«Unlimited» is fraud

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.