Comcast is dramatically expanding capped broadband markets December 1

Are people really surprised that this is an issue? Comcast has investors that they need to satisfy. How do you satisfy investors? By improving the worth of your company. How do you improve its worth? By improving the amount of profit it makes. How do you improve the amount of profit it makes? By gaining more subscribers, cutting down on costs, and/or increasing prices.

The first option is the most sensible and usually the easiest to accomplish. If you provide a good service, it only takes word-of-mouth to get people to sign up. But, guess what? Subscribers are finite and, after a while, your sign up rate begins to fall well below the level required to obtain the profits you need to satisfy your investors. So that leaves you with cost cutting and price increasing.

How do you cut costs? Well, if you reduce the congestion in your network then you effectively reduce the strain on your infrastructure, resulting in lower maintenance costs. But that will only get you so far. This leaves us with price increases.

Price increases can be messy. If you up your price, your subscribers will get pissed. Luckily for Comcast, monopolies tend to make this much less of an issue. Better yet, thanks to the magic of advertising and tricky legal semantics, they can trick subscribers fairly easily. So they'll throttle your connection to make you want to pay for a better one, introduce data caps that they know you'll exceed to squeeze fees out of you, add additional options to remove caps so you'll pay more with less complaining than when paying overage fees because they know that the internet is a necessity and that people will pay to maintain access, and whatever else they can possibly think of. The internet is very much like medical care, in the sense that it's fairly price inelastic, so without competition they can make all kinds of changes knowing that you'll still pay.

They're having more and more trouble continuing to satisfy investors, so they're doing shadier and shadier shit as legally as possible knowing that they can get away with it. This is unsustainable, but it's just the way it works. And eventually they'll be nothing short of completely screwed, especially as alternatives like Google, who aren't under as much pressure to squeeze out those tiny bits of additional profit from subscribers (yet), come into the market and disrupt their market security.

I'm far from being an expert on this subject, so take the above with a healthy grain of salt. I could easily be dead wrong about some of the above, in which case I'd love for some of you to chime in and correct me.

/r/technology Thread Parent Link - dslreports.com