NNSquad - Network Neutrality Squad
[ 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. -----Original Message----- 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 cities.) 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). |