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An Iowa ISP's Metered Pricing: What Will the Market Bear?

timothy posted about a year ago | from the prices-as-pressure-gradient dept.

Businesses 479

An anonymous reader writes "The East Buchanan Telephone Cooperative started charging cellular prices for home DSL internet service starting on January 1st, 2014. A 5GB plan costs $24.95 a month while a 25 GB plan will run $99.95 per month. 100 GB is the most data you can get in a package for $299.95 per month. Each additional GB is $5. They argue that the price increase is justified because their costs have increased by 900% since 2009. About half of their customers use less than 5 GB a month while their largest users use around 100 GB a month. They argue that the switch to measured internet will appropriately place the cost on their heaviest users. With the landmark Net Neutrality ruling this week will larger providers try to move to similar price models?"

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It doesn't cost any more to serve more data (1, Insightful)

Anonymous Coward | about a year ago | (#46008639)

Every price increase is just pure profit.

Re: It doesn't cost any more to serve more data (5, Insightful)

Anonymous Coward | about a year ago | (#46008675)

Well as much as I don't agree with this yes it does. More data use by the end user means the ISP has to pay for bigger connections and redundant connections often at that. Yes cost goes up for everyone. However the price of the inter connections have gone down a lot since 2009 so not sure how they have seen a 900% increase other then by adding that many more customers.

no (2)

luther349 (645380) | about a year ago | (#46008747)

my isp oversold are area meaning we had mass slowdowns for months before they fixed it. all in the name of profits.

Re:no (0)

Anonymous Coward | about a year ago | (#46008819)

it takes months to have ISP level circuits installed and set up

Re:no (4, Funny)

Anonymous Coward | about a year ago | (#46008821)

The free market already fixed this problem, if you don't like your provider, you're free to chose another. That's what makes capitalism and America great.

-- Ethanol-fueled

Re:no (4, Insightful)

icebike (68054) | about a year ago | (#46008897)

The free market already fixed this problem, if you don't like your provider, you're free to chose another. That's what makes capitalism and America great.

-- Ethanol-fueled

I don't know the details in this ares, but I doubt they would e setting up this kind of metered service tiers if they had and competition. Its a telephone coop, which suggests small town rural.

Too often, the situation is that there is no viable competition, as the market is too small or too remote to attract competition, or it has been legislated away by cities granting right of way to exclusive contracts.

Re:no (4, Informative)

cob666 (656740) | about a year ago | (#46009035)

Too often, the situation is that there is no viable competition, as the market is too small or too remote to attract competition, or it has been legislated away by cities granting right of way to exclusive contracts.

Sometimes is has NOTHING to do with how small or remote your town/city is. I live in a well populated suburban town in New England and our choices for internet are either Cox cable or AT&T DSL. Cable speeds are between 10-15 Mb but the fastest DSL we can have is less than 5 Mb. Verizon advertises FIOS for our area but if you try to subscribe you'll be told they don't offer it in our town. Many New England towns are vendor locked and the consumers are left with little or no choices.

Re:no (0)

Anonymous Coward | about a year ago | (#46009083)

Well, there is plenty of competition for ISPs in New Zealand, and all the good ISPs have metered pricing. There are ISPs that offer "unlimited" data, but they tend to be slow and unreliable.

The idea of unmetered pricing is kind of insane. It is not like commited bitrate plans large businesses and ISPs purchase, where there is some guarantee of service bitrate. For that you have to pay 100x more, so the implication is either that there is a secret limit or that the service is going to be massively oversubscribed because of all the leachers who just love "unlimited" connections.

Internet is also massively more expensive, by necessity, in New Zealand, as most internet traffic has to cross the Pacific over expensive Marine fiber (possibly the longest fiber optic cable in the world). I do wish ISPs here differentiated local and international traffic, as there is a very large difference in cost which is not passed on to the customer. Instead the local transit user subsidises the international transit user.

Re:no (5, Interesting)

aurizon (122550) | about a year ago | (#46009113)

A rural co-op is owned by the subscribers - is it not? There is no corporate profit. Just the equipment and cost of wages and wiring and tech stuff.
1057 customers, and a build cost of about $3 million = $3000 per customer. This stuff gets obsolete in 5 years or less = buy more, scrap the old = $600 per customer per year = $50 per month each. Thed add electricity, maintenance, tech support, new installs.

They then get the FCC grants which have shrunk a bit (Since 2009, he says, the FCC has decreased access charges by $285,004 and Universal Funding by $282,228, for a total of $566,232 or $531.68 per customer. The decrease is expected to continue. During the same timeframe internet demand has grown by 1,000 percent.)
(He goes on to explain that EBTC has 1,057 customers as of Dec. 31, 2013, and serves a 165- mile area. That means customer density is roughly seven customers per square mile.)

This looks like the typical problem that Canada, Australia and a lot of rural America face = low density of subscribers.

Do they share all cost equally?, or do they try to charge proportionally?

They have the classic small town bind.

If you get a densely built area of apartment houses that can be fully fibered, costs per megabyte can be very low, but not here. If they want the high speed, they must make some overpay (those who use only 5 meg per month), or get some proportional pricing.

With a large corporation, they could over charge the dense cities and subsidize the country sides.

