The broadband-caps disaster

The United States has now elected a President who has pledged universal broadband. On almost the same day, AT&T announced it would be following some of its fellow network operators into trialing metered broadband.

Broadband caps have been much more common in Europe, but the trend there is away from caps, not towards them. Caps stifle innovation, discouraging the development of richer Internet experiences and the convergence of voice and video with data.

AT&T’s proposed caps start at 20 GB of data transfer per month. That’s equivalent to about 64 kbps of sustained data — barely the kind of speed a modem can manage. Or, put another way, that’s five 4 GB, DVD-quality movie downloads. And those caps are generous compared to Time Warner’s — AT&T proposes 20-150 GB caps, vs. TW’s 5-40 GB. (Comcast is much more reasonable, with its 250 GB cap.)

The US already has pathetic broadband speeds compared to much of the rest of the developed world. There are lots of good reasons for that, of course, like our broader population spread, but we don’t want to be taking steps backwards, and caps are certainly that. (And that’s not even getting into the important question of what “broadband” really constitutes now, and what, in a universal deployment, should be the minimum speed necessary to justify the infrastructure investment against future sustainable usefulness.)

Yes, network operators need to make money. Yes, someone has to pay for the bandwidth. Yes, customers with exceptionally high bandwidth usage should expect to pay for that usage. But the kind of caps that are being discussed are simply unreasonable, especially for a world that is leaning more and more heavily towards video.

A few months ago, comScore reported video metrics showing 74% of the US Internet audience watched video, consuming an average of 228 minutes of video. 35% of that was YouTube, so let’s call that 320 kbps. It looks like the remainder is mostly higher-quality. Hulu makes a good reference — 480 kbps – 700 kbps, with the highest quality topping 1 Mbps. For purposes of calculation, let’s call it 700 kbps. Add it all up and you’re looking at about 1 GB of content delivered to the average video-watcher.

Average page weights are on the rise; Keynote, an Internet performance measurement company, recently cited 750k in a study of media sites. I’d probably cite the average page as more in the 250-450k range, but I don’t dispute that heavier pages are where things are going (compare a January 2008 study). At that kind of weight, you can view around 1500 pages in 1 GB of transfer — i.e., about 50 pages per day.

A digital camera shot is going to be in the vicinity of 1.5 MB, but a photo on Flickr is typically in the 500k range, so you can comfortably view a photo gallery of five dozen shots every day in your 1 GB.

Email sizes are increasing. Assuming you get attachments, you’re probably looking at around 75k per email, as an average. 1 GB will let you get around 450 emails per day, but if you’re downloading your spam, at the 95% mark, that gets you about 20 legit messages per day.

If you’re a Vonage customer or the like, you’re looking at around 96 kbps, or around 45 minutes of VoIP talk time per day, in 1 GB of usage.

Now add your anti-virus updates, and your Windows and other app software updates. Add your online gaming (don’t forget your voice chat with that), your instant messaging, and other trivialities of Internet usage.

And good luck if you’ve got more than one computer in your household — which a substantial percentage of broadband households do. You can take those numbers and multiply them out by the number of users in your household.

A 5 GB cap is nothing short of pathetic. Casual users can easily run up against that kind of limit with the characteristics of today’s content, and families will be flat-out hosed. With content only getting more and more heavyweight, this situation is only going to get worse.

20 GB will probably suffice for single-person, casual-user households that don’t watch much video. But families and online entertainment enthusiasts will certainly need more, and the low caps violate, I think, reasonable expectations of what one can get out of a broadband connection.

Making users watch their usage is damaging to the entire emerging industry around rich Internet content. I respect the business needs of network operators, but caps are the wrong way to achieve their goals, and counterproductive in the long term.

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Posted on November 9, 2008, in Industry and tagged , . Bookmark the permalink. 3 Comments.

  1. I can agree with this, as far as it goes, but I think that there’s a point that’s missed: Who pays for the ever increasing bandwidth needs?

    If it’s the source (e.g., YouTube et al…. and to be honest, I’m not really sure what the payment model is up there), then you may begin pricing innovation out of the market. For example, I think this is one of the current problems with the MMOG (and perhaps the general PC gaming) market. The demand that players make for “high-quality, photorealistic graphics” among other things makes developing these hard without venture capital.

    If it’s the consumers, then you have the problem that already you have almost cost-prohibitive pricing for many people. $45/month (my Comcast 7 Mb service) is already out of reach of a lot of people. Sure, you can probably step down to 768 Kb DSL for maybe not a lot more than the old dialup days, but that’s going the wrong direction.

    Beyond that, you have the question of how to spread the cost. I’m sure this is already part of the equation on the source side, but let’s face it–a lot of the cost of the infrastructure upgrade to higher bandwidth is all on the retail distribution side (didn’t I once hear that we overbuilt fiber capacity for backbone traffic in the ’90s?). Personally, I don’t download video, or even usually watch one YouTube-like service per week. I imagine my usage would even fit within the 5 GB limit, though I’d pay for more. But what I don’t want to do is foot the bill so my neighbor can download one movie per day.

    The only way I see there being a viable business model is that heavy users, particularly on the consumer side, are going to have to pay a lot of the bill, at least until we manage a way to get broadband out without hardlines. The alternatives are to use the current models, with ever expanding caps on usage/bandwith, with perhaps a bit of a tiered system that doles out what’s available.

    A worry I have with the rise of competition, though, is that there’ll be a race to the bottom, where profit margins are squeezed and service becomes commoditized like it was in the long-distance telco market. At least there the infrastructure had been almost completely built out, and so this didn’t hurt connectivity. But not so in the broadband market.

    It may be surprising, but I live about 50-60 miles from Boston, and still have no access to Verizon’s FIOS, or even cellphone 3G coverage. In fact, at my home, I can barely get two bars on the phone, and so even though it’s a Windows Mobile PDA with a large screen, forget about using it for browsing. Even voice isn’t reliable. If we can’t get this amount of service this close to a major metropolitan hub (and one where there’s still a lot of people between me and Boston, unlike other areas of the country), imagine the work and cost needed to get major upgrades to broadband out in northern New England (which is struggling to even get DSL, from what I understand) or the midwest.

    Reflecting on this comment, I realize that I’ve said it’s both too expensive, and maybe not expensive enough. So, maybe I have a flaw in my thinking, but perhaps the real problem is that both are right.

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  3. If you are looking for the best broadband, look for one which cannot only surf the web, but can also help you access online banking, and also download live movies and music from the web. Such broadband are readily available.

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