Why You're Totally Justified In Hating Data Caps

Going over your mobile data cap limit costs more than a long distance phone call from a hotel room and for what? Crossing some invisible line in the sand drawn by your carrier? Brian Boyko explains exactly why data caps don't so much protect network infrastructure as generate revenue. [Blogphilo]


    For data caps to be genuine, we'd have to believe that's how much it actually costs telcos to provide internet.

    Can anyone actually believe that?

      What it costs telcos is irrelevant. It's worth what people will pay, and we pay what they say it's worth.

        Perhaps its worth is what we're prepared to pay until the ACCC gets to have a look. I believe the cost to a telco of handling an SMS is 0.2 cents or thereabouts per SMS.

        What I dislike about caps is that if I go over the cap I get charged but if I stay under I don't get to roll it over (or get a refund).

        Except we pay a consistent amount, regardless of what they say it's worth. Consumers generally say something like "I'll pay in the range roughly 30 - 50 per month for internet access on average" and Telcos decide what they'll dole out for that.

          Then how is it that some of my European friends have uncapped broadband at a (large) fraction of the cost I'm paying for capped broadband? Surely their ISPs should go bust!

          And just because we in Australia have been forced into thinking some "high" price is reasonable it doesn't mean the price is.

    Oh boy, where do we start with this?

    Wrong, Wrong, Wrong....

    As mentioned before, i work in this industry. Without boring everyone to death, this video creates many strawman arguments, misrepresents the field of play, and lies about the aspects behind data caps. This person also seems to insert multiple factoids without actually quoting anything!

    Also, this person seems to have no idea on how TCP/IP works, nor how the data is actually transferred from A to B.

    To be honest, anyone who works in IT (and actually WORKS in IT), will know that this video screams "I'M ANGRY, lets look at wikipedia, gather some completely disorganised figures together and completely misrepresent the situation. At the same time ill just chuck in some random buzz words for good measure"

    Really, Giz has matured to the point where they should know better.

    At the end of the day, Data caps exist (in Australia anyway) to dissuade users for getting into habits where they are used to downloading anything, whenever and however they want. We have seen this in America where they charge based on speed of download rather then overall amount. We now see that American ISPs are unable to augment their Access and Core networks due to a low ARPU (average revenue per uer), and an immense throughput requirement.

    They are now implementing caps on downloading, so that people start to evaluate their usage, and in the hope where they will stop using the internet as much as they do now. However, Americans are so used to no caps, that they will fight back and we will see a lot of broadband providers falling over, over the next few years.

    Ill finish with this, it costs about $3b per year to support the current fixed internet requirements for 6 million Australian homes. This costs money. Either you pay more or you use less.

      I call utter bullshit on this argument. Caps are fine to an extent, its the dishonesty that's the problem: namely, the insane additional charge for exceeding it and the fact you don't get any roll over if you don't use data you've paid for. I'd accept one or the other. Really though, a reasonable additional charge for exceeding the cap (i.e. paying your way), would be fair.

      At the same time, all of the major networks have moved to rounding up data sessions to the MB, which is the new flag fall. It's just totally dishonest.

        You are talking about something different - the charge for exceeding your cap, and how you are charged for your usage. My points are around the technical aspects.

        Now, to address your points, lets us first look at the excess charge for exceeding your cap. This is in essence, a mechanism that companies use in attempt to bump you up a level. The capacity planning arm of the business will use the combined total download+upload allowance per month to determine where and when investment is required to support the demand. They also use a number of processes to determine peaks and troughs.

        The issue is when people exceed their caps (and trust me, many, many do), the job of maintaining the SLAs gets quite tough. Unfortunately unlimited headroom can not be built into the network, and while there is usually a small buffer, it is not always able to handle a few extra PBs of data over a week coming from 10,000 customers.

        The other side is of course, to ensure that we have enough revenue coming in to satisfy the cost of investment. If you go over your cap (more then once) then it usually means you need to jump up a band, and pay more because you are using more. The excess charge is designed to make you think "well, i would rather be safe then sorry", and allows us to better serve you.

