QAM carriers(cable) or radios, backhaul, and spectrum(mobile). These are the real money pits of their businesses and their motivation to enforce data transfer caps, throttling, etc.

Original article was posted here yesterday: http://news.ycombinator.com/item?id=2814917

Cross-posting my question from this thread:

Is this spectrum encumbered by any regulations that would prevent an enterprising individual from leasing some land near a backbone connection and setting up a startup ISP?

Would LOVE to see the regional cable monopolies face real competition. 22Mbps is about 30% more downstream and 4000% more upstream speed than I get from Time Warner Cable in NYC.

Do you have any evidence of how common this behavior is or what impact it actually has on the network?

ISPs claim that the vast majority of their users won't be affected by data caps, but they also claim that heavy users significantly degrade performance for everyone. Those two statements usually seem contradictory to me.

"Everything is amazing, and nobody is happy." --Louis C.K.

It used to be the case that you couldn't get ANYTHING approaching 5mbps download speed in your home. Now we regularly get 15, 25, and even 50mbps download speeds.

You also couldn't get decent wireless data. Remember EDGE? 1xRTT? Try streaming Netflix back then.

I remember Airphone and using a MODEM to get 9600bps data so I could send an urgent IM and followup email via the Airphone on a flight to a co-worker. Now I can get GoGo inflight internet pretty regularly. I'm looking forward to my next transatlantic on Lufthansa when I can have access to the Internet for almost the entire flight.

Need high-speed internet out in the middle of NOWHERE? You can get two-way high-speed Internet via satellite for a very reasonable sum.

It's all amazing and nobody is happy.

I've spent the past 20 years working in the Internet industry for almost EVERY major ISP out there. It's quite disheartening to see your router capacities double every two years when you're locked into a 7-year depreciation cycle for network hardware. Ditto for long-haul transmission.

This wireless is different? Maybe you weren't there for the tower space leasing negotiations I witnessed. You think broadband is expensive? Try sticking 3 antennas along with hardline 150' up a pole and tell me that your broadband is expensive when you see the monthly bill for tower leasing for a SINGLE site.

WOW.

The long term trend for high-speed internet pricing is DOWN. We get more and more downstream and upstream capacity per dollar with each passing year. Wired AND wireless. What was once IMPOSSIBLY expensive is only going to get less so in the future.

I used to pay $12.80 PER HOUR for 1200bps access.

BTW, You're Welcome.

Too expensive? Don't pay it. I think you can still get a 56kb modem on Ebay. Dialup ISP service is something like $7.95/mo now.

And that's in 2011 dollars.