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Bandwidth Caps May Be Critical Error For Broadband Companies
Technical Writing Geek writes "An Ars Technica article argues that after many years of stagnation, the US broadband landscape is finally 'primed for change'. Companies like Time Warner that decide to cap bandwidth risk being relegated to a 'broadband ghetto. Alternatives to the standard cable modem vs. DSL conundrum will come from technologies like WiMax and (eventually) the 'white space' broadband that might be offered by whoever wins the 700mhz auction. 'All of that is to say that cable and DSL won't always be the only games in town. If wireless solutions are able to deliver on their promises of high speeds with no usage limits, capped cable broadband service like Time Warner has planned is likely to be unattractive, to say the least. Instead of developing plans designed to discourage consumers from feeding at the bandwidth trough, cable companies would be better served in the long run by making investments in new technologies like DOCSIS 3.0 and the kind of infrastructure improvements necessary to meet bandwidth demands.'"
Yeah but in these days of corporatocracy, who wants to actually provide better service to their consumers (since it's the shareholders, not the consumers, who they see as their customers), instead of just jacking up the prices and LOWERING service?
-uso.
What you hear in the ear, preach from the rooftop Matthew 10.27b
it's the lack of competition. Your consumer typically has the choice of either cable internet or DSL, or just one of the above. The FCC change in allowing telecos to lease their lines for more than bulk rates was a big part of this.
Yeah, because we all know that the backbones have unlimited bandwidth...
The world's burning. Moped Jesus spotted on I50. Details at 11.
Don't worry, it'll get "better". My big worry with something like this is that specific services I use will cause me to go over. Netflix watching, TiVo downloading shows, Apple TV (if I had one), etc.
Which means that they'll probably start adding exceptions. Soon your plan will be:
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
What free market? The cable and phone companies have divided the country into their own small kingdoms, where only 1 may exist. If both my DSL and cable provider decide to be jerks and charge $100/mo for dial-up type performance, there's not a whole lot anyone can do, other than go offline. Permanently.
As the article says, wimax may be an alternative...eventually.
Like the RIAA and Oil companies this is the last gasp of a company that can't adapt to the changing market demand with anything that won't screw the customer. Also like the above mentioned you have little choice in the immediate, all the options being talked about are down the road ideas. So, they're going to bend the customer over and get what more money they can before they die a painful death.
Which is more profitable? Innovation or screwing the customer?
Ask not what you can do for your country. Ask what your country did to you
With the choice of high speed providers for most people being limited to 2 or 3 at best, we will see an oligopolistic pricing model much like that in cellular service where all providers passively collude in a price structure that maintains high profits.
Fact is, most users want a fairly modest average bandwidth, with rare bouts of high-bandwidth usage. It's only the few rare addicts and power users that want a big pipe open to their PC all the time. That's why cable has succeeded as well as it has so far -- because the basic bandwidth-sharing paradigm works for most customers, who usually just write e-mail and every two weeks or so download some MP3s from iTunes or watch a video preview of some movie. The fact that jacking the price up for the average-bandwidth power users might drive some of them away (to surely more expensive options) is not going to be a bad business decision for the cable companies, any more than it's a bad business decision for an HMO to drive its sickest patients to other insurers.
The other thing most people want is for their Internet connection to be dirt cheap. Hence the pressure on cable companies from their customers has not been towards higher and higher average capacity, but towards reliability and cheapness. My cable connection costs the same in nominal dollars now, in 2007, as it did the first day I got it, in 1997. That means its real price has fallen steeply. But the bandwidth hasn't budged. If anything, it's worse. That's not because the cable company is stupid, contra this naive article, but because those have been the priorities of my neighbors signing up for the service. The fact that the cable company has made a huge pile of money operating as they have is the surest evidence that they know what they're doing, business-wise.
Will that change in the future? Will people start wanting to stream HD movies over the Internet? Got me. Maybe. But the demand for enormous bandwidth has been predicted to be Right Around The Corner(TM) every year for the last 12 years in my experience. That wouldn't inspire me to invest my retirement funds in any big pipe to every desktop tech.
Costs a lot less to toss up a couple of towers than it does to negotiate rights of way, dig trenches or erect poles, maintain a fleet of trucks and techs to go from residence to residence making connections, et al.
