FCC Boss Oblivious to Dangers of Broadband Caps Genachowski Still Ignoring Key Facts, Like Most Meters Don't Work FCC boss Julius Genachowski has been busy lately paying lip service to Silicon Valley, most recently telling a bunch of Silicon Valley conference attendees that caps were something we should be "concerned" about, after telling cable companies just a few months earlier he thought caps and overages are nifty and innovative. Speaking again to Silicon Valley folks yesterday at a speech at Vox Media headquarters, Genachowski hashed out his muddy position a little further, again insisting he was "concerned" about caps -- sort of -- maybe: quote: (Growing usage) presents challenges for broadband providers in managing the growing loads on their networks while earning returns to drive capital investment in network upgrades and expansion. One tool we’ve seen is usage-based pricing, often implemented with monthly data limits. I’ve said since 2010 that, in a competitive market, usage-based pricing can be a useful tool, consistent with the goals of driving efficiency, investment, and faster and more robust network infrastructure. In general, experimentation in business models in competitive markets is something to be encouraged, and has historically benefited consumers. in a competitive market, usage-based pricing can be a useful tool, consistent with the goals of driving efficiency, investment, and faster and more robust network infrastructure.

-FCC boss Julius Genachowski That sounds lovely except for two problems. That sounds lovely except for two problems. One, caps (and especially usage fees) are not technically or economically necessary whatsoever. Flat-rate broadband is perfectly profitable and despite doomsday prognostications designed to scare regulators (it apparently worked), most networks consistently keep pace with demand thanks to dropping bandwidth and hardware prices and improved engineering. Ten years of ISP earnings reports are proof the flat-rate pricing model is sustainable. Two, they're not being imposed in a "competitive market"; they're just price hikes on already-expensive service, designed to protect TV revenues from Internet video -- and they're made possible specifically because of limited wireline competition, a problem the FCC refuses to seriously tackle. Most modern, well-managed wired broadband networks don't see much congestion. Caps and overages are an executive and investor pipe dream; an entirely new unnecessary fee system layered on top of what is already some of the most expensive broadband service in the developed world (OECD data). Genachowski appears to have swallowed the lie that money gleaned from overages goes back into the network; yet CAPEX and wired network investment is dropping like a stone for most incumbents, and most of the cash gleaned goes into the pockets of CEOs and investors. While that's the public corporation's primary objective, pretending that caps are helping to create the networks of tomorrow is not supported by the facts. If the money from overage fees actually went back into the network, Canada would have some of the most advanced residential broadband networks in the world. Go ask our Canadian forum users exactly what caps have done to improve the quality of their services. ISPs want to bill like utilities but refuse to have the "pumps" regulated like a utility and regulators, including Julius Genachowski, haven't shown one second of interest in the subject.

Genachowski then seems to remember that he's talking to Silicon Valley, a group of people whose products and services are directly threatened by totally arbitrary usage limits and surcharges: quote: At the same time, I’ve been clear that I’m concerned about practices that harm competition, including from over-the-top providers; unnecessarily depress broadband usage; or reduce incentives to increase broadband speeds and capacity. As I said earlier this year, as consumer usage grows and technology improvements enable providers to deliver more bits at lower cost, we should expect that any monthly usage limits will increase and that consumer cost-per-bit will decrease. In short, Genachowski is saying that unnecessary caps and overages are just fine as long as they scale to modern usage trends (that rarely happens, and only if there's competition) and result in lower prices (that never happens). If you understand that overages are just an unnecessary price hike on a captive audience to begin with, that's like arguing that mugging people in dark alleyways is just fine, provided the robber is reasonable and accommodating when it comes time to stick the revolver in your ribs. And while Comcast appears to be Genachowski then seems to remember that he's talking to Silicon Valley, a group of people whose products and services are directly threatened by totally arbitrary usage limits and surcharges:In short, Genachowski is saying that unnecessary caps and overages are just fine as long as they scale to modern usage trends (that rarely happens, and only if there's competition) and result in lower prices (thathappens). If you understand that overages are just an unnecessary price hike on a captive audience to begin with, that's like arguing that mugging people in dark alleyways is just fine, provided the robber is reasonable and accommodating when it comes time to stick the revolver in your ribs. And while Comcast appears to be scaling their caps (largely because of competition from Verizon FiOS), many carriers in uncompetitive markets (like AT&T ) aren't. In uncompetitive Canadian markets, carriers just keep on squeezing Even if you want to ignore all of this and still argue that usage caps and per gigabyte overages are a good thing, there's another major problem Genachowski and the FCC continue to ignore: the meters being used by ISPs to track usage aren't accurate, and users are being over-billed for service. Our forums are filled with story after story from users of ISPs like Suddenlink, AT&T and Cogeco who complain that their ISP is over-billing them for data they never actually used. ISPs want to bill like utilities but refuse to have the "pumps" regulated like a utility and regulators, including Julius Genachowski, haven't shown one second of interest in the subject. The primary criticism of Genachowski is that he's a consummate politician and fence-sitter, telling everyone exactly what they want to hear while failing utterly to make real, hard decisions that could (gasp) potentially result in somebody getting upset. The end result are weak rules, and show pony policies that don't accomplish much of anything, which just the way uncompetitive legacy companies like it. But just for the record Mr. Genachowski, and not to get too technical, but imposing unnecessary new fees and unreliable meters on already-expensive uncompetitive U.S. broadband services isn't "innovation" -- it's crap. The primary criticism of Genachowski is that he's a consummate politician and fence-sitter, telling everyone exactly what they want to hear while failing utterly to make real, hard decisions that could (gasp) potentially result in somebody getting upset. The end result are weak rules, and show pony policies that don't accomplish much of anything, which just the way uncompetitive legacy companies like it. But just for the record Mr. Genachowski, and not to get too technical, but imposing unnecessary new fees and unreliable meters on already-expensive uncompetitive U.S. broadband services isn't "innovation" -- it's crap.







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Snohomish, WA 3 recommendations tshirt Premium Member Almost there, Karl. except for this falsehood.



"One, these caps (and especially usage fees) are not technically or economically necessary whatsoever. Flat-rate broadband is perfectly profitable and despite doomsday prognostications, most networks consistently keep pace with demand thanks to dropping bandwidth and hardware prices and improved engineering.

1}IF you go back to "UNLIMITED" useage WILL again increase at an uncontrolled rate, faster than the current plant "refresh" rate (hardware upgrade cycle) allows for.

2}it's great the price is plunging, but if you replace something today (say CMTS) expect a 5-year life-span, and "UNLIMITED" exceeds it's capablity in 2 years, CISCO does not upgrade it for free. It is cheaper, it's not cheap enough to run a 2 year replacement cycle at today's rates.

3}IF forced to provide flatrate ($) "UNLIMITED" , either the rate($$$) will grow exponenially year after year, or capacity will rapidly be overwhelmed leaving a nearly useless traffic jam 24/7.