Bandwidth Caps Are an Artificial Barrier to Preserve Profits from Real-Time Delivery of Television Over a Wire


Mon, Mar 21st, 2011 13:00 by capnasty NEWS

The Economist has this fabulous article explaining the sudden arrival of bandwidth caps in Canada, the U.S. and now England. The sad reality isn't an issue of fairness, congestion or a handful of selfish heavy users, but a last ditch attempt at maintaining control of television over a wire to the home:

The use of caps allows providers to dish out bandwidth with one hand and take it away with the other. The companies have vastly increased the capacity of various copper, coaxial and fibre lines, but artificially separate out a portion -- at least half and often much more -- for video which a set-top box or a broadband modem spits out as an apparently distinct service. Cable firms simultaneously push out hundreds of digital channels, while telecoms firms rely on multiple digital streams from live broadcast or cable TV or on-demand pay-per-view. It is as though the water main were divided as it entered the home and a steady, modest stream was made available for showers and at the tap, while most of it was always at the ready for a coin-operated washing machine.

Meanwhile, in an August 2010 quarterly call, Bell Canada's CEO George Cope explained to his shareholders how usage based billing allows them to monetize on the growth of video usage on the Internet. As Michael Geist explains:

While there is nothing wrong with Bell maximizing revenues for its shareholders -- that is what it is supposed to do -- no one should be under the illusion that UBB is anything other than a revenue maximization strategy in a market with limited competition, not one premised on fairness or network congestion.



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