Is The Bandwidth Limitation In Future A Big Danger To Internet?

The era of free broadband has nearly come to an end

Is the future of digital Disneyland where one plays and work online at risk? The reason of such a question is broadband carriers will not be able to support it. The internet providing lots of things as free will to download has led more and more people going for downloading data in gigabytes at no cost. It is assumed that even if the capacity of broadband infrastructure is doubled or tripled there is no way to avoid abrupt stoppage of work.

The time for free ride in broadband services is almost over. According to uSwitch a consumer research group in U.K. the broadband carriers are about to put “soft caps” for usage on millions of users. In US the customers came to know about the soft caps imposed by some carriers after they were billed on exceeding their limits in their plans which were inaccurately labeled unlimited; the limits had been hidden in the fine print contracts. Comcast offers cap of 256GB in a month. Few carriers have tiered pricing where you have to pay more for more usage just like in case of gas, electrical and water.

What for the is bandwidth in demand? While downloading Iron Man in computer hard disk, using for business purpose cloud computing services, collaboration technologies for connecting unrelated workforces, downloading music and entertainment files, playing of online games and utilizing remote work tools like VoIp, VPNs and app streaming.

Michael Voellinger working as senior vice president with Telwares which assists clients in telecommunication management says that within two to three years the demand for bandwidth is to double or triple but as bandwidth is a shared resource it can have certain amount of capacity only.

Some analysts are of the view that there is no bandwidth crisis with plenty of available capacity. Derek Turner, research director with Free Press’s anti-“big media” advocacy group responds – If there were any shortage of bandwidth looming, the carriers would have not given second thoughts to imposing tiered pricing  and since only few have imposed the limits points to weaknesses specifically to their infrastructure and not to shortage of capacity in general.

Taking into consideration the intimidating bandwidth shortage which may be general or local in some areas analysts agree to change in two things. First, bandwidth pricing should be related to the amount of usage like in the case of other precious utility such as electricity or water, which in very clear terms means heavy users to be charged more. That will discourage wasteful usage and in addition will bring more money to support the increase in demand usage. According to Elroy Jopling, Gartner analyst, as broadband is to be treated as utility, one can’t leave the valve and let it run without any control. Second in the line is need to rework on networks, content and protocols so as to use less bandwidth

It’s unlikely that federal government will step in to get this problem solved; it is left to telecom industry to have their own approach to fix this problem. The options available with the telecom industry are to increase revenues by charging their customers more or by putting a limitation to their use through charge of penalties.

Check in Video usage a key to control bandwidth usage

The main cause of high bandwidth usage is video that is generated by user or is commercially available. According to Lisa Pierce, Forrester Research analyst, carriers has been wrong in estimation of video usage. He adds – as claimed by AT&T that video is responsible for 40 percent of its internet traffic that is being catered which has risen from almost nil some three years back.  5 per cent of AT&T subscribers are using half of the broadband usage and it’s because of these subscribers that it is forced to explore a new pricing slab, that’s what an AT&T spokesperson added.

The media services are no exception; they are equally responsible for eating up bandwidth. Garner analyst Jopling has put up a rough guide for consumption that 96 GB monthly usage cap can support: interactive gamming for 32 hours or

9 00,000 e-mails, 48,000 photos or 24 HD downloads of movies. A download of single high definition movie uses 4GB to 5GB about the total amount of data that a normal broadband subscriber usually downloads during a month.

With such a huge amount of video being downloaded over the internet, carriers were able to observe tremendous rise in bandwidth usage. Amazon.com, Netflix and Blockbuster Video have different services for movie-downloads with an option to put the videos straight into TiVo digital video recorders. Customers are happy to have such a convenient delivery options without being aware that these activities consume lots of bandwidth.

Today’s youngsters of the age 10 to 22 years have pushed the problem of bandwidth even further, observes Amanda Sabia Gartner analyst. While doing study in several focus groups she found that this age group expects to use video even more then average user but at the same time expects not to pay extra for the same. Pierce from Forrester thinks that problem with bandwidth-consumption is going to become grave as these next-generation students start working for the companies. These people have been groomed with the idea that video, gamming and music are free of cost and unlimited. Thus they are going to act accordingly.

Pierce adds that students of today are engrossed in the wired world which may be great for education but is not the real world.

Pierce notes that internet being used for content and services increasingly, real issue is not video. The high usage limits will keep on moving with time all along the entire life. As for example, 10 percent of the total internet traffic is represented by Facebook traffic. Over that there are abundance of YouTube videos, games to be played online, sites like Disney which is full of multi-media and sites that automatically launches videos when users visit them like ESPN, all these consume huge amount of bandwidth capacity.

An enterprise architect, Jack Wilson at Amerisure Insurance has shown concern that websites have large amount of stuff that is highly rich in videos. Amerisure Insurance which has large workforce working at remote depending on residential broadband service to accomplish their jobs has made Jack Wilson apprehensive about the problem it may cause inside the network. According to him even half a dozen streaming audios can create an undesirable effect in the pipe even to the remote locations.

