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[StopTheCap] The Myth of Usage-Based Billing: Providers Would Not Dare Offer Real UBB - Page 2

post #11 of 74
Quote:
Originally Posted by Traches View Post
After $9 billion in revenue... so 12%. High, but not absurd. There are industries that return higher percentages.

Don't get me wrong, I'm no fan of comcast and if they choose to provide poor service at a high price they will deservedly go out of business. It's just that when people start thinking internet should be free, I start thinking people are idiots.
Also to agree with your previous post. Revenue != Profit.

Can't forget a revenue is matched with an expense, including tax... office and admin expenses, supplies, etc. They don't actually have that much money left over.

Although with the conservatives in power there have been alot of tax breaks, so it probably isn't as bad as it could have been.
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post #12 of 74
Quote:
Originally Posted by Traches View Post
After $9 billion in revenue... so 12%. High, but not absurd. There are industries that return higher percentages.

Don't get me wrong, I'm no fan of comcast and if they choose to provide poor service at a high price they will deservedly go out of business. It's just that when people start thinking internet should be free, I start thinking people are idiots.
Internet shouldn't be free it should be fair and neutral. And now a day internet should be cheap... not a cash cow. I dream the day when internet will be free like water here in Quebec would be so lucky to live here .
    
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post #13 of 74
Quote:
Originally Posted by Traches View Post
After $9 billion in revenue... so 12%. High, but not absurd. There are industries that return higher percentages.

Don't get me wrong, I'm no fan of comcast and if they choose to provide poor service at a high price they will deservedly go out of business. It's just that when people start thinking internet should be free, I start thinking people are idiots.
Agreed, the internet shouldn't necessarily be free (I hesitate to imagine what the restrictions on it would be if it were free), but if you imagine it to be like a utility, then under any sort of legal business practices, there's no way a utilities company would make $1b profit per quarter, and not be asked what was going on with their business model by whatever auditing body is supposed to be watching over them, since they're offering, in terms of how net access is an integral part of our modern society, an essential utility.

If you assume--and it might not be 100% true, but it essentially holds as a simple model--that every household that gets electricity, also probably has a computer and some sort of internet access, and that our society is moving more and more toward a net-based one. Isn't internet access shaping up to be a utility? Like electricity? If I recall correctly, PG&E, here in California, in 2010, had a quarterly profit about $250 million for the same quarter as the comcast record that we talked about earlier. Isn't that disturbing?
    
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post #14 of 74
Quote:
Originally Posted by Traches View Post
After $9 billion in revenue... so 12%. High, but not absurd. There are industries that return higher percentages.

Don't get me wrong, I'm no fan of comcast and if they choose to provide poor service at a high price they will deservedly go out of business. It's just that when people start thinking internet should be free, I start thinking people are idiots.
Well now your being ridiculous, no one is saying internet should be free. Their saying companies that sell air shouldn't be allowed to gouge customers on what is essentially a two tier pricing scheme.

I've heard it all the time them say "only 2% of our customers will go over the caps." If that is true then why implement caps at all? They know that businesses are expanding online and instead of building improved infrastructure they implement caps that will give them a cut.

You say that other businesses have higher profit margins but with internet providers profit is guaranteed as long as they keep the bits flowing.

EDIT: also you have not seen cap's until you come to Canada and get a Bell or Rogers premium pack which gives you a whole 60gb/month on the best plan.
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post #15 of 74
the lower the profits, the better
post #16 of 74
Quote:
Originally Posted by james_ant View Post
Their saying companies that sell air shouldn't be allowed to gouge customers on what is essentially a two tier pricing scheme.

I've heard it all the time them say "only 2% of our customers will go over the caps." If that is true then why implement caps at all? .
1. Come on. If all they are doing is "selling air", then you don't need to buy it.
2. Getting 2% of their subscribers to pony up more could mean 2% more revenue which either is used to upgrade the infrastructure or payout to shareholders. It could be a substantial $ amount.
3. It isn't a 2-tier pricing scheme, it is a 2-tier pricing structure. Nothing scheming about it - use a lot more than the average bear, pay more. People shouldn't have a problem with paying their fair share.
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post #17 of 74
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Originally Posted by guyladouche View Post
but if you imagine it to be like a utility, then under any sort of legal business practices, there's no way a utilities company would make $1b profit per quarter, and not be asked what was going on with their business model by whatever auditing body is supposed to be watching
ugghhh. I don't want an auditing body looking over internet services. If we had that we would still be using dial-up modems.
Competition has driven services and prices. If there is third party meddling in driving down prices, you are not going to get the internet you want.

Water, gas, electricity all operate as monopolies and there is oversight for that. But look at the cost side too. At least in California, took forever to get remote meter reading capability...and it still doesn't work. We added 10M people in the last couple decades but no more water resevoirs.
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post #18 of 74
Quote:
Originally Posted by gooddog View Post
1. Come on. If all they are doing is "selling air", then you don't need to buy it.
2. Getting 2% of their subscribers to pony up more could mean 2% more revenue which either is used to upgrade the infrastructure or payout to shareholders. It could be a substantial $ amount.
3. It isn't a 2-tier pricing scheme, it is a 2-tier pricing structure. Nothing scheming about it - use a lot more than the average bear, pay more. People shouldn't have a problem with paying their fair share.
1. the unfortunate trend is that our society is being based more and more around internet access. Eventually it will get to a point where you can't do "normal" tasks without it--we're pretty close to that already. When you get into selling a "necessary" utility, that's when further regulation is needed. That's what he meant (I'm guessing). Not that the company is selling something that has no value.