Bullshit. (1)

Anonymous Coward | about a year ago | (#46008945)

I wish this were true, but we don't have common carrier restrictions on broadband/dsl/cable. In other words, The lines and service are provided by the same companies. In most areas, you have 1, MAYBE 2 choices if you are lucky, and those choices are largely completely and totally identical from price to service. Free markets only work when monopolies are prevented, and without the common carrier restriction, the United States has NO protection from this.

Except (1)

daninaustin (985354) | about a year ago | (#46009093)

Except that in many areas of the country you don't have any choice. Where i live (outside Austin Tx) the only wired provider i can get is Roadrunner. Luckily for me they offer 50/5 Mbit unmetered service for a somewhat resonable price. Many years of govt created monopolies and high barriers to entry mean that it will be years before we have real competition.

Not exactly (1)

Anonymous Coward | about a year ago | (#46008983)

Yes, expanding their networks costs money, but they aren't doing that. Instead, they are saying "well, our networks are overloaded, and investments are risky/expensive, so instead we are going to jack prices up until usage shrinks to a level our networks can handle" which is only possible thanks to the fact that we don't have common carrier restrictions on line/transmission services.

This also means US largely has no competition between providers if you even have more than 1 choice, which is very rare. Which is also why they can jack prices up so high without worrying about competition, I mean 25 bucks a month for 5 gigabytes? In the real world it costs the ISP about 0.0005 dollars or less per gigabyte of transmission, including expansion costs, administrative overhead, etc. This markup is so high that it puts the 100,000% markup on some medications to shame.

Re: It doesn't cost any more to serve more data (4, Insightful)

Bengie (1121981) | about a year ago | (#46008999)

Trunk bandwidth is the cheapest part of being an ISP as long as you're not out in the middle of no-where. At $0.45/mbit for dedicated backbone connection. Bandwidth is charged by 95th percentile. That means the customer must average about 2 hours of transfer per day all month long. In order to consume 100GB, that means an average of 7mb/s for 2 hours every day, or about 2 Netflix streams. That would cost the ISP about $3.5, but they turn around and re-sell it for $300. Sounds like easy money. You just need to get your foot in the door. Once you're "that" ISP, you just print cash.

Re: It doesn't cost any more to serve more data (1)

cheater512 (783349) | about a year ago | (#46009105)

Which backhaul provider charges $5/gig?

Re:It doesn't cost any more to serve more data (0)

Anonymous Coward | about a year ago | (#46008697)

Buy 5GB worth of electrons and the rest are free?

Re:It doesn't cost any more to serve more data (0)

Anonymous Coward | about a year ago | (#46008707)

and how much profit is a cooperative phone company making? looks like none

and it does cost more money since you have to buy more bandwidth and faster circuits and maybe more routers which also cost more in support costs

Re:It doesn't cost any more to serve more data (1)

Bengie (1121981) | about a year ago | (#46009025)

Around here, Schools can get access to a co-op that sells 1gb/1gb for $300/month and that comes with a business class SLA and guaranteed speeds. It's a self-sustaining business with no government or private support. That is the cost of 1gb/s, $300.

Re:It doesn't cost any more to serve more data (0)

Anonymous Coward | about a year ago | (#46009071)

i work for an ISP in one of the largest cities in the USA as well
we also make make selling cloud services to small and medium businesses. stuff like phone service for a dentist office that automatically brings up patient records via caller ID

Re:It doesn't cost any more to serve more data (3, Insightful)

khasim (1285) | about a year ago | (#46008713)

It depends upon what the ISP's upstream connection is. In Alaska there were problems because the pipes were only so big but demand was bigger.

But the larger question here is ... is there competition? If someone doesn't like the service/pricing of The East Buchanan Telephone Cooperative can they get equivalent service from a different provider?

I, personally, like the idea of paying for what you use. Provided that there is competition. Otherwise the "average" will keep dropping as people try to limit their expenses and the price will keep creeping up.

Re:It doesn't cost any more to serve more data (3, Funny)

Bengie (1121981) | about a year ago | (#46008857)

If Alaska filled their pipe with fiber instead of oil, it'd be much faster.

Re:It doesn't cost any more to serve more data (5, Interesting)

rolfwind (528248) | about a year ago | (#46008889)

I, personally, like the idea of paying for what you use.

People already paid for what they used. It's called bandwidth, and they brought the tier level they needed. That it was on 24/7 just meant that they got 30 days of it. All the companies are doing is jacking up the price while giving you less time.

This isn't water or electricity. Bandwidth is not a limited resource in the same way. This is just a company trying to keep overselling what it has and not upgrade.

Re:It doesn't cost any more to serve more data (4, Insightful)

beelsebob (529313) | about a year ago | (#46008779)

Score: -1 Factually incorrect.

It absolutely costs more to install a bigger pipe for the ISP. The fact that the ISP has to over provision, and hence a small increase in bandwidth can be absorbed without instantly needing to upgrade the pipe does not mean that that extra bandwidth is free.

Switches, cables and admin systems all cost money, and these costs all increase with the amount of bandwidth running through the system.

I actually applaud them for moving to a metered bandwidth model – it makes sense. What I don't applaud is the blatant gouging. The prices should be roughly 100 times lower than the ones they are offering.

Re:It doesn't cost any more to serve more data (1)

DarkOx (621550) | about a year ago | (#46008887)

Except none of that really matters; because all the 5gb per month users all use the service at the same time. The folks doing north of 100gb are all torrenting or running netflix at all hours of the day.