In Xanadu did Kubla Khan
A stately pleasure dome decree
Even going with the horrible misdefinition of "bandwidth" to mean "throughput", that isn't what this article is talking about. All high-speed connections have a throughput limit, and that certainly isn't measured in gigabytes (yet, for almost all people). It is more often in the megabits/second range, or kilobits/second for the unlucky.
This article is talking about a transfer cap, or a limit on the number of bits that can be sent in a month. 15GiB a month doesn't have anything to do with the throughput. For example a 28.8Kbits/second modem sending for a solid month can send over 5 Gibibytes of data.
If I have nothing to hide, don't search me
That would be nice, but the lack of real competition in television and movie phones doesn't make me particularly optimistic. The mobile phone carriers all charge virtually identical prices. Satellite and cable companies nickel and dime for every little thing.
The problem is that consumers just accept this. They'll complain, but they keep right on paying these companies. So if consumers accept this bandwidth cap all providers will start doing it.
With this general trend to charge people for every little thing how can they not do it? I guess I'm just a pessimist.
The power of DOCSIS 3 is not that consumers will be able to utilize all their bandwidth for downloading from the internet at large. Rather, it will be used internally by the cable companies for HD video on demand.
In the DSL arena there is ADSL2+ and VDSL which have lower absolute bandwith but that bandwidth isn't shared with your neighbors as is the case with cable so the end result is a wash aside from the distance issues with DSL.
On the wireless side of things, there is no way any service can compete with the hardwired services on speed. At some point the wireless systems have to connect to the hardwired network and that is the point where the bandwidth will be severely restricted. The telcos will treat these new providers the way they do the current CLECs.
I am becoming gerund, destroyer of verbs.
Caps would be a very poor business decision for all the reasons mentioned in the summary and more.
However metered billing on some sort of sliding scale (the more you use, the less each byte costs because the fixed costs of supporting a customer don't vary by bandwidth consumed) has the potential to be better for both the customers and the ISPs.
When ISPs charge by the byte their business interest becomes aligned with their clients' interests - the more bandwidth the clients use, the more money the ISP makes and thus the more money they can afford to invest in infrastructure which means even greater amounts of even cheaper bandwidth becomes available due to economies of scale, technology improvements, etc.
I know there are plenty of cynics out there (I am one too) who think that the ISPs would just use metered billing as a way to gouge customers rather than improve service and reduce costs - they do tend to be monopolies after all. But I don't see the current situation being sustainable (which is one reason things like network neutrality are so hot right now, with fixed pricing the only way for the ISP to make more money per customer is via tricky back-door schemes that conflict, rather than align with their customers' interests).
When information is power, privacy is freedom.
If the content were available, I'm pretty sure I wouldn't be stopping at 1920x1080 HD video. Monitors can already handle 2560x1600 fairly commonly and all we're waiting for is someone to come up with a way to put multi-angle video in a single steam.
What's been the limiting factor throughout? Bandwidth availability. As soon as it's available (or just becoming available), someone releases their next great idea that just hadn't taken off so far because the files were too slow to download.
Cable companies can release 100mbps lines... They can up to 1gbps, 10gbp, 100gbps... And we'll come up with cool ways to use them.
That's not to imply they shouldn't invest in new technologies and keep moving forward... but "just give people more" isn't a real solution either. That more will never be enough and you'll be back in the same position.
Realizing I'm going to be mocked as the "the intertubes are a series of roads" guy... It does have a lot of parallels to the road construction argument.
To many people, most even, the answer's simple: If there's congestion, build more and bigger roads.
The thing is, all the research demonstrates that people will drive up to a given pain threshold. You reduce the amount of pain they feel... they drive more until they're back up to it. You spend a whole load of money, destroy the environment, and everyone complains just as much about how sucky traffic is.
Of course, refuse to build more roads and you very quickly get voted out of office by angry commuters who "know" the system far better than any researchers with their numbers ever could. On the internets, we call them discussion boards.
I have been on mixed line + per-MB charges since I moved to cellular broadband and my costs have gone _down_ not up. This is compared to fixed line DSL!
In a commercial environment the best way to make sure that you aren't being screwed is that the cost model reflects the services provided. E.g. if you have the services of line+bandwidth then paying something for the line and something for the bandwidth:
* Increases the incentive for the line to always be working and fast.
