ISPs' costs, revenues don't support data cap argument

[Nod]

Source: http://arstechnica.com/tech-policy/...s-revenues-dont-support-data-cap-argument.ars

Data caps and metered billing have generated significant consumer resistance not because the idea of metered billing is always bad, but because the new packages on offer feel like highway robbery. Proponents of such caps, like Time Warner Cable, often claim that people need to "pay their fair share" in order to fund future upgrades, so we rounded the quarterly earnings statements out last week from the major US ISPs in an attempt to gauge how accurate that argument might be.

It turns out that just about everyone is making huge margins in Internet access, revenue is surging even as costs drop, and companies like Time Warner Cable have actually reduced (significantly) their capital outlays on infrastructure.

Even those cable companies that are in the midst of their DOCSIS 3.0 upgrades are posting significant profits. Here are the highlights.

The bottom line. Internet upgrades have real costs, of course. When cable users increase their data usage, the ISP eventually needs to spend some cash to split the local node or upgrade the CMTS (cable modem termination system) to DOCSIS 3.0.

But the costs aren't ruinously high. The largest ISPs peer most of their traffic; apart from running the peering point, such exchanges of traffic between major ISPs are free. The infrastructure used for both cable and DSL was already in place and paid for; even in the case of Verizon, which is running an expensive new fiber network, the company still doesn't need to impose data caps or proffer insultingly low monthly data plans to recoup its investment.

Companies can say what they like, but when it comes time to reporting the numbers, it's clear that being in broadband is a good place to be.

Read more at the link above.

Wonder how the situation is for our telecom providers? Are they so much different than the companies in the US?