Legal Law

Monopoly US ISPs are taking full benefit of the Covid disaster

We've found for years that broadband usage caps are bullshit. Leaked ISP documents and public statements have repeatedly made it clear that usage caps and obsolescence charges are just glorified price hikes on the backs of trapped customers made possible only because of the monopoly of the industry (and the regulatory capture and corruption in Congress that lets it get away with) are with it).

This has been a problem for decades and worsened during a crisis where broadband is essential for survival (health care, work, distance learning). The Trump FCC made some performative, empty gestures towards this issue earlier this year when it announced a completely voluntary commitment to ISPs who agreed that they would temporarily stop charging late fees or impose usage restrictions. Not only did many ISPs ignore their promise, but it was only a few months before most ISPs got back up and running as usual due to the vacuum of accountability with bogus fees and surcharges created by the removal of net neutrality.

Apparently, the Wall Street Journal tried to shed some light on the problem this week and wrote an article about usage restrictions and how they affect ordinary people. Unfortunately, half the story is filled with claims by the bullshit industry that just aren't true. Like here, where the Journal reinforces an alleged expert who tries to claim that usage restrictions are necessary to recoup network investment costs:

"Data constraints also help keep Internet package prices stable by shifting the extra costs onto heavy users," said Mark Trudeau, managing director of broadband data company OpenVault, which tracks more than one million US subscribers. "It protects the majority of subscribers from annual price increases," he said.

That is nonsense. For one thing, US consumers are already paying some of the highest prices in industrialized countries for broadband due to monopoly, government registration, and apparent corruption in Congress. That's before you even get to arbitrary usage restrictions, obsolescence fees, or the ocean of misleading surcharges that big ISPs use to covertly increase the advertised price after the sale. Caps "do not protect the majority of subscribers from price increases" but are completely artificial constructs that make high prices even higher. Worse still, they are being used in an anti-competitive manner by incumbent ISPs.

The Journal also undauntedly parrots the false claim that such restrictions are necessary to "handle the congestion of the network":

“Not only do data limits help ISPs generate more revenue, they are also a way to reduce network congestion and strain. The backbone of the internet held up pretty well in the early days of the pandemic, despite considerable pressure. "

The US Internet has held up pretty well because our core network infrastructure was solid (it "s the" last mile "that sucks because of limited competition) and network engineers are smart. However, executives like Sonic CEO Dane Jasper have found that static caps for all users don't help manage the congestion. Leaked Comcast documents and independent research have repeatedly confirmed this, forcing the industry to completely back out of justification a few years ago. There are certainly extremely heavy users out there, but ISPs already have the option of leading those users to a more expensive plan: migrating to a business service.

While it is nice that the Journal could cover the issues that arose due to entrenched monopolies during Covid (The Sector) is primarily only helping to maintain bullshit business practices in the first place.

Monopoly US ISPs are taking full advantage of the Covid crisis

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