2. 2% of their subscribers paying more does not mean 2% more revenue.

3. It's a 2-tier pricing scheme (look up the definitions for scheme--it doesn't necessarily imply deceit). It's 2-tier, regardless of whatever word you want to use to describe it, in that a subscriber is first getting charged a high premium for the speed of a package they choose, and then getting charged again with how much data they use (sometimes it's data used beyond a cap limit, sometimes it's not). A proper business model would be either charging the premium, without any added restraint, or charging a small fee (like a "hookup" fee that utility companies charge), and then for the actual data used thereafter. Not a hefty subscriber fee for a speed package, and then another fee for a data-usage package.

The thing is that there isn't a huge price differential that people pay for the lowest-end, lowest-demand users, and the people who use a huge amount of bandwidth. The people on the lower end most definitely are not paying for what they use, and even the people on the higher end are paying too much even though they use more than most, because there's no one to step in and make sure pricing is normalized.

Quote:
Originally Posted by gooddog View Post
ugghhh. I don't want an auditing body looking over internet services. If we had that we would still be using dial-up modems.
Competition has driven services and prices. If there is third party meddling in driving down prices, you are not going to get the internet you want.

Water, gas, electricity all operate as monopolies and there is oversight for that. But look at the cost side too. At least in California, took forever to get remote meter reading capability...and it still doesn't work. We added 10M people in the last couple decades but no more water resevoirs.
Competition between...whom exactly? In a ton of cities, there's only one choice for internet service. In my current town, you can get DSL through AT&T, or you can get cable internet through the local cable company. Those are the only two options. And I don't live in podunknowhere, I live in the bay area of California.

And don't be a drama queen. We wouldn't be on dial up still just because there's some oversight entity to ensure fair pricing for customers. Besides, I'm not saying that 5-10 years ago we needed regulation in this area. I'm saying that we do now, since it's becoming less of a luxury item, and more of a necessity in our society. Same things happened with electricity and water and natural gas as well.

The auditing body I implied was to ensure that prices and services were being delivered to the customers on a fair basis, and that no one company was gouging customers, or double-charging, or not properly investing money into the infrastructure.

And to address this point:

Quote:
At least in California, took forever to get remote meter reading capability...and it still doesn't work. We added 10M people in the last couple decades but no more water resevoirs.
10M, mainly over densely-populated, metropolitan areas. Where do you expect reservoirs to be built in that case? And to my knowledge, unless we have a dry season, we've never had to worry about water rationing or anything like that. It's not like more people in the population will be unable to have access to these utilities, or is paying an unfair amount for them based on their needs/wants. If it weren't for regulating entities that would most definitely not be the case.
Edited by guyladouche - 4/1/11 at 2:27pm
    
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post #19 of 74
Quote:
Originally Posted by DuckieHo View Post
By that statement... You do not understand how insurance rates are calculated then.

Look up what actuaries do.... It is risk analysis.
Exactly this, he doesn't know how insurance rates are calculated, it sounded as if he believes that the insurance companies just raise the rates because they want to rofl.
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post #20 of 74
Quote:
Originally Posted by gooddog View Post
1. Come on. If all they are doing is "selling air", then you don't need to buy it.
2. Getting 2% of their subscribers to pony up more could mean 2% more revenue which either is used to upgrade the infrastructure or payout to shareholders. It could be a substantial $ amount.
3. It isn't a 2-tier pricing scheme, it is a 2-tier pricing structure. Nothing scheming about it - use a lot more than the average bear, pay more. People shouldn't have a problem with paying their fair share.
You mean "payout to shareholders." In fact, Comcast's broadband division is now the company's most profitable. They charge you more than $45 a month for a service that costs them well under $10 a month to provide. The reason for the low dividend payout is the company is hoarding cash again, using broadband profits to deal with the more challenging cable TV division, and paying enormous compensation packages to top floor execs. $33.1 million for the CEO last year alone, and that doesn't cover another $60+ million paid out to other execs at HQ and regional divisions, and their middle management support team.

If you want a silly dividend, buy stock in Frontier Communications, which often pays out more in dividends than bottom line earnings.

Comcast's infrastructure upgrades consist of DOCSIS 3, a win-win for everyone because it is comparatively dirt cheap to bond multiple channels to support their broadband network -PLUS- they get to sell premium-priced tiers of higher speed service which delivers higher profits.

The heaviest users also tend to be the ones who want the fastest levels of service, so they pay the most for service already. Comcast pays pennies per gigabyte in traffic costs, so heavy usage on a DOCSIS 3 network brings negligible expense at their retail prices.

There is no "fair share" argument to make unless you assign a dollar value to broadband traffic far, far in excess of its actual cost. In fact, broadband costs for virtually every provider have dropped incredibly over the past five years, as have their real-dollar investments in their broadband infrastructure.

Paying a "fair share" would also mean dramatic cuts in broadband bills for consumers, but that never happens. In fact, we pay some of the highest broadband bills in the world even without usage caps. Now providers want to implement them to capture more money in the marketplace duopoly -and- protect their video business from cord cutting.

We've proven time and again usage caps are never about fairness -- they are about money. In an under competitive marketplace with no oversight or regulation, they get punitive and expensive quickly. Just ask any Canadian.

Phillip Dampier
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