No one is saying caps, in principle, ought to be illegal, the argument you seem to be attacking.
The article is arguing that the caps are out of sync with the actual scarcity of the resource. Prices are rising and caps are dropping, even though bandwidth is becoming cheaper and more available. That suggests the caps aren't being used to make people pay for resources they use, but rather to trick people into spending money they didn't realize they'd be on the hook for. That's sneaky and skeezy.
It's like the banks that charge a $50 overdraft fee on each of six trivial transactions. No one is saying there shouldn't be a fee, but if it's turning into a significant profit stream, something's not right.
My point is also to counter the outrage over usage-based pricing. What is so unfair about the idea of ISPs charging per/KB similar to how an electric utility charges per/KWh?
Prices are rising for services and commodities in almost every industry. For instance, cotton has hit record highs this year, food is more expensive, gas is higher, etc. We're in an inflationary economy right now, so I don't think ISPs should be singled out for raising prices as their costs increase (e.g. they have to pay rising utility costs, salaries/benefits/health coverage, property taxes, etc). Perhaps what should be examined is change in net profit margins for ISPs that cap usage, but even if that rises, it is hard to know with certainty if the "sneaky and skeezy" "tricks" were the factor. One could argue if their tactics are indeed so "sneaky and skeezy" that they would loose business in the long run and negatively impact their profit margin.
My point is also to counter the outrage over usage-based pricing. What is so unfair about the idea of ISPs charging per/KB similar to how an electric utility charges per/KWh?
I don't have any problem with usage based pricing. ISPs don't really want that either though. They want to push users to a high priced tier and then hope the users don't use the entire bucket each month.
Look at AT&T cell phone data plans for example. They used to have a $30 plan that was 'unlimited'. This plan really had a soft cap of 5GB, so $6/GB. I find that a very fair price. Then they changed to 2 plans, one for $15/250MB or $25/2GB. I bet they did some analysis and found out that most users use 300-500MB/month so they made the plans to push people into the higher plan with the hopes they would not use the data. If they were really concerned about high usage they would have just moved to a flat $6/GB (or something similar), but then most people would ended up paying $6-$12/month.
I'm not sure utilities are a good comparison point for two reasons. The first is that the marginal cost of internet data is near zero while the marginal cost of electricity generation is not. Secondly, utilities generally are more highly regulated than ISPs.
The reason it can be distasteful when an ISP raises its rates or limits its services is that ISPs often have a monopoly over many of their customers. At best most people get to choose from a duopoly, so the ISPs don't really have to compete in a free market.
The marginal costs of commercial software is even lower, but most vendors charge in a mostly linear manner; it's not like they decrement their prices for each sale they make to keep a steady cost-to-price ratio. Why should they? If enough people want to still voluntarily purchase their product/service, they should continue to try and make as much money as possible. If their are few good options, then the market is ripe for competition to help bring the incumbents back to offering better values.
Isn't this a site revolving around entrepreneurs in IT? Doesn't everyone want to make more money then they spend?
If the market was actually open for competition, then there would be alternatives and no-one would complain about caps, they'd just move to another provider.
The fact that bitching about the caps is people's only option should tip you off to the fact that the market is not, in fact, open.
There is definitely competition, but even if there wasn't, that would mean that the existing provider was good enough. What's stopping more alternatives from appearing besides this? Probably looming legislation more than anything. If you really hate it, instead of spending your energy lobbying for regulations, go start your own ISP that gives everyone the world for a lower flat rate. I'm sure you'll stay in business for a long time.
In countries where there is actual competition between ISPs, such as Sweden, and other parts of Europe, there are no caps. And our ISPs don't seem to suffer for it. I'm sure they'd love to have caps, but the first one to do it will just start bleeding customers, and none of them can afford that since the market is saturated.
I have a throttle cap on my mobile internet though, I can use as much internet as I like on my iPhone for a flat fee, but if I go over 5GB in a month, they may throttle my speed for the next month. That's pretty fair, I guess, but they're building out 4G now with even faster mobile internet, so those caps are probably going to disappear slowly as people move over to newer technology with more bandwidth than the current 3G/EDGE systems.
Where I am, I can choose between nine different ADSL providers, one cable provider, and about six different mobile broadband providers. All of them want me to switch to them, and they differ slightly in pricing, bundling, triple-play, customer service, speed, etc.
That's not what I'm asking. I have multiple providers of DSL internet, cable, and mobile providers, all with varying services, pricing, etc. Each one applies caps.
Where you are, are their lies that affect providers in that area? Or is it all pure competition?
Did those 9 ADSL providers all lay their own line, or is their laws in effect that make those providers lease their lines out to other providers?
The copper network is owned by TeliaSonera, the former state telephone monopoly, but they were forced to open that up to competitors so anyone could install DSLAMs in the phone stations, etc. There's competing national fiber networks as well, so no ISP has a stranglehold on the DSL market.
There's no competition and choice for cable though, you have the cable company you have, and that's it.
For GSM networks, there's three separate, and two or three 3G networks, so there's competition there as well.
In a few months my house is gonna be hooked up to the city fiber network, at which point I can choose from another bunch of ISPs.
The article is arguing that the caps are out of sync with the actual scarcity of the resource. Prices are rising and caps are dropping, even though bandwidth is becoming cheaper and more available. That suggests the caps aren't being used to make people pay for resources they use, but rather to trick people into spending money they didn't realize they'd be on the hook for. That's sneaky and skeezy.
It's like the banks that charge a $50 overdraft fee on each of six trivial transactions. No one is saying there shouldn't be a fee, but if it's turning into a significant profit stream, something's not right.