NNSquad - Network Neutrality Squad
NNSquad Home Page
[ NNSquad ] Re: User sues AT&T after $5000+ bill for exceeding 5 GB bandwidth cap
So why can't I buy two data plans? I would put a smiley face here but the absurdity is beyond what that would express. Perhaps I could defend ATT by noting this is simply collateral damage out of a reasonable attempt to allocate fixed costs across a resource by using an arbitrary assignment of costs per bit. Same for SMS. It’s no different from a restaurant charging you as if the food were the high expensive when the real costs may be in rent a staff salaries.
But you don't get these extreme anomalies in restaurants (even if you order that $600 bottle of Port) because the restaurant can’t get away with it and can’t violate our sense of reality.
The problem with telecom is that by the time we’ve taken all our infrastructure and wrapped it into the telecom framing we’ve far more detached from reality than artificial cheese-like spreads are from Elsie the cow. The problem is compounded by the carriers’ arrogance because as a group the completely control our ability to communicate and they use it to create value through synthetic scarcity.
Before we throw around all these "costs" let's remember that are talking about so many layers to arbitrary models that they are meaningless. Yet in defending their charges (like the story of cruise ship that captured a passenger’s cellular signal while in port resulting in a $27K data charge rather than a $0K incremental cost) they pretend there are real resources being used lest they jig be up. Or that they have chosen signaling systems that don’t scale.
Brett Glass wrote:
> At 04:50 PM 3/3/2009, Sean Bradly wrote:
>> However, this is what not what AT&T elects to charge you for
>> 15GB/month: ($60+$5000(10GB overage))*12(months)*2(years). *That's
>> $121,440 folks. That's 2800% markup.* Thats a 30 year mortgage.
> That's a bargain. It's a fraction of the cost of the spectrum needed to
> deliver that much bandwidth. Remember, companies like AT&T bid up to $3
> million on tiny 5 MHz slivers of spectrum, which one user could consume
> completely by downloading data 24x7.
Then neither AT&T nor anybody else could make money by selling that
_first_ 50GB for $60/month. They would be losing money the way GM is,
and soon be out of business, or at least out of the ISP business.
I think Brett's mistake is mixing up the cost of _cellphone_ bandwidth
with the cost of transporting bits by other means. Understandable,
because Brett _is_ in the wireless ISP business.
But most large ISPs aren't wireless. They have large cable plants,
either for deliver phone service (Telcos) or for delivering cable TV
(cablecos). While those cable plants cost a lot to build, most of them
are already partly or totally amortized by the existing telephone or
cable business model. (I'm almost sure that some of them have been
completely "depreciated" by now, especially in the largest and densest
Similarly with the cost of transporting those bits between ISPs. Most
large ISPs are _already_ "tier 1" providers and peer with other Tier 1
providers, either without settlements or with settlements at a much
lower rate than the cost of cellphone bandwidth.
I suspect most of the traffic is carried by landlines of one sort or
another. Or they are carried by microwave, but it doesn't use expensive
frequency spectrum that covers an entire city. It uses some chunk of
frequency spectrum from dish A to dish B, with essentially no
interference to or from other users of the _same_ spectrum using dishes
that are pointed somewhere else.
The only time the spectrum even starts to get scarce (and expensive) is
if you have to go through a satellite (because the signal spreads out to
about 2 degrees of longitude (or was that 2 minutes -- it's been a long
time since I read the Cato Journal article on satellite scarcity) by the
time you get to geostationary orbit).