Realistically if the want to be able to offer actually decent service they have to have the capacity to handle 6pm when everyone starts getting home from work, it costs them nothing to for the high volume folks to be torrenting away at 3am, and nothing for the soccer moms to put Dora the explorer in at 11am while they fix lunch for the runts.

Re:It doesn't cost any more to serve more data (1)

ifiwereasculptor (1870574) | about a year ago | (#46008975)

Since the problem is maintaining transfer speed, it would make more sense to offer heavily discounted plans that would usually provide, say, 35mpbs, but only 1mbps at peak hours (say, 6pm to 10pm).

Re:It doesn't cost any more to serve more data (0)

TheScottishGuy (701141) | about a year ago | (#46008917)

metered bandwidth doesn't actually make 1 to 1 sense with the cost increases, it just works in the real world as a disincentive for use. Unlimited internet connections were a great marketing item when there was no readily accessible way for users to saturate their home connections for more than a minute or two. The whole oversell design for ISPs depends on the concept that only a fraction of your userbase will be using the full bandwidth available to them at any given time. Unfortunately with the rise of streaming services that's no longer the case and so now the oversell ratios that used to be great for ISPs are no longer working. There are 2 ways to solve this: 1. Build bigger pipes: This is expensive and unless you're building enough capacity so that every user can use their entire connected speed it's not going to be a full solution. It gets you part of the way there though. Unfortunately to do this you'd have to pass heavy costs along to the consumer, this probably won't work as long as the other ISPs are willing to sell the same customer a connection for $30-50/month 2. Get people to use less of the pipe: Go ahead, ask everyone nicely to use less internet, to refrain from streaming netflix, hulu, itunes movies etc.. Good luck with that. The only way to get people to use less bandwidth is to charge for it and make them not want to use it. The goal of these pricing plans isn't to earn money for the bandwidth used, it's to encourage the bandwidth hog users to move to another ISP, thereby making them Comcast or AT&T's problem.

Already have metering (0)

Anonymous Coward | about a year ago | (#46009019)

The metering is that you get a 5mbps connection or a 15mbps connection or a 50mbps etc. What this is, is saying that "well yea, but now we are going to charge you as much as it would cost to put your data on a flashdrive and physically drive it to where it is going, because without competition there is no real reason to bother"

We don't have common carrier restrictions on broadband/dsl/cable. In other words, The lines and service are provided by the same companies. In most areas, you have 1, MAYBE 2 choices if you are lucky, and those choices are largely completely and totally identical from price to service. Free markets only work when monopolies are prevented, and without the common carrier restriction, the United States has NO protection from this.

Yes, expanding their networks costs money, but they aren't doing that. Instead, they are saying "well, our networks are overloaded, and investments are risky/expensive, so instead we are going to jack prices up until usage shrinks to a level our networks can handle" which is only possible thanks to the fact that we don't have common carrier restrictions on line/transmission services.
This also means US largely has no competition between providers if you even have more than 1 choice, which is very rare. Which is also why they can jack prices up so high without worrying about competition, I mean 25 bucks a month for 5 gigabytes? In the real world it costs the ISP about 0.0005 dollars or less per gigabyte of transmission, including expansion costs, administrative overhead, etc. This markup is so high that it puts the 100,000% markup on some medications to shame.

Re:It doesn't cost any more to serve more data (1)

robl (53384) | about a year ago | (#46009055)

> What I don't applaud is the blatant gouging. The prices should be roughly 100 times lower than the ones they are offering.

The ISP's costs are still probably about 1GB for maybe $0.01. But this is just simple demand and supply. The demand is increasing and the supply is not. If you are the monopoly and you can control the supply (which they can) then they can dictate the price.

It's not any different than a baseball star limiting the number of signed baseballs he gives to fans every year (say 10) while keeping 10,000 more in his closet.

Re:It doesn't cost any more to serve more data (0)

Anonymous Coward | about a year ago | (#46008787)

Hahahah. I'll send you my Cogent overage charges.

Re:It doesn't cost any more to serve more data (1)

complete loony (663508) | about a year ago | (#46008991)

The last mile pipe to your house may be mostly unused, and free to push more data. But the rest of the network interconnects are usually built based on peak aggregate usage. The backbone connections on the internet have been flooded by only 75K misbehaving [wikipedia.org] servers.

Aggregate backbone traffic may be cheap, but it is a limited resource.

I don't mind metered internet usage... (-1)

Anonymous Coward | about a year ago | (#46008651)

but at the same time the pricing needs to be reasonable. They can make a profit but they shouldn't be able to gouge the consumers.

Re:I don't mind metered internet usage... (5, Insightful)

rolfwind (528248) | about a year ago | (#46008773)

As a customer, I do mind metered internet because it's bullshit.

This isn't electricity (minimal and always on anyway so the difference is negligible, at least for these middle men) or anything, this is about forcing limited supply when there isn't any.

Would you like metered television too? No longer broadcast to you 24/7, now you get to watch 90 minutes a day, and after that you have to pay? Would that make sense to you?

Bandwidth is already rationed by setting speed levels. I already pay quite a bit more a month for the highest speed level residential and businesses even more so.

