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If the Water Company Acted Like Comcast

01 Apr

I tried to come up with an understandable analogy of why Comcast, and the other ISP’s think it’s okay to put data caps on everyone. (You do know they are trying to do that, right?)

This is how I understand it…

Say a water company puts in a two inch line running down a specific street. It’s okay because there are only a couple of small houses, no pools, and no businesses down that street. Everyone can use as much water as they like. Not a problem.

Time moves on and a few apartment buildings spring up on that street. And a business with a huge water fountain. A few people put in pools, which takes away from the business of the water companies indoor swimming pool, too.

Same small two inch pipe serving all those houses, but now there are days when the water runs at a trickle. Other days when some of the houses at the end of the street can’t even take a shower.

The water company knows it could just come in and put in bigger lines. More water available, everyone is happy, and their water bill doesn’t change much because it’s still the same water.

Or, they can ration it. Rare items are worth more, right? Plus putting in bigger lines would cost money and drop their profit for the year. Bigger lines would also open up opportunities for bottling companies to come in and put out bottles of water, taking some of their profit. It would encourage more houses to add pools taking away from their indoor pool revenue. What if an ice factory moved in down there?

“I know,” says an exec at the water company, “lets just give our customers a choice. They can pay for the lines to their house to be upgraded, giving them extra water if they like, or they can deal with what they already have. Lets also put a cap on how much they can use so we can try and limit the growth of fountains and swimming pools in that part of town. We’ll also get a revenue boost from those going over the limit. Win win.”

So the company with the big fountain, and lots of money, pays for construction workers, plumbers, and contractors to get an upgrade on their building, but the little houses at the end of the road can’t afford it. All of that work costs too much. So they deal with the low pressure water, and days without showers even though they really want the upgrade. They give up their plans of getting that pool because the overage on water would just be too much. Besides, they can just go swimming at the club down the street, right? It costs $20 a day, but it’s the only swimming in town.

The exec’s at the water company look at their spread sheets, see very few customers upgrading, and reason that it really isn’t as desirable as the people keep wining about. Some of them are still going over the cap, which means more profit for them, but that’s all for the better.

So… it’s a combination of greed, unwillingness to update lines, and customers inability to force the companies to do it. It results in a scarcity (or false scarcity) of product, high prices, caps, and little to no competition. And since they also own the cable companies… well why the heck would they want you to watch netflix if you can just turn on cable TV?

I know this example doesn’t translate exactly, but it does show it’s not just one thing causing caps. It’s a bunch of things. Specifically an engineer told me bandwidth behaves less like water (which is pressurized) and more like traffic. The more traffic on the road the harder it is to get cars (packets) through.

However you look at it, the fact remains: ISPs could choose to upgrade their infrastructure. They were even given money from the federal government, or tax money, to upgrade and they didn’t.

Draw your own conclusions.

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Posted by on April 1, 2014 in Commentary

 

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