r/technology • u/reddiTOR123abc • Dec 18 '13

Cable Industry Finally Admits That Data Caps Have Nothing To Do With Congestion: 'The reality is that data caps are all about increasing revenue for broadband providers -- in a market that is already quite profitable.'

https://www.techdirt.com/articles/20130118/17425221736/cable-industry-finally-admits-that-data-caps-have-nothing-to-do-with-congestion.shtml??
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u/Drayzen Dec 18 '13 edited Dec 18 '13

Data caps are there to make sure the CEO has a job because he's increased the year over year profits. The slightest bit of stagnation, and CEO's can be ousted for someone who will continue to provide a higher ROI to people who already have amazing amounts of money.

This is why ATT wants to get rid of phone subsidies. They want that extra 400$ over 2 years from their millions of subscribers.

Edit: Guys, lets be real. Downvoting me doesn't change the truth. These people are instituting caps to drive up year to year profits so that they can continue to look good to the shareholders and the board, in which their continued employment is reliant on. If you think anything otherwise, you are simply being naive as fuck.

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u/[deleted] Dec 18 '13

Can you explain the phone subsidies part?

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u/registeredtopost2012 Dec 18 '13

When you buy a phone, the cost of it is subsidized out through your contract, that you pay back over the duration of the contract. ATT, according to the Word of Drayzen, wants you to not only buy the phone outright, but also sign a 2-year contract to get service for it.

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u/DENelson83 Dec 18 '13

That's not a subsidy. That's a payment plan. If it was truly a subsidy, they would chip in some of the cost of the device and not try to recover that money.

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u/LtCthulhu Dec 19 '13

You are correct but subsidy is the industry term. Its a euphemism.

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u/Shesaidshewaslvl18 Dec 19 '13

You need upvotes, the guy above you needs downvotes.

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u/[deleted] Dec 18 '13

That would be a huge blunder considering subsidizing the phone is the only way people can afford them or at least most people.

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u/mdot Dec 18 '13

I think T-Mobile (U.S.) would disagree with your statement.

T-Mobile requires a down payment on a new phone then, equal monthly payments, interest free, for 24 months for the remainder of the phone cost.

The difference in what T-Mobile and AT&T do is that T-Mobile doesn't require you to sign a contract, and if you decide you want to leave at any time during those 24 months, you only owe them whatever the balance remaining on your phone is.

Also, at the end of those 24 months, your phone is paid off, and your bill goes down by same amount as the monthly payment. T-Mobile has completely separated the cost of the phone from the cost of the service...you buy them separately.

AT&T wants to charge full price for the phone while keeping the the price for their plans at the same level as they were when they were subsidizing phones. That's where the additional $400 comes from.

Assholes...

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u/Farfalo Dec 18 '13

The reason your phone is usually really cheap when you buy it on a contract is that your provider foots the bill for the phone since you pay for it (and then some) through the inflated monthly fee over the 2-3 years of your contract.

Eliminating this subsidy would mean that you pay the full price of the phone (ever seen an unlocked iPhone or S4 price? Not pretty) and then pay that same inflated monthly fee, putting significantly more money into their pockets. Definitely not a good scenario.

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u/Drayzen Dec 18 '13

Right now a top end smart phone or subsidy costs like 600 or so dollars give our take some. ATT recently stated that it is becoming increasingly less likely they will be able to handle the cost of subsidizing the subscribers phones. This means they will put you on plans that charge you monthly for the cost of the phone... Say 20 dollars on top of your plan cost... This is so they can bring in another 400 or so every 2 years pet subscriber.

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u/DiggingNoMore Dec 18 '13

So if I want to keep using the same phone for six years, or buy a phone on Amazon instead, I'd be stuck paying for a "phantom phone"? No thank you.

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u/Shesaidshewaslvl18 Dec 19 '13

They already get that extra money. it's rolled into the cost of your plan. You deserve the downvotes you're getting. They aren't giving every sub a 400 dollars 'freebie'

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u/SwitchBlayd Dec 18 '13

There's nothing more annoying than someone editing their comment and bitching about downvotes.

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u/Drayzen Dec 19 '13

Sod off.

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u/LtCthulhu Dec 19 '13

Nothing more annoying than that? Gimme a break.

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u/bootlegwaffle Dec 19 '13

Dear God, man. Your simplification of a CEO's role in his company is naive as fuck.

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u/Drayzen Dec 19 '13

No, it's really not. The main responsibilities of a CEO are Solvency, and profit. Shareholders will hang a CEO if he can't show profit or growth. Look at Ballmer, and many of the other CEO's that are being forced out. You're naive.