Share good ideas and conversation.   Login, Join Us, or Take a Tour!
comment by user-inactivated
user-inactivated  ·  337 days ago  ·  link  ·    ·  parent  ·  post: FCC plans to vote to overturn U.S. net neutrality rules in December

Supportive of your argument, it used to be that AT&T and Verizon would both rake customers over the coals with their data prices after they got rid of their unlimited data plans. As soon as companies like T-Mobile, Sprint, and smaller carriers started to offer reasonable alternatives, AT&T and Verizon had to settle for smaller rakes and coals that burn slightly cooler.




wasoxygen  ·  337 days ago  ·  link  ·  

I found the offending page, a menu of mobile internet packets available as add-ons to mobile accounts with MEO, the largest landline operator in Portugal.

The same menu appears in the list of unlimited mobile plans.

So customers can choose from S, M, L and XL plans which offer unlimited voice calls to MEO numbers and a variety of data amounts:

   S €14 for  1 GB

M €22 for 1.5 GB

L €32 for 3.5 GB

XL €60 for 30.5 GB

That's a wide range of rates, from €14/GB for low-volume users to €2/GB for power users.

The add-on options provide an additional 10 GB for a few selected services in that packet for an extra €5, the same discounted rate that the power users get.

As far as I can tell there are no restrictions on how you use the data in the base plan. A cost-sensitive customer who wants to use Facebook a lot but can't afford the power-user option can get the small plan and add 10 GB for Facebook at the power-user rate. If the user also wants to use WhatsApp a lot, they can add another 10 GB for WhatsApp at the power-user rate. If they also want to use YouTube a lot, they can add another 10 GB for YouTube at the power-user rate.

And they can mix and match these options however they like. If they want all the options, they can add all five add-ons for €25.

Everyone likes choice, right?

veen  ·  337 days ago  ·  link  ·  

    Everyone likes choice, right?

I agree, this offering isn't bad because it is additional choice onto not too bad plans in the first place. I don't think that's the argument here - the problem is about giving more power to ISPs, whom I don't trust with that power.

It enables ISPs to be massive, colossal dicks if they can get away with it. (As in, if they lose a few customers but gain a lot of revenue, they totally will stifle people's internet.) While it is currently about adding options, what's to stop them from slowing your internet down solely to get you to pay more for 'packages' to 'unlock the full experience'? They can just put up speed bumps and charge you for removing them. That might not be a problem in a competitive, big market but that's not how the internet market is these days in most countries. Why won't this result in a race to the bottom in oligopolies?

wasoxygen  ·  332 days ago  ·  link  ·  

    this offering isn't bad because it is additional choice onto not too bad plans in the first place

Why do you say the plans are not too bad? Do they satisfy a legal standard of non-badness? Or are you comparing them to what is offered by other providers? These plans would have been miraculous a few years ago, and they will be horrible a few years from now.

Satisfying customer demand is the driving force behind offering these options. Profit is the main motivator, no question, and the most successful firms maximize profit by focusing on customer satisfaction.

    what's to stop them from slowing your internet down solely to get you to pay more for 'packages' to 'unlock the full experience'?

What stops any business from degrading product quality, then adding an extra fee to restore the quality? (And then doing so again and again?)

While most people are appropriately cynical about corporate behavior, in this case people are not cynical enough. They have already jacked up the price as much as possible right up to the point where they risk losing profit to the competition. They already provide the very minimum (measured by cost to provide) that they can get away with, before too many customers switch to alternatives.

veen  ·  332 days ago  ·  link  ·  

Alright, let's talk plans. I consider them not-bad partly because of my frame of reference. Another thing is that they are far removed from my imagined 'worst nightmare' non-neutrality situation. I'm sure you've encountered this argument before, but I'm gonna bring it up anyway: what if internet is going to go the way of cable tv?

In this imagined world, companies have slowly persuaded people to get bundles for their most popular apps (like the kinda good deals in the Portugal example). Because people don't want to increase their internet fees too much (or at all), they downgrade their base bundle. So most customers then have a few bundles and a small base bundle. Each bundle has a data limit (because fair use).

There's a bunch of things I don't like about that scenario, which I think is likely to happen. Most notably, it is a world that heavily favours incumbents. You're not going to make it with your film streaming site Flatnix if Netflix is already in a popular bundle. The ISPs would probably ask a nice fee from each company that wants to join a bundle, one that will only make it harder for David to beat Goliath. Hubski would never be in a bundle, so that means I can only 'ski with that smaller bundle.