People rationing bandwidth at night by not using any isn't going to save anyone anything. It's just dark fiber.

More so, I would argue that mindsets like yours is setting us back. The need for speed is what brings us advances, getting us forward, allowing surgeries and other amazing stuff over the net. Metering is just a setback there.

All metered internet will do is make the Cable ISP slobber as they grab netflix and hulu by the balls and cut off their customers through draconian price increases. By some reports, they already lost some 25 million customers. You don't think they want to stem and reverse the flow? They are hurting, and they are hurting because they didn't change with the times (NO, I don't want the sports channels and every other overpriced bundle just to see the 3 channels I watch, fuck off.)

agreed (3, Insightful)

luther349 (645380) | about a year ago | (#46008841)

this craps only starting due to the likes of netflicks and hulu threatening there overpriced packages people are cutting the tv cord and they don like it.

Re:I don't mind metered internet usage... (-1)

Anonymous Coward | about a year ago | (#46008903)

Would you like metered television too? No longer broadcast to you 24/7, now you get to watch 90 minutes a day, and after that you have to pay? Would that make sense to you?

Yes, I prefer that. Why should I pay $50/mo for TV I rarely watch? If I want to watch a show, I'll pay for it. If it's summer and I would rather play baseball with my kids in the yard, I won't. I buy beer that way too, and that's always worked fine as well.

50$ (1)

luther349 (645380) | about a year ago | (#46008967)

hell your lucky its closer to 100$ a month for tv by the time they get done raping you in fees and shit for a decent package.

Re:I don't mind metered internet usage... (1, Insightful)

rolfwind (528248) | about a year ago | (#46008985)

What you are talking is a la cart pricing, and most people who want that still want the channels they want available 24/7 ("unlimited" in that time period) and not just individual shows. They just want to stop paying for all the bundled channels.

The problem with your scenario is that it will make TV more expensive overall.

Imagine a buffet where making the food, regardless of quantity, costs a set amount per dish. They could make unlimited spinach or 5 cups, it will cost the same.

Now, is that buffet better served by charging $20 at the door for all you can eat or charging you $12 per plate? Yes, if they went the plate route, you'd have a lot of people eating less (one plate probably) but they still have the same costs and thus less profit.

TV is exactly like that. A show generally costs the same to license or produce regardless of how many people watch it at any one time (ratings aside).

All it would do is generally lower ratings, lowering their sales, and they'd probably have to start cutting back on the amount of dishes/shows they make.

Re:I don't mind metered internet usage... (0)

beelsebob (529313) | about a year ago | (#46009057)

Why on earth do so many people have this weird idea that bandwidth is unlimited, and free, and that there's not limited supply of it?

Do you think it's free to install switches, and filtering gear, and cables? Do you think that once you've installed it, you can magically transfer any amount of data through those cables you like?

Re:I don't mind metered internet usage... (2)

rolfwind (528248) | about a year ago | (#46009107)

Tell me, when this pricing goes into effect for this ISP, and people shut off their computers/don't download anything at night, what is saved in that period?

A massive amount of electricity? Or water? Was a huge amount of bandwidth saved overnight?

Re:I don't mind metered internet usage... (1)

arbiter1 (1204146) | about a year ago | (#46008801)

metered is fine for some people but the amount they are giving vs the cost is just stupidly expensive. They will be lucky to be in business in 6 months less they change that tier-ing.

How has their cost increased? (1)

Anonymous Coward | about a year ago | (#46008657)

How has their cost increased exactly? Unless they mean they are now oversubscribing the infrastructure they have by a lot and its getting to a point where they get forced to upgrade

Re:How has their cost increased? (0)

Anonymous Coward | about a year ago | (#46008837)

individual usage has gone up.

If I build a 100Mbps backhaul circuit and allocate 300 6Mbps DSL circuits to that backhaul and it all works fine because the average total concurrent bandwidth usage is less than 100Mbps that's great. 5 years later though if the average concurrent usage is more like 180+Mbps then the costs are going to have increased to cover that added bandwidth.

The cost to serve a residential subscriber has increased because the functional oversell ratio that you can use to serve that customer has decreased. residential service can't be oversold at 20-50x anymore without users noticing problems.

Welcome to Australia (2)

thatkid_2002 (1529917) | about a year ago | (#46008661)

This is the norm for us... Though we are finally starting to get somewhat reasonably priced Unlimited* plans now.

* Unlimited plan may be limited

Re:Welcome to Australia (2)

exomondo (1725132) | about a year ago | (#46008705)

This is the norm for us...

Really? I've always been shaped when I hit my data cap on broadband, never charged additional for overages. And I've certainly never paid anywhere near the prices they are charging (unless you count the way I used to pay for 'hours' on my old dialup connections, getting 5GB on dialup would take quite a while).

lol (1)

luther349 (645380) | about a year ago | (#46008717)

yep see how the usa works in reverse your getting unlimited net wile we are regressing to limited.

Re:Welcome to Australia (1)

Harlequin80 (1671040) | about a year ago | (#46008749)

Though $200 for 100gb seems a little harsh even by Aussie standards let alone the US "I want it all" standards. I'm on 300gb for $130....

