If I had a dime for every article I have seen since AOL went to flat rate back in 1996 that foretold the coming end of flat rate internet access plans and the inevitability of metered pricing, I'd have so much money I could actually afford what wireline providers dream of providing as a monthly fee. Despite the “inevitability” of metered pricing for nearly 15 years, it hasn't happened and I don't expect it any time soon. Why? Because not only is it wildly unpopular with the customers (it is one of the few things powerful enough to overcome the switching cost for anyone with a choice), but the economics of it do not make a heck of a lot of sense. Heck, Comcast (the largest residential broadband provider) announced in its earnings call on 4Q 09 that it is reducing its capital expenditure on network capacity for 2010 because it has nearly completed necessary upgrades for DOCSIS 3.0, which gives it all the capacity it needs for the foreseeable future. “We don't need to invest anymore in our network because we have all the capacity we need” is a might inconsistent with “we need to switch to metered pricing so we can afford to expand our network capacity and create incentives against 'bandwidth hogs' and other mythical beasts.”

I can forgive wireline providers for indulging in metered pricing fantasies, while admiting them for perpetuating the useful myth og limited capacity to ward off regulation. But when this article on the purported inevitability of metering wireless plans. This strikes me as “Keep The Government Out of My Medicare” lunacy.

As the article itself concedes without saying directly, wireless broadband plans are already metered. Blow past your monthly usage cap and you will pay per-minute charges. For those not old enough to remember, this was the old AOL metered pricing model. You got ten hours for free, then got charged on a per-minute basis. They abandoned it because customers hated it and moved to flat rate price plans. So what wireless providers apparently mean by “metered” is “find a away to reduce the usage cap further by pretending to call it something else.” I expect this will not catch on any better than the efforts to change pricing structure on the wireline side, and for the same reason. The economics don't make sense.

Which brings us to the next lesson on network economics. The cost structure of building and maintaining the network is marked by high fixed cost and low marginal cost. That is to say, the vast majority of cost comes from building the network itself, regardless of how many customers use it. Once the network is built, the actual marginal cost of each customer is fairly low. Even an intense user does not “consume” very much of the network resources (the supposed “bandwidth hog” is a problem only because network capacity is ridiculously oversold). The argument that the majority of subscribers subsidizes the few “bandwidth hogs” is simply rubbish. The question is simply how obscenely high a rate of return can the network operator squeeze out of each customer.

Back in the old days, we used to require providers to prove cost. Sure we had metered pricing, but that was so that the very profitable areas could subsidize the high cost areas. Nowadays, we rely on “the market” to regulate cost, with the result that profit per customer for the major providers continues to rise. I'm cynical enough to wonder if that's why we see this endless parade of speeches by network operators and articles by their sycophants about the “inevitability” of metered pricing — so we will thank our lucky stars that when we are outrageously ripped off that it is at the “bargain” of overpriced flat rates.

Stay tuned . . .

Don't know if you've noticed, but there's been a lot of gloomy stuff going around. Altogether too much of it, frankly. So here, apropos of whatever, to counterbalance that gloomiosity, a man who brought joy to my yute in giant carts full — and who still does.


Wow! Oooooooooooooooooh! Lah dah dee dah da deeeeeeeeeeeeeee! Hah! Wow!

I have a fondness for the 3.65 GHz band for a number of reasons. In the first place, I was heavily involved in the the fight over the rules. For another, it seems to be filing an important niche in the wireless broadband ecosystem. So I was pleased when the FCC's Wireless Bureau resisted the invitation to get involved in interference disputes in the band. OTOH, it also highlights the value of having a referee with jurisdiction in case something does go wrong.

I know I'm getting to this late, as the decision came out at the end of December, but it's been a busy time. More below . . . [Read More!]

I'm a member of the volunteer firefighting company of Tisbury 651, a ladder truck that also goes by the nickname Tisbury Tower One, on the island of Martha's Vineyard. Saturday morning, three days ago, my company was called out to a fire on Christiantown Road in West Tisbury, a town that borders on Tisbury, under a mutual aid arrangement between the towns. The fire was at the home of Danny Prowten, a 63 year old thirty-year veteran of the West Tisbury Volunteer Fire Department. Mr. Prowten, whom I never met, died in the fire.

Many of the firefighters, EMTs and police who responded to the call, and all of those to first arrive, knew Danny Prowten well. Some of them had been his firefighting companions for twenty years or more. As I came to learn, he was reknowned for his courage and selflessness.

Newspaper accounts of the fire appear here and here and here, but they all say pretty much the same thing (and anyway, it's not at all clear that any of these outlets actually had reporters on the scene — or if they were there, that they were allowed to stay anywhere nearby. I certainly didn't notice anybody who wasn't fire/police/EMT or family.)