Secondly, with more bundles to keep in check, there will be more overcharge fees, which are probably super lucrative for ISPs. My mom is on social media all the time, and I had to explain to her that she really needs to turn off LTE and turn on wifi whenever she is at home or at work. Her bill almost double her actual plan for multiple months when I found that out.

Neither of those things are better at satisfying customer demand than our current, net neutral world.

    They already provide the very minimum (measured by cost to provide) that they can get away with, before too many customers switch to alternatives.

This is a good point and I don't have a good comeback to it. But as the above kinda shows, if profit is the main motivator (which we both agree on) customer demand is not the driving force. I think that the current local optimum of value per dollar offered to customers is higher than what we would end up with in a world where all ISPs would do a bundle-like thing like I described. I would much prefer ISPs increasing the price for all customers a little, instead of them increasing the price of visiting sites that they don't care about or don't favor.

wasoxygen  ·  332 days ago  ·  link  ·  

    what if internet is going to go the way of cable tv?

Cable TV greatly improved access to television content compared to over-the-air broadcast, with more and more channels and packages available year after year.

The FCC used a light touch, requiring a "basic tier" of local channels and a few extras, but otherwise practicing literal neutrality: leaving decisions about pricing and packaging of additional content between the providers and their customers.

Cable TV companies created a smorgasbord of options to try and appeal to a broad cross-section of customers. Big content creators like Disney negotiated to get less-popular channels bundled together with popular channels like ESPN.

Customers always complain, but wired cable penetration passed 70% by 2000. Canadians objected to the bundling, so the CRTC required "skinny" TV capped at $25 per month, with additional channels available individually. Customers were not impressed with the results.

    "Am I allowed to laugh?" said Gilda Spitz when asked for her reaction to the prices for the new line-up of stand-alone channels offered by Rogers. Most cost $4 or $7 each.

    ...some industry experts are not surprised by the pick and pay prices. That's because, they say, TV providers are for-profit companies, and their main objective is to protect the bottom line.

    "What did you really expect?" says telecom expert Gerry Wall.

Today, only half of U.S. homes are wired for cable, as more and more households opt to cut the cable and stream online. We have pay-per-view, "catch-up" TV, monthly subscription models, near video on demand, push VOD, and all kinds of telecom bundles and tie-ins with mobile and home telephone service.

Even if you only pay for broadband internet, it is impossible to run out of free stuff to watch.

Is this the kind of "nightmare" scenario you are worried about?

veen  ·  331 days ago  ·  link  ·  

    Cable TV greatly improved access to television content compared to over-the-air broadcast, with more and more channels and packages available year after year.

More and more packages - for more and more money, with the good ones of course spread over multiple packages. Check out that graph! It rises 3 times faster than inflation since 1998.

My argument is that the same cost hiking is bound to happen with internet if the FCC is gonna do this. The airline industry might serve as a good corollary to this. Airline seat pricing is time-dependent and, if the airlines had their way, customer-dependent. Do you know the concept of willingness to pay? It's the bread and butter of airline pricing: each person has a dollar value in their head that represents what they are willing to pay for a service: anything above and they won't buy a ticket. The only goal that shareholders want an airline to pursue is to get every person in every single seat to pay as close to that price as possible.

The most lucrative passengers are people who fly for business reasons, since the cost/benefit calculation is nearly always positive. If airlines could charge you more for traveling as a business-passenger they would, but they're not allowed to directly discriminate like that. But pretty much all business passengers want to be home on Friday or Saturday, so one of the best ways for airlines to figure out if you are a tourist or a businessman is to offer a cheap ticket that has your outbound flight before Saturday night and the inbound after. This is called the saturday-night stay, and while good competition can destroy it, the airline industry in the US has consolidated so much that it is pretty much standard now.

My "nightmare" scenario is that price-practices like this will also be adopted by ISPs. They have your internet history anyways, so they can totally figure out how rich you approximately are. Net neutrality also prevents discrimination between customers, if I understand it correctly.

Infrastructure costs are important, but it's not like cable companies aren't making plenty of money - the problem is that they let the customer pay for that kind of stuff, because capitalism. Also, wouldn't it be an argument for net neutrality if internet penetration is larger than TV cable penetration?

user-inactivated  ·  337 days ago  ·  link  ·  

I think it only works as long as A) it's not too limiting and B) it doesn't cost you more to get everything altogether with the packaging system then you were able to before when everything was bundled together.

There's definitely room for argument on both sides.