* Decreases the pressure to keep bit torrent queued up 25 hours a day to 'get your money's worth'.
Any sort of unlimited bandwidth plan encourages a sort of game where supplier and customer repeatedly try and screw each other over by abusing the wording of the T&Cs. So, if you manage to arrange a contract where cost and incentive are equally shared it's much harder for everyone to end up unhappy.
After all price = cost + markup. If the markup isn't acceptable then expect something to give - businesses that run at a loss can't survive for long.
Beep beep.
The pluses:
- unmetered bandwidth
- I got my own sideband slice, so my speeds were constant (1Mbps up and down)
- $55.00 USD per month, constant. No contract extensions were tacked on when I later added a static IP
- lag was present enough to hamper game play in an FPS (my antenna was 33 miles away from the tower), but still fairly usable
- when cable finally did arrive, everyone else whined about speeds bogging down at certain times of the day, while I never suffered any of that
- Sprint stopped taking on new customers when things got full (IOW, they couldn't quite 'oversell the modems' as easily as a typical ISP could)
The minuses:Overall though, I'd say I was very satisfied. I experienced exactly one outage the whole time, IIRC... and it was back up in less than an hour. I'm in Oregon now, so it would be kind of impractical to use it here (it tends to rain a lot), but if they can overcome the limitations that I saw as late as 2005, then more power to 'em. It was one of the most pleasant experiences overall that I ever had with any ISP. Plus, I had the exquisite pleasure of telling a Qwest sales droid to fuck off when they finally did get DSL into the neighborhood three years later (really... 256Kpbs DSL, when I already had 1Mbps both ways? Pfft! whatever...)
Quo usque tandem abutere, Nimbus, patientia nostra?
You know, never fails to amaze me how people are not looking at the larger picture of "services" offered by any provider, but especially by the cable companies. FTR, I used to work in business broadband sales for a major cable player, so I've seen the industry from just after the days where cable modems got installed until the dot-com boom from the inside.
The cable companies, as we speak, are caught in a precarious situation. Several factors came into play at the same time, which has limited their ability to make huge improvements, but, if they're lucky, they might come out on top.
So history: when cable modems first arrived on the scene, in the early-to-mid 90's, the technology was largely unproven and had tremendous issues, both technically and from a service delivery perspective. Much like the early days of DSL, the cable companies were essentially forced to re-wire infrastructure that had been in place for over a decade, sometimes up to 2 decades. Because of the technical issues, many cable executives didn't see the cost-benefit ratio of rewiring tens of thousands of miles of cities to be able to provide the service.
Plus, if you know anything about cost, doing so was a multi-million dollar effort, cumulatively probably costing in the billions.
However, with the advent of the dot-com boom and other highly profitable interactive services, the cable company PHB's finally got the picture and started rewiring and running fiber for the new cable plants.
Unfortunately, this was between 95-98, just before the internet boom really got underway, and well before DSL put any pressure on them.
As such, they did a reasonable job of getting the major metropolitan areas wired for a more modern infrastructure.
However, they failed in one major respect: they didn't have a crystal ball, and most, if not all, the cable companies put in the minimum infrastructure to support digital services. They didn't, however, put in overcapacity.
Now, if you swing forward 4-7 years, its pretty obvious that the cost-differential of putting in FTTP (or at least overcapacity of fiber to the neighborhood) would have been the smart thing to do. But at the time, wth DSL being crap, and no other real competition, they missed the boat. This wasn't maliciouos. They just did what they thought would be adequate.
Now, look at cable services today. On most cable infrastructure, the highest percentage of bandwidth (out of the 1000mhz available on the plant) goes to analog TV. Those 30-50 channels take up nearly have the space, each analog channel taking 6mhz of bandwidth.
This log-gain, low-profit bandwidth hog is the biggest impediment to modern services as they reside on the existing cable facilities.
And now there's another problem in the works: how to handle changes in Digital Broadcasting, DOCSIS 3, and PacketCable services, especially with HD programming getting more and more relevant.
While DOCSIS 3 has been out for over a year now, from the insiders I know its still a bit spotty on the internal side, and since many of the operators use Cisco (who fought DOCSIS 3 tooth and nail to get their own standard), they'd love to do it but are still unsure of quality. Not only that, but at least one smaller cable operator where I know the CIO is truly looking at how to deliver everything over PacketCable (TV, Phone, Data, etc.) rather than just make the leap to DOCSIS 3.