I spent about seven hours on the call, and about two and a half hours at a “critical incident debriefing” Sunday, so the events of this past weekend are very much in my mind today.

Below, a few bloggish remarks slightly edited from notes I jotted Saturday & Sunday nights--just my way of decompressing.

R.I.P., brother Prowten.

UPDATED I have added and deleted some things since first posting. Please see the first paragraph after the fold. [Read More!]

I cannot claim to know Chairman Genachowski very well. But the remarks below, given as head of the U.S. delegation in commemoration of the 65th Anniversary of the Liberation of Auschwitz, mark him as my brother on a level that goes beyond all levels of politics and policy.

Ezchor! Lo tishcach I will remember; do not you forget. [Read More!]

So today, depending on how you reckon such things, more or less marks the end of the legendary Silicon Valley company Sun Microsystems, where I worked from January 1986 until April 1994 (badge #1387). Here's a photo (taken today) of me behind a giant-sized beer mug that I got from Sun on my 5th anniversary. It says, “In appreciation for five years of service in the Kingdom!”



In addition to this beer mug, Sun gave me a fantastic education in hardware, software, management and office politics; a chance to spend at least one night in every hotel on the entire length of El Camino Real from Sunnyvale to Burlingame; lots of good friends and fun times; money, and most of all an inspiration for Monty Meekman, the nastiest villain in the best. novel. evar written about Silicon Valley, my very own Acts of the Apostles.

Below the fold: The day I almost put (Google CEO) Eric Schmidt's teeth down his throat.

UPDATE
My dear wife says this post makes me sound a whole lot angrier than I in fact am, and she's right. I just thought it was funny that two of the most arrogant bigwigs I encountered at Sun went on to become bigwigs at Google, an outfit that's known for its. . . arrogance. Most of my memories of Sun are of good friends and interesting challenges. (And a whole lot of airplane travel and hotel rooms.)

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[Read More!]

You've seen those TV advertisements for the “credit card” mafia front called Capital One. “What's in your wallet?” they ask. Well, I used to have a Capital One so-called “credit card”¹ in there , but I cancelled the account last year --I'm still paying down the balance-- so I have nothing with their name on it in my wallet to remind me that I'm still their bonded serf. What I do have in my wallet is this:

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It's the pawn ticket from when my wife pawned her jewelry, including her wedding ring & family heirlooms, for cash to keep us going when we were homeless in 1996 when I was writing Acts of the Apostles.
[Read More!]

For those interested, I'll be appearing on the Kojo Nnamdi Show on Tuesday, January 26 (tomorrow). I'll be on for a discussion of the future of cable with Greg Sandoval and Derek Thompson. Should be fun and interesting, as I hope to talk about things like our set-top box petition, the SOC Waiver, and how all this ties in with TV Everywhere, overt-the-top video, Comcast/NBCU, and the general “cable digital transition” as more systems convert to all-digital. Should be fun — if you are the sort of person who reads this blog.

UPDATE: You can listen to the Kojo show here.

As long as I'm doing the self-promotion thing, I'll mention three other events where I'll be speaking.

February 16: The Administrative Law Review event on Regulatory Change Under The Obama Administration at the Washington College of Law at American University.

March 15: Law Seminars International Telecom Conference in Seattle.

June 10: Pike & Fisher's Broadband Policy Summit VI, where I shall square off against the ever popular Scott Cleland on everyone's favorite topic “Who are the Internet Gatekeepers and Should They Be Regulated?” [I know, big suspense on which of us will say “Google” an which of us will go on about ISPs, switching costs, and all that other stuff.]

Stay tuned . . . .

I remember how I felt when the media announced the fait accompli that W would be the next president. Twice. This is worse. [Read More!]

Never underestimate the power of local media, although I can't really say if this made a difference. But Senator-elect Scott Brown (R-MA) has his own public access cable show he uses to keep in touch with his constituents.

It shall be interesting to see if this has any impact on his approach to cable issues, although I suspect he is unlikely to get on a committee where this would matter.

Somewhat more seriously, it underscores the importance of staying in touch with your constituents, and the importance of PEG regardless of political allegiance. Brown won, among other reasons, because he actually went out and campaigned. This also wasn't some clever act of pretending to stay in touch with constituents. Looking at his record here, he has been doing local cable show for years, and doing local events.

If one truth is emerging from the spate of special elections from NY-29 to last night's MA race, it is that politicians cannot phone in their campaigns and expect the party affiliation (either their own or their opponent's) to carry the day. Ya gotta work it. So the next time local cable access programmer asks for an interview, don't snort “Wayne's World, right” and blow them off. Take a lesson from Scott Brown — commitment to local media matters.

Stay tuned . . . .