Video Succinctly Answers Why Carriers Use Data Caps - Hint: Numbered Paper

Discussion in 'Android News' started by dgstorm, Jan 16, 2013.

  1. dgstorm
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    dgstorm Editor in Chief Staff Member Premium Member

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    Just in case you didn't already know, and/or wanted confirmation for your theories, a blogger has gone to the trouble of sharing an informative and fairly entertaining video explaining why Data Caps from ISPs suck, and why carriers use them. One of the most fascinating details included in this video is how the blogger pokes gaping holes in the carriers' argument that network congestion is the reason they do it. He makes it painfully obvious why this "excuse" is bogus, and points his gaze squarely at the real culprit.

    I'll give you a hint... it rhymes with funny and does nothing until you move it to someone else. Share your thoughts on this intriguing topic. How important is it to keep the internet as open and as inexpensive as possible? Is there a way we can cut back on corporate greed while still maintaining free enterprise?

    Source: AndroidCentral
  2. 52brandon
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    52brandon New Member

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    is it....... a bunny?

    a nose that's runny?

    a nice day that is sunny?

    surely, it can't be about the money?
  3. lloydstrans
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    lloydstrans Well-Known Member

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    That's funny, honey, trying to be punny.

    Just puppy footing around. (auto correct)
  4. jspradling7
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    jspradling7 Active Member

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    I've heard it explained like this, I don't know how correct it is but it sounds right to me.

    People are simply "talking" less. Providers used to sell minutes of voice time and they tossed in data to entice users. Now, they sell amounts of data and toss in voice. The providers have to find a way to get back the huge profits they enjoyed selling 1500+ voice minute plans. 50 dollar a month unlimited data plans that people use to VOIP and text on is not near as profitable a 150 dollar a month voice plans.
  5. comk4ver
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    comk4ver Member

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    I really like this explanation makes sense!
  6. lloydstrans
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    lloydstrans Well-Known Member

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    Bean counters doing what they do best.
  7. kodiak799
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    kodiak799 Well-Known Member

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    It always makes me laugh how people cry greed and being charged too much as they shell out the cash. Clearly most people never took economics, or simply don't understand it. Companies are in business to make a profit. Shareholders (investors) demand a return. That's how the economy grows.

    These networks require(d) massive amounts of capital. If they were to just give it away because "it's the right thing to do" they never would have raised the capital to do it in the first place.

    You really don't need a data plan on a cell phone. If it hurts that much, don't pay it.

    And what most people don't realize is in most cases the carriers pay cable companies for the pipes that connect you to the internet - their towers just connect you to the pipes. If they offered unlimited tethering and people start ditching their home broadband and cable, then those companies would have to recover their losses by jacking up what they charge VZW, AT&T, etc.
  8. lloydstrans
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    lloydstrans Well-Known Member

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    Most people miss this concept in economics 101.

    Just puppy footing around. (auto correct)
  9. Jeyman
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    Jeyman Member

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    there are few none data plans around. outside track phone and what not I cant think of anything off the top of my head that will sell you a damn cell phone that does not require data. So in a way this goes out the window. Yes you can claim there are ways out there. However you have to look for it and its not always easy to find. I mean hell Lets look at T-Mobile; they are almost as cheap as you can get, yet their cheapest plan? unlimited data(4~5GB at 4g speeds) 150min of talk time for $30 a month.

    yet their talk plans are up at 50~60(with capped data) something is just not right, the idea of economics is not just S=D. As you should also understand prices should drop when there are a few strong players in the game(forget the name been way to long) as they should be scared to lose their customer base. Yet this is far from the truth. The reason? in many areas there is only one or two mobile network providers.

    So yes we have the 4 main players(at some point this is going to be 3 lets not play ourselves) but in any given area outside a major city we have 1~2. So from a national standpoint we should have low pricing and very little change in that pricing. But in a given area this does not hold true.

    Example: I live right outside NYC. One would think we would have a fair amount of providers to pick from, right? wrong, while yes we have t-mobile, sprint, Verizon and AT&T in my area the coverage for sprint blows(no 4G and 3G is god slow with dead spots inside most buildings for calls even) and T-Mobile is nothing to right home about. This leaves us with two options if you want a fully functioning phone. And that just so happens to be the 2 most expensive big dogs in town.
  10. macpro88
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    macpro88 DF Super Moderator

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    "What is... Money?"

    Yes!?!?

    Now where's my cool million $$....

    Great video/article, and blaming money is always a good place to start when companies do things, you can never go wrong with that answer.
  11. kodiak799
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    kodiak799 Well-Known Member

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    Even if this were true, you are not required to continue paying for data. You could drop it the next day.

    And we're not talking about S=D, we're talking about movement along the D curve and its inelasticity which goes to profitability.

    Again, when people feel entitled to something they arbitrarily set a ridiculously low price in their mind and then complain about being charged more. In their world, if they "need" something it should be cheap to buy, regardless of how much it costs to produce.
  12. mantispid
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    mantispid New Member

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    Ah, but this vid wasn't just about mobile broadband. It was about actual in-house cable/DSL/FiOS/etc. broadband... and caps being put on that.

    The problem here, is that there isn't enough competition. In most areas, you have the choice of one cable provider. The data cap issue wouldn't be much of an issue if customers kept flocking to whichever provider did not have data caps. It's monopolistic strong-arming where the competition is low enough to allow it to occur. This is even more of a problem in areas where such providers are statutorily limited. >_>
  13. kodiak799
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    kodiak799 Well-Known Member

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    C'mon, who needs 250gigs of data a month? The only way to realistically hit that, without downloading illegal torrents, is if you watch A TON of Netflix//Hulu/etc.

    In other words, people are using their broadband to ditch cable and on-demand movies for cheaper alternatives. Naturally, cable is going to respond to recover those losses. Someone else is going to provide content cheaper, so they are going to capture part of that consumer savings for delivering the service.

    Or think of it this way - cable and other services were subsidizing your internet. Now people start dropping that cable and other services and there's nothing to subsidize your internet, so its cost must increase.
  14. Jeyman
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    Jeyman Member

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    none mobile is very easy to hit that 250GB a day limit. 5 people in my house. I use netflix as my only TV style. most of us do> I play video games its not hard to hit 250 GB in a single month. I have unlimited but iv looked at my data and its broke 2TBs. I dont use torrents as an fyi.

    ya we are data hogs but well we live on the internet. My mother does her work on the PC, and it requires files to be moved. Large files.
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