Tech News Today 199/Transcript

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AT&T will enforce bandwidth caps on DSL and Fiber
TM: Dave Berstein posts on twitter than AT&T lied to WSJ about network congestion.

BB: it's a hard problem to fix people using too much bandwidth, right?

TM: unlike cable and DSL, each customer has a connection to the central office (co), and it's aggregated in the D-slam, that's the access multiplexer.
so, all they need to do if there's network congestion is add capacity to the d-slam. you don't have the people sharing on node issue that you have in cable.

BB: So maybe it's not complicated, but certainly it's got to be very expensive, and that's why they have to do these caps right?

TM: well, it's relatively in-expensive to upgrade the d-slam and the back hall connections to relieve the congestion. There might be other congestions problems at the local and regional switches but you can upgrade those, so, no, it's not particularly costly.

BB: okay, so it's not costly but these guys don't have much money, right, they are being squeezed because there is a recession on, right? that's why, They don't have the money to invest and that's why they need the caps, right?

TM: That's an interesting question, Brian, I looked it up. AT&T Posted 20 billion dollars in net income on revenues 124 billion for 2010. 7.8 billion dollars of that 20 billion was from wire-line. most of their profits come from wireless, but yeah, they made plenty of money.

BB: Um...
TM: so they've got money to spend.
BB: costs are rising though.

TM: well that's interesting, if you've got a lot of money but you know you're gonna be spending a lot of money you want to save it, right?
BB: Right!? So that's why we need caps?

TM: well, uhhhh, AT&T's expenses to operate it's network, pay it's employees, do network engineering planning, buy gear, and even pay property taxes dropped 3.2% in 2010.

BB: well, I'm starting to wonder whether or not AT&T's new 150GB DSL data cap is justified, sir.

TM: sure, we can add capacity, and sure, we're making record profits, and sure our costs are going down, but this is a tough business, Brian, and there are no competitors to hold our feet to the fire so we're going to do whatever we want, that seems to be the message here.

BB: uh, well, good for them, good for AT&T share holders question mark?? I'm trying to find a silver lining on this and it's killing me.

TM: I would venture to say they are liing about network congestion. I am willing to be proven wrong by those who know. DSL subscribers are going down but yet they are putting in caps. profit is going up but they are claiming they can't invest in infrastructure. I just don't understand it.

BB: ... one of the articles I read suggested this may be an attempt to set with really high caps and really permissible penalties, just to get the idea in your mind that it's okay to have an upper bound on how much use you have on the product you are paying for.

TM: you know what, that would be fine, if ATT came out and said, look our business model is to make more money and we're gonna start charging per bit and to get people used to it we're going to put a really high cap and charge you $10 per every 5GB over. but that's not what they're saying. they're telling a sob story to the WSJ, there's just so many people streaming video and so much network congestion and we can't afford the infrastructure. it's not that we want to make money so much as we've got to do this and it's just the way the internet works.

BB: uh, alright, thanks jerks!