Enough Bandwidth? Drawing a Net on The Net

Comcast’s decision to cap data usage for consumer users at 250Gb has caused a bit of a stir. It might be a return to rational economics, but it may once again open the opportunity for service providers to start to segment between business and consumer users.

In the early days of broadband, providers kept business and consumer users very separate. Different service level agreements and speeds meant very different price points. However, as the industry matured, the consumer product started to bleed into the business space.

These days it is not atypical to find remote users subscribing to consumer-level broadband service, then reclaimed through work expenses. In some cases, businesses are subscribing to consumer services directly. It isn’t something the service providers want to happen, but it has become very much the way it is.

The bandwidths are continuing to rise, and prices continuing to fall, so the operators want to draw a line somewhere. It is a particularly painful exercise in game theory, where you don’t want to be the first player to make a stand. A few years back, broadband providers in the UK and elsewhere put in download limits. There was a swift backlash from users, and the caps quietly drifted away.

These days most providers around the world have some sort of ‘fair usage’ capacity cap, which aims to catch ‘abusers’ - those who run machines 24×7 feeding off of bit torrents to fetch and send DVD content. The limits are unlikely to bother the average user, for now. Whilst some people might have kittens about the limit, like those at GigaOm, the fact is a 250Gig/Month cap sounds quite reasonable. There in lies the danger.

Doing the maths, 250Gig a month is just under 10Gig a day (8.3Gig on a 30 day month, if you want to be fussy about it). By most standards that’s quite a lot. A few DVDs of data a day. Not something that should be a problem for a home worker, even one downloading PowerPoints by the dozen and on the VoIP phone all day. VoIP watch (”wheres the meter“), like many others, sees the cap as a fair way for the cable operators to try and get fair compensation for content providers looking to stream movies across the network.

However, it isn’t just content providers using large amounts of bandwidth. If we start thinking about HD Video (for delivering training of course) and a heavy chunk of telepresence thrown in, then add that together with PowerPoint files with print quality images and embedded video, the limit starts to look less generous. Think back 3 or 4 years. How big were the file attachments on most of your e-mail messages? How big are they now? Project forward 3 or 4 years, together with (horror) even higher usage of e-mail, that now includes video message attachments. Are you starting to get a little uneasy?

If you are in the media industry, or have remote workers who do media processing at home (think film editing, or heavy duty photo work), you may hit this limit pretty quickly. The drivers are obvious: HD video cameras are becoming more affordable (and common), the pixel count of digital cameras is heading into orbit (even phone handsets are at several megapixels now), and hard drives are getting larger by the second too (and still needing off-site backup). Cue larger files to move around.

Putting a ‘reasonable’ looking download limit in place now is a smart move for the broadband operators. From a game theory perspective, if the limit appears high enough that they don’t cause groans from the average user, it makes it easy for other operators to follow suit. Once they do, the net is set. As usage grows, the opportunity opens up for operators to add higher-priced services with bigger caps, and finally move away from the flat-rate model that causes them so much financial pain.

The battle here isn’t about bandwidth, it is about download capacity. That is something quite different, and a point that really irks me in much of the commentary. There is another vector here: The limit is on capacity. What are cable operators doing with bandwidth? Well, they are sending it to the moon and back of course. They are shouting from the roof tops about giving 100Mbps to the home, or even higher. What does that do? It speeds up how quickly you get to that capacity cap.

Definitely one to watch - the net is drawing in on high bandwidth users, or rather the broadband providers are drawing in on The Net.