        At the end of the day, Australia is a very, very expensive place to invest in telecommunications gear, so we must invest wisely. To do this we must understand the requirement, which a part of can be understood through what our customers are expected to do in a given month.

          I went over my cap once. By my estimate, roughly 30MB. Paid a $300.00 phone bill instead of $72.00. Explanation?

        If you don't like the cost of going over the cap (I understand, I don't either), maybe you should use an ISP that uses shaping instead.

          Give me a list of providers that shapes your 3G bandwidth once you reach your cap ? No i didn't think so. They don't exist because it far more profitable to make large sums of money off people for excess charges.

          Shaping never used to exist in ADSL\cable broadband back in the day either until the competition added this feature and then the duopoly had to do the same.

      What I don't get is his congestion only comes from people using the internet not the amount of data they're using argument. Yeah, sure networks are designed to share bandwidth between users, fine. But if your data is capped and as he suggests you use the internet for less time and watch cable TV. Wouldn't that mean you would be lowering congestion. Ya' know, by not using the internet as he pointed out. Or does he live in a world where everyone is so dependant on being connected that even when they're away and on a capped plan, they still are compelled to have speed limited downloads running in the background so as to cause network congestion but not run over a data cap?

        Yes, the person behind the video has.....interesting arguments to say the least.

      Oh boy indeed!

      Perhaps slowing down or cutting them off instead of charging thousands of dollars would be better.


        That is a business decision - not a technical one.


          Oh I'm sorry, I thought this article was about how Telcos use caps to generate revenue. Apparently it's about technical decisions? I must have misread.

          Yes, jackass. As in, you're making a fool of yourself.

    This fella makes a LOT of assumptions...

    Would love to see him come up with.

    A. Cell towers that can provide data throughput that always exceeds customer demand while always providing high speeds.

    B. Amazingly fast & cheap back-haul connections to the towers which allow people to have unlimited data caps

    C. Do all of that for the same price

    D. Go and implement any other service in a consumption industry where people do not have to pay based on their consumption rate and still maintain a profitable business - good luck with that business model.

    Caps are a fact of life here in Aus...

      Infact it will get worse with the NBN, which delivers caps for both data AND speed.

        Pretty sure that ever since we moved beyond dial-up, we've always had both. Of course, you'd pay for a certain speed, and you won't get it unless your house is next door to the local exchange.

    Really you are paying for the Telco to implement more capacity as demand grows. If you want unlimited you will have to pay for it becaue it uses more of the system, therefore the company has increase their capacity. A telco buys limited amount of bandwidth for it's own customers off companies life Telstra, it then on sells this at a rate it deams will attract customers for a service customers will be happy to pay that amount for. I moved from TPG to Internode because I was unhappy with the quality of service I was getting (speeds and reliability sucked), despite being an unlimited plan. I now "pay moe for less" but I am much, much happier with the service, both the product and support. It costs Internode more to free up the capacity on their alloted bandwidth, therefore I should pay for it... and I do.

    Last edited 16/01/13 3:11 pm

    It annoys me to no end that we've had data caps (and pretty stingy ones if that) for donkeys years now, nothing is said or done about it. Yet as soon as some US people start getting it, everyone's up in arms about it.

    Now it's all about net neutrality, internet providers aren't allowed to give unmetered access to some content. Here in Australia that's a feature.

    Why do we wait for these things to happen to Americans before we start getting angry about it? How about we stop relying on them for these things and do things for ourselves.

      Cameron, the very fact that the US has not put a cap on usage has gotten them into the position where they are unable to augment their network to cater to the growing capacity demands of their customers.

      Thank your lucky stars that we in Australia have had caps.

      Every time an ISP in Australia releases an Unlimited plan, they pull it back after 4-12 months because they cant support it.

      From your house to the undersea cables that connect Australia to the rest of the world, there would be at least 25-200 devices that your traffic might go through (and no, doing an tracert wont show these). The cost of these devices is quite high (especially when you get into CRS1s, that are the backbone of the internet traffic in Australia).

      the point here is that it cost A LOT of $$ to move traffic around australia. If you are ok paying $100,000-$5M a year for unlimited access to the internet (which is what most SMEs pay), then go ahead

        My point isn't if data caps are right or wrong, it's that the issue isn't raised until it becomes an issue for the USA.