These aren't inconsequential issues, as the decisions made now will have some serious impact on the structure of Cable services for a long time.
And finally, when you add in the cost of maintaining hundreds of thousands of miles of fiber and copper plant, along with the huge increases in programming costs to the cable companies, along with the not-insiginificant support and CPE equipment costs of moving to Digital services, DOCSIS 3, or other advanced services, its not much wonder why the cable companies are moving a bit slowly. An error in judgement now could be fatally costly over the lon
See, you may be paying $50/month for an "unlimited" connection at 6 megabits/second. But guess what? 6 megabits of bandwidth costs your ISP *at least* twice that. If they aren't in a major metropolitan area, it can cost *50* times that.
Bandwidth is expensive. That's why ALL bandwidth is "shared" and "oversubscribed". There simply isn't any way to provide everyone with gobs and gobs of dedicated bandwidth. That's not how it works.
So, don't blame the cable or DSL providers. Blame the huge telcos that keep the price of bandwidth artificially high.
The day I pay per byte is the day I install AdBlock. There's no contest. There's no way around it. If I pay for the ads -- or even if I pay for the DNS requests to resolve the ads -- I don't request the ads.
They can't whitelist every ad server in Creation, and if I pay for even one ad, that's one ad too many. Not happening. I'll even block Google's scripts. And I'll do the same for every member of my family.
Yahoo! Pipes are awesome. How awesome? http://pipes.yahoo.com/jesdynf/slashdot
Most people in cities have a choice of at least 6 ways to connect to the Internet:
* dialup, slow
* DSL, relatively cheap
* cable modem, a bit more than DSL but a better bargain
* wireless through cell phone, expensive for what you get
* satellite, expensive for what you get and long latencies, may require phone uplink
* T1 and other business-grade, dedicated-bandwidth solutions, very expensive compared to DSL or Cable
Now, if you want faster than dialup, don't need mobility, and don't need dedicated bandwidth, DSL and Cable happen to be the cheapest options today.
The question is not, "Will WiMax, IP-over-power-line, blimp-wireless, and other technologies come online soon," it is "Will they be competitive?"
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
"Letting the free market decide" won't leave me with a lot of options in the near term. Where I live, the options for broadband service are basically Time Warner (cable) and AT&T (DSL). I currently use Time Warner, and if they start capping bandwidth, voting with my dollar means switching to AT&T... which is like voting "yes" to content filtering.
So, currently, I have a choice between supporting one of two evils, or having no broadband service whatsoever. Awesome.
I am an American who has been living in Australia the last few years. All Cable/DSL services here have usage caps and you pay for faster speeds / more downloads. When I first moved here the idea of the usage caps pissed me off but I have warmed to them. I pay ~US$60/month for 8 megabit down and 384 kbit up DSL with a static IP. I get 24 gigabytes per month and any downloads I do from 1am to 8am are counted at half so it is really more like 30 to me most months. They have a usage meter website that is updated about once per hour and is quite accurate telling me how I am using. If I go over I pay $4/gigabyte.
This is great for a number of reasons. Firstly, everybody has a motivation to do their non-essential torrents etc overnight which improves gaming/voip performance during the day and peak evening hours. Secondly, I have an agreement with my provider where I get such and such amount of data at such and such speed and we are both on the same page - I will never get an email saying to use less and hassling me like I received from Adelphia (now Time Warner I believe) before I left. It doesn't serve as a huge deterrent but it is enough to ensure that you don't waste a precious resource (bandwidth) as readily. If you bought electricity, water, or natural gas on an "unlimited" basis don't you think that would lead to waste as well?
I think that the current "unlimited" system does a disservice to many on a shared-bandwidth medium like cable as well. A few teenagers on a street who saturate their connections 24/7 downloading things like the entirely of the Simpsons etc they may never actually watch make the rest of the neighboorhood slow for things like telecommuting and voip that are much more essential and time-critical. There is no reason/incentive for them to stop or to try to do their larger torrents overnight etc. It is also the shadyness of what the limit really is on the "unlimited" service questions. All in all we can argue about where the pricing and the cap are set but I think the idea is sound and reasonable. They will always let you do what you want but you may have to pay more for a service where you can download 100GB/month than granny pays to do 1-2% of that - as you should.