That said I was one of the original Optus cable internet customers where you got unlimited internet over HFC (Hybrid Fibre Coax). That was great for a few years and then they introduce their fair usage policy which was you couldn't exceed 10 times the average user. This was a bitch to monitor as you had no idea what an average user did and I apparantly was not an average user. Then finally they brought in a 3gb per month limit. There wasn't even other plans to choose from. Fortunately at that time we saw an explosion of ADSL2 providers and optus had to compete to keep their customers and now their HFC is one of the best value options (as long as you aren't badly contended).

Re:Welcome to Australia (0)

Anonymous Coward | about a year ago | (#46009001)

Though $200 for 100gb seems a little harsh even by Aussie standards let alone the US "I want it all" standards. I'm on 300gb for $130....

I'm on fios, I can burn 300 gb dl in a day easy, and 150 gb uploading. And I have. With no shaping whatsoever.

I pay $100 odd some bucks with a single TV and telephone bundled (that I never use)

I pity the rest of you suckers.

Re:Welcome to Australia (1)

Anonymous Coward | about a year ago | (#46008839)

I have used iiNet for about 18 months. On ADSL2 I currently pay $59 a month for 300GB of data (Home-3 Turbo plan) plus Telstra line rental. You might want to shop around.

Re:Welcome to Australia (5, Informative)

Cimexus (1355033) | about a year ago | (#46008905)

No, this is nothing like Australia. Those rates are obscene. Australia may have metered internet but the prices are far, far lower.

25 USD for 5 GB? (Australian ISPs would typically give you ~50 GB for $30 AUD, which is roughly equal in value)

99.95 USD for a paltry 25 GB? WTF? 100 bucks in Australia gets you unlimited plans the ISPs that offer unlimited (e.g. TPG) or very-high-quota plans with others (Internode, one of the more expensive ISPs, gives you 1.2 TERAbytes per month for $109 AUD).

This is only "Welcome to Australia" if the Australia you're talking about is the Australia of the year 2000.

Re:Welcome to Australia (1)

thatkid_2002 (1529917) | about a year ago | (#46009099)

OK, true - things have gotten a lot cheaper in the past 5 or so years and I should have made that a bit more clear than I did. However outside of a handful of providers Internet in Australia is still fairly pricey.

The only reason they're able to get away with this (0)

Anonymous Coward | about a year ago | (#46008665)

is a lack of competition in the market.

Re:The only reason they're able to get away with t (1)

arbiter1 (1204146) | about a year ago | (#46008811)

Just what i was thinking to, They are ONLY game in town so everyone is forced to play.

I wouldn't mind the free market (5, Insightful)

rolfwind (528248) | about a year ago | (#46008667)

if there were competitors, and not just vendors screaming free market when they adjust prices but then hold up monopoly contracts with the city/state when a community tries to come together and go their own way.

Huh... (0)

Anonymous Coward | about a year ago | (#46008683)

So this is how america will become a digital 3rd world.

Well that kinda sucks.

wtf (3)

luther349 (645380) | about a year ago | (#46008703)

please have people leave that provider in mass.

Re:wtf (4, Informative)

Trepidity (597) | about a year ago | (#46008763)

Here's a map [openstreetmap.org] showing the vicinity of the city in which they're located (Winthrop, Iowa). I'll let you guess how many options there are for broadband internet there...

i see 3 (1)

luther349 (645380) | about a year ago | (#46008797)

i see 3 dsl providers and a cable one they got options thank god.

Re:wtf (0)

Anonymous Coward | about a year ago | (#46008775)

I call BS on the telco.How in the name of all that is decent can their cost go up by 900% since 2009? I am willing to bet that increase is tied directly to the CEO's bonus or something equally asinine.

Re:wtf (0)

Anonymous Coward | about a year ago | (#46008859)

2009 is when netflix streaming started
the costs were in faster internet pipes that cost tens of thousands of $$$ per month for each one

Re:wtf (1)

tomhath (637240) | about a year ago | (#46008861)

Roughly 350 households in that town. How much infrastructure would the telco cooperative have? They're probably trying to price themselves out of the market because it's a PITA to support.

Re:wtf (1)

misexistentialist (1537887) | about a year ago | (#46009029)

Bandwidth used to cost $1 per sub and now it's $9. Yes, they raised rates by $15/month since then, but gluttons deserve to be punished!

Re:wtf (0)

Anonymous Coward | about a year ago | (#46008815)

please have people leave that provider in mass.

They probably have no other choice other than satellite and cellular, which is common in rural areas.

Re:wtf (0)

Anonymous Coward | about a year ago | (#46009069)

Or en masse, since Massachusetts won't want the greedy bastards left there either. ;-)

-- the mod that upvoted you, Trepidity & your reply

Cutting the cord (4, Funny)

EmagGeek (574360) | about a year ago | (#46008739)

My wife and I are pretty close to just turning off Internet at home. We can only get AT&T, and we can only get legacy DSL at 1.5mbit. Usually when I'm sitting on the PC at home I'm thinking that I'd rather be doing something else anyway, like right now, in fact.

Telephone COOPERATIVE (5, Informative)

Anonymous Coward | about a year ago | (#46008761)

One thing that's getting missed here is what cooperative means. My parents are part of another tele coop in another part of Iowa. Tele coops are relatively common in very rural areas and are owned by the subscribers and, at least in the case of my parent's coop and this coop, the subscribers receive dividends. (see http://www.eastbuchanan.com/about/dividends.htm )

If the subscribers don't like it, they should show up to the coop meetings and have their say in the company that they themselves own.