        The argument about "net neutrality" can very much be applied here, but it never does.

          Sure, the USA drives a lot of discussion. The reason for this is that Australia is not seen a a big enough player around the world to be doing anything by itself (internally), so most people are scared of saying anything, before someone else does from the USA, China, UK etc.

            Except that we ARE a big player. Australia is by no means the small weak country we once were.

            What a load of BS. We have our own media outlets. They don't say anything. We're building our own broadband network. Yet still no discussions on net neutrality. Just look at sites like this one, it's just filled with irrelevant junk from the US, just like this video. Where's our local content?

    I have 200mb on my S2 with vodafone, yes its pathetic and I really have to watch my use just reading the news and checking the weather.

      If you're not on a plan ditch Vodafone and grab a Kogan sim. Unlimited Calls and Test + 6GB data for $30 a month using the Telstra network. It's boss.

        Holy crap, thanks i was shopping for a new deal just yesterday. i cant wait to ditch vodafone, my coverage is terrible.

    Thank goodness you're in IT. I don't know what we'd do without you!

    On behalf of Australia, I thank you...

    Data caps would be fine if they were reasonable. I live in Tasmania, connected to a regional exchange. My ISP is Internode, and while they're great, the only plans I can get are Reach plans. That translates to 70 bucks a month for a paltry 60 gig between 4 people and custom firmware on the router to divide that up in little mini-quotas. Oh, and on top of that we have to pay another 23 bucks or so for line rental. So, that's basically 93 bucks for a piddly 60 gig. I just switched our phone provider to Internode so we can get 20 bucks off the next available plan, which is 150 gig per month. All up it'll cost us 100 a month. It's a bit better, but still pretty crap.

      Better than what a lot of us without 'obsolete' copper ADSL get.

    The fact that he stoops to using the first amendment to defend unlimited data plans beggars belief. The fact that he did so using a medium that is inherently so wasteful of data is... illustrative of the issue at large. Your freedom of speech will be far less impinged by reduced bandwidth and data caps should you choose to communicate via text, rather than 12 minute Youtube clips.

      Ooh, well said.

    Massive assumptions. Strawman arguments. Statements such as "the amount of data you download has nothing to do with network congestion".

    Yeah. I'm gonna go with no.

    Caps are in Australia, because of the way our ISP industry grew out of Telstra's monopoly. They are a sensible and easily understandable way for ISPs to sell a manageable quantity of product to consumers. Speed tiers are another. BOTH the speed of AND the amount of data you use have an effect on congestion. We use both. The US uses speed only and that has got them into the pathetic situation where their networks, both wireless AND landline, are straining under the weight of 150 Million Americans using the internet for whatever they want whenever they want. Vodafone went from 5GB caps to 2GB caps (normal mobile plans) after Vodafail.....yeah, caps have NOTHING to do with network congestion.

    This guy also doesn't seem to realise that while TCP/IP DOES resend packets if dropped, 3 things occur when that happens regularly:

    1- Latency- Resending takes time. Even over landlines. Too many dropped, latency goes from 20ms, to 200ms to 2000ms....bye bye gaming, VOIP, Skype, even browsing etc...

    2- Collisions and drops mean, as the gent said, data gets resent....that means overall MORE data is sent over the network, even when the network is already too busy and it'll KEEP getting sent, contributing even more to congestion.

    3- Even IF all TCP/IP stacks workout bandwidth between them....that doesn't really help when trying to download that 4GB game at 50Kbps because 20 000 others are doing the same....

    Would you rather pay $80 a month for 200GB @25Mbps and GET 25Mbps anytime? Or $80 a month for 100Mbps and Unlimited and MAYBE get 25Mbps from 10pm-8am?

    Yeah, I'll keep my cap and speed thanks. Just give me the NBN so this "up to" bollocks goes away.

    Last edited 18/01/13 9:32 pm

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