Are data restrictions actually a sham?

The argument by Internet service providers (ISPs) that too many people are using too much bandwidth seems plausible enough. After all, streaming high-definition movies, posting high-megapixel photos and downloading video games are making ever-larger demands on networks. But does that mean ISPs are really running out of bandwidth? Is capping individual usage the only way they can cope? No, says tech pundit Robert X. Cringely (aka Mark Stephens).

He argues that data caps are a ploy by ISPs to position themselves to increase their profits as data consumption explodes in the coming years. The ISPs' motivation aside, Cringely counters the their claims on the basics of bandwidth economics. Bandwidth usage is certainly increasing, but at the same time "backbone costs [basically, what ISPs pay to hook themselves into the Internet] are going down and have been doing so for many years," he writes. In Tokyo, he says, the ISP Softbank BB charges its customers about half of what American ISPs charge, even while offering speeds four times faster. "Yet Softbank BB is profitable. Their backbone costs are inconsequential and to argue otherwise is probably a lie."