«Unlimited» is fraud

South Schodack , NY
New York US

Part one in a series of two or more of topics relevant to the Network Neutrality debate

Imagine a pizzeria. Let’s call it Monochromatic Pizza because that’s a terrible name for a pizza joint1 and with luck I won’t anger the proprietors of any actual pizza places. Let’s say Monochromatic Pizza makes pretty good pizza. Maybe it isn’t the best in town, but you’ve been there before and you like their pizza.

As you walk past Monochromatic Pizza one nice day, you see a banner in the window. It reads: «Unlimited Pizza! $50.00 per month».

It sounds too good to be true. For $50.00 each month, you could have a large pizza every week and it would come to $12.50 each. It sounds too good to be true but you go inside to ask if it’s really unlimited pizza that they are offering. The nice man behind the counter assures you: you can come in as often as you like and get a pizza. You hand over fifty dollars and sit down for your first pizza.

A few days later you’re talking with a friend and realize that it’s past dinner time. You’re both hungry. You go on down to Monochromatic Pizza, say hello to the proprietor and have a lovely meal, paying out of pocket only for the soft drinks and the salads you order in addition to the pizza.

A few more days go by and you drop in to Monochromatic Pizza again. This time when you ask for a whole pizza, the nice man behind the counter comes back and gives you a single slice. «Why are you only giving me a slice?» you ask, «I asked for a whole pizza. Isn’t it unlimited?»

«Oh, it is unlimited!» he says. «But after the first two pizzas in one seven day period we only give you one slice per hour. You’re welcome to come back for your next slice in…» He consults his wristwatch. «…fifty-nine minutes. Enjoy!»

After further questioning, he reveals that some people had taken advantage of the offer and decided that for fifty dollars per month they never had to shop for groceries ever again. They would bring all their friends and eat pizza for breakfast, lunch, and dinner. It was draining the pizzeria’s resources, and so he had to implement a policy to throttle the rate at which he would give out pizza after a certain threshold, to keep the people who wanted to abuse the offer from ruining it for everyone else.

Why it’s fraud

There’s no reason to be sympathetic to the plight of Monochromatic Pizza. The advertised offer was more than the business could afford to deliver. The corner the proprietor is in he painted himself into. He was counting on the customers who bought the plan not actually utilizing the promised lack of limits. Why this is unrealistic is a good topic for another post, but the bottom line is that it is fraudulent to take money for something that one knows cannot be delivered. Just to be clear about this, permitting a maximum of one slice every hour is a limit.

What does this have to do with Net Neutrality?

I said above that this is relevant to the Network Neutrality debate. I did not advertise falsely. Here it is:

This strategy has been used by Internet Service Providers for almost two decades. First2 was when America Online switched from offering hundreds of hours per month to limitless access to their dial-up service, which included Internet access3. This may have gone unnoticed, because this was dial-up service. Very few people had dedicated data lines in those days, and even those who had a second line for their modem often used it for multiple online services, BBSs, or for sending and receiving faxes. Being connected to America Online all day every day would mean tying up the phone line, which by itself probably cost twenty or thirty dollars a month. Even if America Online wasn’t imposing additional costs on keeping a constant connection to the Internet, there were built-in costs to the consumer that limited that behavior.

By the late 1990s, when «always-on» Internet connections became available to consumers in urban areas, ISPs took that same marketing ball and ran with it, advertising their plans as unlimited. Not only could customers leave their computers connected to the Internet all day and all night, they were expected to. We just turned our routers on and forgot about hearing modem dial tones ever again.

Unlimited?

Of course there were limits built in. There were bandwidth limits, defined by how much bandwidth you were paying to get. As is the case now, paying more would get you «faster» Internet connections4. One ought to be able to start downloading things and just keep on downloading all day, right?

Not exactly. People who tried this discovered soon that they did not get very far before their connections were throttled to much lower bandwidth limits or even shut off entirely. ISPs justified these policies by describing these customers as rotten apples trying to ruin it for everyone by constantly using their Internet connections. They characterized these users as generally criminal or unsavory (distribution of copyrighted material, porn, etc) and claimed that the limits imposed were entirely reasonable.

The limits may have been entirely reasonable for the prices at which the services were sold. But they were still limits. They should not have been able to continue to claim that the service was unlimited, but they did.

Calling something unlimited when it isn’t is a lie.

This became news when cellular companies started doing the same thing with so-called unlimited data accounts. Several years ago, those companies stopped doing so for a while, allowing the «unlimited» plans only to those who already had them (though throttling and usage caps were still in place). After a couple of years, those companies started using that word again, and most do it still today.

The truth is that the only unlimited Internet access is metered access. If you pay for what you use, you can use all you like. My cellular phone provider, Ting, won’t ever throttle my bandwidth. I may get a very large bill at the end of the month, but I won’t be cut off. That is unlimited access.

Calling something unlimited when it isn’t is a lie. Lying about what you’re selling is fraud.

Weren’t you going to talk about Net Neutrality?

The argument ISPs have used to support the need to eliminate network neutrality, is that it will force them to raise rates or start metering usage. The good customers want to check their email, but they can’t because their bad neighbors are using up all the bandwidth for the whole neighborhood downloading streaming video. Probably porn. And they are paying the same rates as the nice people getting emails from Mom. Why should nice people pay for their neighbor’s porn?5

The answer is simple: because the neighbor was offered the same thing you were: unlimited access. It’s not the neighbor’s fault that Internet Service Providers can’t deliver what they promised. Is it true that they can’t deliver what they promised? Yes, of course. But that doesn’t mean that the people who bought it are wrong to use it. It means it was wrong to promise it. They may be between a rock and a hard place, but they snuggled in to that hard place and pulled that rock up over themselves.

Does this cover all aspects of the network neutrality debate? Of course not. I only promised relevance. No doubt someone (perhaps you?) will make some entirely different argument about network neutrality. But really why would you want to? This is just one little piece of what’s going on. I hope it’s been enlightening.

Calling something unlimited when it isn’t is a lie. Lying about what you’re selling is fraud. Markets without protections against fraud are not free. Changing rules to protect companies from the consequences of their own fraud is government action to pick winners in the marketplace, and that’s definitely not the way to have a free market.


  1. Wow. Here is a recipe for «Monochromatic Pizza»↩︎

  2. At least the first really famous example. ↩︎

  3. Such as it was. ↩︎

  4. Higher bandwidth does mean that your downloads happen in less time. But those bits don’t actually arrive from the servers faster, you just get more of them at a time. ↩︎

  5. Yes, I’ve seen this exact argument many times. Sometimes they don’t mention porn, but the argument is the same. ↩︎

Comments

Steve,

My provider (Comcast) has very clear descriptions of their plans. It is all laid out in black and white. No secrets. I suspect most other ISPs have the same info readily available. You probably checked the box “I have read and understood….” when you signed up. It seems inappropriate to complain about a limit to which you agreed, regardless of its marketing name. If marketing had to be 100% technically proven, grammatically accurate, and pedantically honest, we would not have TV, radio, newspapers, or internet because there would be no advertisers to pay for them.

Unlimited bandwidth has never meant “no speed limit.” Every ISP in the world states that their nominal speeds are not guaranteed.

Even so, Comcast is testing a 1TB/month cap. “Unlimited” costs an additional $50/month in the test markets. It is hard to imagine a home user exceeding 1TB/month without violating other portions of the user agreement, such as sharing the service with all your neighbors or running a data server. I wouldn’t be concerned if this cap were here.

Dad

P.S. 1TB is about 525 hours of streaming HD from Netflix.