Re:Telephone COOPERATIVE (1)

fermion (181285) | about a year ago | (#46009075)

Precisely. A cooperative has to cover their costs from a limited number of users. They are often in rural ares, where subscribers have to put in their own utility pole. We all pay a fee to subsidize, but the costs are mostly covered locally. In such a case it may not make sense to charge $40 for an all you can eat plan, where some are data they may not use, and if too many people use too much data then costs are not covered. I mean for many people 5 GB a month is plenty.

Net Neutrality? (2)

tomhath (637240) | about a year ago | (#46008777)

Can someone please explain that connection? Really seems like a long stretch to get the topic back on the table. Maybe tiered pricing is caused by global warming and GMO crops?

Net Neutrally cures all ills! (0)

SuperKendall (25149) | about a year ago | (#46008973)

Didn't you know, net neutrality cures every problem anyone ever had with the internet! It makes sure that spammers can never spam, trolls can't troll, and every post with an F-Bomd is turned to pure love.

Never mind that the Net Neutrality legislation that we had would have pretty much forced all ISP's to this pricing model before too long, unable to make pricing deals with popular streaming video sources... Never mind that Net Neutrality as people are championing it is all about every byte to you being treated "equally" despite the fact that not one person on earth has not wished for network prioritization for favored content since the dawn of networking.

Never mind that this pricing model is totally and utterly compatible with the notion that all traffic is treated equally, and therefore would be untouched by network neutrality legislation...

Re:Net Neutrality? (1)

Mitreya (579078) | about a year ago | (#46008981)

Can someone please explain that connection? Really seems like a long stretch to get the topic back on the table. Maybe tiered pricing is caused by global warming and GMO crops?

If that provider stays and faces no competition it will not take long until they start establishing "partnerships" to make this connection usable again.

For example, Netflix or Amazon for streaming video that does not count towards the cap. It's not so far away -- if the connection is completely unusable, it will eventually be modified by "oh, this partner does not count towards the cap" or "this partner only counts @30% towards your cap"

Re:Net Neutrality? (0)

Anonymous Coward | about a year ago | (#46009049)

I'm not advocating, just attempting to explain.

Without net neutrality they can throttle "expensive" traffic that goes out of their network and keep costs down. They can also give "free" bandwidth for services on their network that will be cheaper. So if Netflix has servers on their network they don't have to pay competitors to pipe the data to their network and that is why Netflix on their service would not count toward the cap, but if YouTube wasn't on their network it would count.

Put in Net Neutrality, they can't differ price based on where you go, so they will charge based on the most expensive traffic they deal with to make sure they don't incur a loss.

Anyways everyone knows that less pirates on the high seas causes global warming.

Your only defense is to increase competition (0)

Anonymous Coward | about a year ago | (#46008781)

Anyone that thinks the status quo is fine, is a fool. The Net Neutrality ruling will be considered by AT&T, Comcast, Verizon, et. al. to be a license to print money. The money grab has started and only bringing in more consumer choices will keep the prices lower. Putting pressure on your local municipalities to break the cable/telco duopolies is the only option.

Will others switch to this? (1)

koan (80826) | about a year ago | (#46008789)

Most likely they will watch and see how this turns out, or even more likely they are all in it together and this is the test.

Oh Hell No! (1)

Adam Simons (2881717) | about a year ago | (#46008799)

First of all: http://www.youtube.com/watch?v=9o19CaOSuD8 [youtube.com]

I hope there is no way people will put up with this. Anyone using EBTC should drop them, and drop them now. If they get away with it there, how long before it becomes a precedent that other ISPs use to do the same?

AT&T/Verizon/Comcast/Cox/Suddenlink, et all CEO: (obligatorily rubbing nipples while saying this) "Hey, people in Iowa don't seem to mind. Let's roll it out nationwide."

lol (1)

luther349 (645380) | about a year ago | (#46008881)

time warner tried this shit and people left in mass in the test zone the idea was dropped.

Clicking the link (2)

TheRecklessWanderer (929556) | about a year ago | (#46008827)

Clicking the link to the provider shows that they provide Cable TV Service as well. This makes it not difficult to figure out what they are trying to do. I wonder how long until one of the other providers comes in and helps them close their doors forever.

Re:Clicking the link (1)

arbiter1 (1204146) | about a year ago | (#46008925)

With this pricing they won't need any help closing doors.

TV lineup seems like it stuck in the past how old (1)

Joe_Dragon (2206452) | about a year ago | (#46008835)

TV lineup seems like it stuck in the past how old is there network?

http://www.eastbuchanan.com/internet/p_registration.htm [eastbuchanan.com]

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Heaviest users? (0)

Anonymous Coward | about a year ago | (#46008863)

They argue that the switch to measured internet will appropriately place the cost on their heaviest users.

My genetics make me this way you insensitive clod!

There doesn't seem to be a "market" (5, Insightful)

Kjella (173770) | about a year ago | (#46008873)

From TFA (heresy, I know):

He goes on to explain that EBTC has 1,057 customers as of Dec. 31, 2013, and serves a 165- mile area. That means customer density is roughly seven customers per square mile. (...) Since 2009, he says, the FCC has decreased access charges by $285,004 and Universal Funding by $282,228, for a total of $566,232 or $531.68 per customer.

