Years ago, when I was in college, I worked in the dorm's food service hall for spending money during the school year. You could pay for a food service plan in one of two ways, either pre-pay at the beginning of the year and have your plan recorded on a magnetic card, or pay (a higher price) as you go with cash. Most people of course pre-paid and got a card. The funny thing is, people would pay for more food than they actually used. Many people would buy the three meals a day plan, but skip lunch on certain days when they couldn't make it to the cafeteria, either because it was inconvenient on Wednesdays or they just wanted the option of having lunch even though they usually wouldn't.

Of course this was widely understood by everyone involved. An on-campus charity decided that all this paid-for food was just sitting idle, and could be put to better use. So one day they asked everyone to grab a bag lunch (something you can do in the morning if you know you'll be busy during normal lunch hours) and donate it to a homeless shelter instead of eating it themselves. The response was overwhelming, both people who were planning to skip lunch that day anyway and people who were planning to have lunch but decided they could skip one day for charity stopped by for bag lunches to donate — an easy, feel-good way to make a small difference.

The cafeteria quickly ran out of food. People who pre-paid for lunch they intended to eat went hungry that afternoon. The food service managers were furious at the charity.

Wait a minute, you say to yourself, if food service pre-sold 3,000 students lunch programs, they should have 3,000 lunches on hand! This was clearly irresponsible on the part of the cafeteria! What if everyone just legitimately wanted to have lunch that day?

But it's not the same thing at all. They know, through past experience and careful historical data tracking, how many people typically actually use their meal plans on any given day and keep that much food on hand, with a comfortable buffer for unexpected surges and so forth. To keep 3,000 lunches on-hand when only 2,000 people who paid for it are actually going to use it would be wasteful to a degree that would make any tree-hugging hippie vomit on his Birkenstocks. Food doesn't stay fresh forever. That's good food that will be eventually thrown away.

So what's happening with all those pre-sold plans? The cafeteria just keeps the money from those extra 1,000 people, right? Lining their gilded coffers with filthy lucre every time someone fails to use their rightfully purchased meal plan? Ridiculous. If they sell 3,000 plans and know that they're only going to need to deliver on 2,000 of them, they're going to reduce the cost of everyone's meal plans by 1/3. Think of it like an insurance plan (an imperfect analogy, just run with it). Some people who pay for the insurance will never use it, other people will. The distribution of costs brings the price down for everyone. If everyone suddenly gets cancer simultaneously, the insurance company will be SOL, but by extrapolating trends from historical data we know that simply doesn't happen.

How this applies to stealing wifi

This is the same situation ISPs are in when people steal wifi from their neighbors or nearby businesses. Following a typical plan, that ISP will have sold a person a month's use of their service, allowing them unlimited, high-speed access to the internet… knowing full well that their customers will not actually be using all their bandwidth all the time. No ISP on Earth would be capable of supporting every one of their customers continuously streaming YouTube videos to their computers, even though technically there is nothing in your contract to prevent you from doing so. They know that this won't happen, because historically, while bandwidth usage does indeed tend to trend upwards, it's at a predictable and manageable pace that they can plan their hardware upgrades and cable runs around. And they price their plans accordingly. An ISP that actually plans for all their customers using all their bandwidth all the time would need so much capacity that they would have to charge a fortune; and nobody would buy it because there are cheaper plans out there from companies with a more sane outlook on actual usage.

For a more direct analogy than the bag lunch example above, the cafeteria also allows their customers to eat all they want, buffet-style, returning for as many helpings as they can shove down their throats. They know that some people will eat more than others, and they know how this will balance out at the end of the day. Technically, they have promised each customer unlimited food. But this doesn't mean that any customer has the right to bring a friend in with them to eat off his plate, or carry an extra helping out the door. The plan was sold to you, and you aren't allowed to give the food away. If everyone who bought a plan one day brought a friend in with them, they'd run out of food. If this happened regularly they'd have to double their prices.

False analogies

Because people don't understand that an ISP's hardware can only supply a limited amount of bandwidth, and that this limit is indeed less than they have technically promised, and that this business model is perfectly sound, they have built an enormous library of false analogies to justify their behavior. Equally as ridiculous, of course, are the false analogies used to vilify it. But not a single one of these analogies addresses the issue that some ISPs enforce a daily or monthly bandwidth cap on internet usage. In that case, no matter how "responsible" you can convince yourself you are with your bandwidth leeching, you're ultimately pushing your neighbor's connection artificially closer to that limit.

"It's like reading a book with light coming from another person's window."
"It's like warming your hands with waste heat from a bakery."
"It isn't theft if it's use-it-or-lose-it and he's not using it at the moment."

The problem with these analogies is that it relies on the idea that it's okay to take something that a person is just wasting anyway. They're not using the light going out their window, and they're not using the heat radiating out into the street. It's a by-product of their normal activities and it isn't costing them anything. While, yes, they are in fact broadcasting an unused wifi signal, all that's being wasted there is electricity, not bandwidth. The bandwidth is not used until someone connects to it. At this point, rather than using heat that is naturally leaking out into the street, you have actually drilled a hole into the wall. If they were baking bread at that moment, you've caused a drop in the oven temperature and either ruined it or made it more expensive to bake. Likewise if your neighbor was about to make that critical game-winning headshot in Team Fortress 2, you've just lagged his connection.

Okay, but say they were closed for the day and left their ovens on overnight? They're not baking bread, so I can drill into their wall and take their heat. Again, no, because the natural gas company knows how much gas they need to provide to the homes and businesses in the area, and you're taking some of that capacity away. Even if the bakery was paying a fixed amount per month rather than a cost per cubic foot of gas, you've increased demand without paying for it, like a person who invites his friend in to the all-you-can-eat buffet.