These are people in rural areas, where it's not very profitable to deliver service in the first place. Public funding is going down, actual bandwidth going up, a little fiber laid down in the dotcom days is growing old and they're in a short squeeze. These prices smell more of desperation than gouging, it can't be easy to break even with those numbers. I doubt any competitors will move in to take over this gold nugget.

Re:There doesn't seem to be a "market" (4, Funny)

SuperKendall (25149) | about a year ago | (#46008987)

I'm curious, how does it feel to be the only person on Slashdot who READ THE DAMN ARTICLE?

Re:There doesn't seem to be a "market" (0)

fuzzyfuzzyfungus (1223518) | about a year ago | (#46009059)

What kind of welfare queens were they back in 2009 if they've lost more subsidies per customer than a suburban or urban internet connection costs?

Re:There doesn't seem to be a "market" (2)

MtHuurne (602934) | about a year ago | (#46009065)

Also from TFA:

Meanwhile, electronics in each cabinet costs approximately $50,000 but only serves approximately 12 customers/ cabinet, and EBTC says they have updated original components twice bringing total investment to $150,000 for each cabinet, bringing the grand total (for16 cabinets) to $2,400.000.

So they probably bought equipment that could serve a few hundred customers but since there don't live that many people within range, only a dozen are connected. Did they make the wrong purchase decisions or does the equipment that fits their needs simply not exist?

Metering it is the wrong approach (3, Insightful)

DarkOx (621550) | about a year ago | (#46008907)

What they should do is throttle it at peak times, lock everyone down to 2mbt during peak hours, charge extra for everyone who does not want to be snapped

Whoah let me get this straight,... (1)

AbRASiON (589899) | about a year ago | (#46008915)

I'm only glancing at the article here but that seems to be indicating those are the DSL, not mobile data prices, is that right? Those prices are completely insane and I live in Australia. I can get around 300gb per month for $80 or so on ADSL2.

Is there literally 0 competition available in this region? Those prices are ...utterly appalling, virtually making the internet unusable for anything but casual browsing in that region.

What a bunch of liers (4, Informative)

Bengie (1121981) | about a year ago | (#46008929)

costs have increased by 900% since 2009

I call BS. Prices are dropping everywhere. Backbone bandwidth, -50% per year. It costs only $1,800 through $3,000 to do FTTH. At $300/month, you could be the proud owner of a 1gb/1gb dedicated fiber connection in 10 months. If I have to choose between someone being a total idiot or being greedy, I'm doing with greedy.

Re:What a bunch of liers (1)

w_dragon (1802458) | about a year ago | (#46009021)

This is about rural Iowa. The main cost for maintenance is probably getting a person to the area where a problem is. They cherry-picked the date to be in the middle of a recession when they could pay peanuts for someone to drive 3 hours to the middle of nowhere to replace a repeater, versus now when they have to pay 9 peanuts.

lol (1)

luther349 (645380) | about a year ago | (#46008947)

im sorry my new mansion payment yacht privet jet and Lamborghini drove prices up 900%.

EBTC had a healthy profit before this change (5, Informative)

lokidjm (3505611) | about a year ago | (#46008953)

EBTC's profit margins on internet service were above 40% in 2012. See the document below. They have also built out line of sight wireless internet service, so they will not need to maintain those rural DSL cabinets in the future. https://docs.google.com/file/d/0B1MxEnYSkSD_V2ZjdEdfeFNTMnM [google.com] They could easily serve all of their existing customers using wireless if they chose too. Prairie iNet is a company that uses similar wireless technology. They can serve 250 customers per tower. EBTC currently has 3 wireless line of sight towers. Prairie iNet offers speeds of up to 20 Mbps with unlimited usage for $70 per month. They offer service in a smaller town 8 miles south of EBTC. http://www.prairieinet.net/residential/pricing-plans/ [prairieinet.net]

This will turn sharing connections into theft (0)

Anonymous Coward | about a year ago | (#46008963)

So now if my rates go up due to higher usage, I can legally claim that when a neighbor is leaching off somebodies connection that they are stealing from them.

might as well go 4G (1)

Deathlizard (115856) | about a year ago | (#46008965)

Apparently it must not be an competitive marketplace or they just want to find a convenient way of going out of business, since the Local Cable company (if they have one) is going to make a killing there.

Hell, Verizon HomeFusion is about the same price as the 25GB plan. You can drop your phone line, It'll blow the doors off DSL speeds, and it can be added to a share everything plan so the data can be shared with a 4G hotspot/Phone. If you're going to pay that much you might as well get something that's going to travel and be faster.

no problem (1)

albeit unknown (136964) | about a year ago | (#46008977)

I have no problem with this, as long as it's stated clearly up front. What I would have a problem with is not treating all data equally, such as throttling Netflix because it's perceived as competition.

Time to unplug (1)

nurb432 (527695) | about a year ago | (#46008995)

Drive them into bankruptcy. Screw them and their 1980s throwback to the bad days of CompuServe, GEnie and AOL

Free Market Capitalism? Can you hear me now USA? (1)

Bob_Who (926234) | about a year ago | (#46008997)

Write your Congress and Senate and if they can't effect a legislative change then FIRE THEIR ASSES!