"It's like watching someone else's fireworks show."
"It's like tuning your television to a channel with the old rabbit ears."
"It isn't theft if the other person still has it."

The problem with these analogies is that it presupposes unlimited bandwidth. While the ISP technically promises the end user unlimited bandwidth, it knows it's not going to have to make good on this claim, they know how much capacity they need to provide at peak use times to keep up with demand and they're not going to provide capacity for what they don't need, simply to keep costs reasonable for the customer. A radio station, on the other hand, is provided unlimited bandwidth as it broadcasts 10,000 Watts of radio energy across a city. Whether one person or a million people tune their radios to this station, they're still pumping that same 10,000 Watts of power because radios work in a fundamentally different way than the internet does. They can do this because you don't upload information to the radio station, and you can't pick and choose what time you want to listen to the 6:00 news. It's on at 6:00 and you can't go grab it later.

This justification can be applied, in a fashion, to music piracy, but not stealing bandwidth.

"It's like someone putting up a 'free water' sign on the spigot outside his house."

This false analogy relies on the fact that a wireless router is constantly broadcasting a message asking if anyone nearby wants to connect. The problem is, most people have no idea it's doing this, and in any case it was the router manufacturer who put that sign out, not the customer who purchased it. This is only an analogous situation if spigot manufacturers put a sign on every spigot that says "free water" — in Sanskrit. The average user would have no idea what it says, and people with specialized knowledge could come by and take advantage of that. To take the analogy further, let's say you wanted to fill up your 5-gallon bucket with cold water while the person was taking a shower. Leeching off some of his cold-water bandwidth, you've suddenly scalded him.

"It's not okay to steal a car just because someone's left his door unlocked."

In the interest of fairness, this is a false analogy from the other side of the argument. Many people have insecure wifi networks because they simply don't know how to secure them, or don't understand why they should. The problem, obviously, with this analogy is that if you've stolen a car, the car is gone and the person can't use it anymore from that point on, which is fundamentally different from stealing bandwidth. This isn't going to convince anyone not to do it.

Risks to yourself if you decide to share

Many people take the position that they're not using their internet connection all the time and that their neighbors are welcome to it. Again, this is like inviting your friend in to the all-you-can-eat buffet to eat off your plate. No problem for you, right? You still get to eat your fill.

Even if we ignore the fact that the giant faceless megacorporation that sells you your bandwidth is the one getting screwed here, you are in fact raising the cost of your internet service by doing this. The company can't make bandwidth out of nothing any more than a buffet can make food magically appear. They have to pay for hardware upgrades, cable runs, computers to serve the data, and staff to run the equipment. Everyone using this service should be paying their fair share or as the costs get redistributed it raises the price for all their customers, even assuming that the buffet doesn't run out of food.

Then there's the issue of giving people anonymous access to your legally purchased and very traceable IP address. Even if you've got a nice, secure connection yourself so nobody can grab your passwords and personal data, any action they take on your wifi signal is going to be traced back to your house, whether it's downloading child pornography or trolling a message board. In the former case, you could either be found responsible or at least get tied up in a legal battle playing legal fees proving it wasn't you, wasting your time and money. In the latter, your IP address could get blocked, which is a problem if you also frequent that message board. And all the while the leech is safely anonymous.

Oh yeah, and you also may be in violation of your ISP's service agreement if you're doing this on purpose.

You do know it's illegal to steal fractions of a penny from everyone's bank account, right?

So your buddy has saved himself $30 a month by charging everyone else on the network a few more cents by leaching off of your connection. Whoopty-doo, he hasn't hurt anybody in a substantial way, probably not even in a way that they'd even notice. Well a single leech doesn't take much blood hanging off of your leg either. Cover your body with leeches and you've got problems. It's fundamentally unfair to society at large to get away with something just because you're the only one doing it. No system can support a large number of people cheating it. That's why we're taught in kindergarten to play nice and pull our weight. If you just cooperate in fairly designed systems, things run smoothly.

Okay, but it's still the ISP's fault for making promises they can't deliver on

This is matter of convenience for both the ISP and the customer. The customer has no intention of using all his bandwidth all the time, and the ISP knows this, so they only provide what is actually needed. But they still let everyone have the theoretical ability to download as much as they want because, even though on a typical day they might download 20MB of information checking Facebook, they might download a software update for their operating system one day, or discover streaming internet radio stations, or watch a move on-demand from NetFlix. But they won't do these things every day — putting unnecessary limits on usage is a massive inconvenience for the typical user who has occasional usage spikes. As a user who just moved from a bandwidth-capped ISP to an uncapped one, I can tell you how difficult it was having to plan out my activity times and estimate my daily usage so I could download those occasional large files.

So long as everyone pays their fair share and cooperates, everyone stays happy. But if leeching bandwidth becomes widely accepted, prices will go up and ISPs will have to start imposing inconvenient limits on their service to keep things under control. Nobody wants to see this happen, least of all the very people who are leeching bandwidth in the first place. The only reason it's causing no measureable problem right now is because only a small number of people are doing it.

Bandwidth is not unlimited. You are not taking resources that are just going to vanish anyway if nobody uses them.

Two Sheds has the following to add:
Back before they were bought by Best Buy, the ISP Speakeasy had a policy that users were free to share their wireless networks, and could even resell their bandwidth to their neighbors, at least under certain conditions. Having this as a policy strikes me as entirely reasonable. There are ways in which sharing connections reduces costs: it reduces the number of phone lines, modems, and routers that have to be manufactured and installed, and reduces the maintainance costs for all of these things, which are substantial. There's room in the market for a more expensive service that explicitly permits sharing.

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