Its time we were represented by our electorate and not the K street corporate lobby. Remember, voters must be US citizens but shareholders are from anywhere. Isn't it time we take our government back from Wall Street pimps of the bottom line? VOTE!!

As an Australian, those rates seem obscene (4, Informative)

Cimexus (1355033) | about a year ago | (#46009005)

I'm Australian so are more than used to metered internet access. Unlike most Slashdotters, I like the concept of metered internet, in that it gives you options to only pay for what you need and not subsidise other users so much. Grandpa who just checks his email every day can get by fine on the $15 plan that has minimal allowance, while Johnny McTorrentLeecher can cough up for the large quota or unlimited plans.

But even in Australia, a country with a higher cost of living than the US and less in the way of developed internet infrastructure, the costs of metered plans are far, far lower than those quoted in TFA. 100 bucks for 25 GB is like something out of the early 2000s, when broadband itself was relatively new and DSL was mostly of the 256 kbps or 512 kbps variety. For comparison, the offerings of two Australian ISPs that are roughly indicative of a typical "cheaper ISP" and "more expensive but better quality ISP":

TPG (http://www.tpg.com.au/products_services/adsl2-standalone)

50 GB - $29.99
150 GB - $39.99
500 GB - $49.99
Unlimited - $59.99

Internode (http://www.internode.on.net/residential/adsl_broadband/easy_broadband/)

50 GB - $49.95
100 GB - $59.95
200 GB - $69.95
400 GB - $79.95
1.2 TB - $109.95

(And you can take $20/month off the above if you bundle a home phone service with the same provider too)

Comparing to this, this Iowa ISP's prices are insane. Metering sucks if THAT is what you have to pay (particularly in a country where unlimited plans are ubiquitous for less money).

Metering CAN work well, and CAN be fair (pay for what you need ... light users don't have to subsidize the heavy users). But it requires proper choice of plans (within an ISP) and proper competition BETWEEN ISPs to work. If there's a monopoly then yeah, it's very unfair. Fortunately for all the issues we have with internet in Australia, most people in urban or suburban areas (which is 90%+ of the population) do enjoy good ISP competition. If you have a phone line, then you can get DSL from a wide range of providers (at least a dozen, sometimes up to 20, depending on location).

Re:As an Australian, those rates seem obscene (1)

Cimexus (1355033) | about a year ago | (#46009051)

Replying to myself here, but just had to add, I took a look at the map to see exactly where this ISP serves. It's a tiny little town. In fact, I've actually been there (!?), as I drove from Dubuque to Cedar Falls on a recent trip to the US and this place falls on the highway between them. Small world.

Either way, even in a similar small town in Australia, you wouldn't be paying anywhere near that much, even if Telstra was your only option (provided you had a phone line of course ... if satellite was your only option then it may be comparable).

Already effectively have metered pricing (1)

pubwvj (1045960) | about a year ago | (#46009053)

We already effectively have metered pricing. We pay $125/month for 1.5Mbps. We only get about 90% uptime. If we were to use that at absolute maximum date throughput (impossible) we would get 6GB per month of usage. In reality we only use a small portion of that. So we're paying 5x as much as the plan they're proposing. This is the reality of rural aDSL.

Re:Already effectively have metered pricing (1)

pubwvj (1045960) | about a year ago | (#46009089)

Oh, and one other detail: there is no competition here. The only ISP is the phone company.

worst country ever. (3, Funny)

Xicor (2738029) | about a year ago | (#46009103)

we have one of the most expensive/slowest internet connections in the first world, if not THE most expensive. it is ridiculous that our government allows this kind of bullshit. it isnt just in rural areas that this occurs... it also happens in city districts where the city has a contract with an internet provider to where it is the only one that ppl can get in an area. Our university falls under this category... we are in the middle of a city, but the only internet we can get in the area is time warner... and they use this to totally screw everyone over. we pay almost 30$ a month for 5mbit internet.... and it has a shitty connection.

Wrong question (1)

PopeRatzo (965947) | about a year ago | (#46009111)

The important part of this story is that the costs this co-op has to pay for bandwidth have gone up 900% since 2009.

Maybe someone needs to ask why it costs nine times more to connect today than it did five years ago.

If, as I assume, the increase comes entirely from the telecom who sells the co-op bandwidth, then the Justice Department needs to come down with a heavy foot on the neck of the telecom.

We've allowed just a few companies to control communications for an entire nation. They need to be broken up into tiny pieces.

Maybe it's just the fact of life in a market economy that every so often the top 100 companies need to be blown up by government. Instead, we have the government serving the interests of those companies by granting them de-facto monopolies and monopsonies when it comes to the labor market.

Once you've let things go this far out of whack, it's too late to just deregulate because it will just give those companies a license to steal. Unfortunately, once government policies have allowed monopolies to exist, the only way to set things right is to have government break them up.

Chilling (0)

Anonymous Coward | about a year ago | (#46009117)

I had to pay per minute of connectivity when I lived abroad in the late 90s. That was using 42kbps dial-up modems so the maximum bandwidth consumption per minute was fairly low especially by today's standards. If this practice becomes the norm it will have a major impact on internet use.

I read somewhere that NetFlix consumed a huge percentage of all bandwidth in North America. Paying per megabyte will most likely change a lot of NetFlix traffic.

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