The distribution of the content decides the contribution to the problem of bandwidth usage. Pierce noted that peer to peer traffic that includes share videos, music or playing games is not as effective as compared to streaming content provided by a single provider. The reason is simple; the architects of the network have not designed it for the purpose of peer-to-peer communication where bandwidth is used almost equally in each direction but broadband networks have most of their bandwidth reserved for downloading. That implies that uploading channels having constrains clogs faster and downloading channels in that case remain idle waiting for upload to complete.

Pierce added that Japan’s telecom industry is exploring a restructure of broadband network in terms of architecture which will work better for peer-to-peer traffic. The up-coming protocols for peer-to-peer communication may be more competent than the traditional traffic on the network that will be re-architected. But the job of re-architecture of network is an expensive as well as time consuming. It may take many years so even if it may be a better model, it will not be practically in place within short span of time.

Companies have their own contributions to bandwidth capacity problem, though not as high as the one due to video. As more and more employees are allowed to work from home full time or during certain period, remote tools like VPNs , VoIP and videoconferencing are consuming bandwidth at no or very little cost burden to company. Jopling, a Gartner analyst feels that consumption of bandwidth by such services is not as much as video and present broadband infrastructure is capable of handling them but the future bandwidth requirements could be a big hindrance for these services. He adds that all entertainment to be delivered digitally over the internet will be unrealistic for that one would need fiber to every home for unlimited capacity.

Factors playing against the increase of capacity

From the day cable and DSL service were available only few years ago, the Americans’ have carved for broadband that too enormously. As per the survey conducted by American Life Project and Pew Internet, it is found that over half of the America’s adults have broadband at home and one third of them are having premium broadband service that provides internet connection at higher speed. Leichtman Research Group reports that the top 20 telephone and cable providers like Comcast, Time Warner and Cox for cable and Qwest, AT&T and Venzon for telecom have nearly 65 million subscribers that represents 94 percent of US market.

The carriers are now opening pipelines for example, Verizon is to invest $23 billion to roll out its FiOS the fiber-optic network in many parts of the country by 2010 that will provide internet, telephone and television services at about 100Mbps download speeds. AT&T is to spend $4.6 billion for up-gradation of its network that is to use fiber optics. Broadband cable providers also have their plans to open the pipe. A wideband technology where cable operators can combine several channels to increase internet speeds up to 150Mbps is set to be used widely.

But such big investments for improvement of service infrastructure are hard to come along as Wall Street doesn’t like them. The investment on capital improvement has a direct effect on its profit, effectively reducing profits of the company. This is not received well by investors thereby reducing stock prices of the companies, notes Turner of Free Press has to say. He adds the pressure exerted by Wall Street is final since there is little or no competition among most of the broadband service providers.

Time for usage caps, metered internet and overage charges

In spite of discouragement for capital investment, carriers have started investing in it. Main reason being there is not enough market for new customers left even though broadband is readily available in urban and suburban areas. According to Gartner’s Jopling, carriers can’t afford to raise prices of the services that are being provided as current prices being already high so as to attract new broadband customers. Also it will not be a wise step to lower the price to attract the new ones as that will have negative effect on revenues of the company as existing customers will opt for lower-priced plans. There is a limit on deciding the prices whether high or low. The lower prices are expected only when fiber reaches every home as that would make the capacity unlimited in real sense.

Now there are two options with the carriers : one – high capacity and premium-priced services (tiered pricing) and two – usage based charging. Experimentatios are on by the carriers for making more dollars.

Usage caps have been used secretly by several carriers for usage-based pricing but people taking the help of law to nail the broadband carriers have stopped the carriers from using these secretive ways. Comcast had to shell out $150,000 to Florida to reach a settlement its policy to prohibit the excessive use of bandwidth without letting customers know their limits. Because of this some customer decided to cut off their service. From October Comcast started new policy in which there is limit of 250 GB, the amount of data that can be send and receive in a month. Those who violate will attract suspension of services for a year.

Time Warner Cable is in the phase of testing pricing based on metered usage. The subscribers of Beaumont, Texas are taken as case for testing. Price is kept as $29.95 for the speed of 768kps and 5GB per month usage cap and it rises up to  $54.90 for speed of 15Mbps and 40 GB cap. Above the cap for every 1GB it costs $1. Subscribers have facility to check their usage on web page provided by Time Warner Cable. AT&T has offered similar plan in Reno for testing. The basic plan is of $15 having speed 768 kbps with 20 GB per month usage cap. It has a plan of speed 10 Mbps and 150 GB usage cap per month which is yet to be priced. For every extra gigabyte user has to pay $1. The usage can be checked on AT&T’s web site.

The metered billing plan had been not to the liking of the users. AOL was the one who introduced metered billing when internet had just started but was rejected by the customers. Ultimately unlimited usage plan was introduced in 1996. As Time Warner Cable has brought back which people once rejected, Turner of Free Press complains the overage fees with applicable rates are very different from the actual costs. There is doubt to find the shift towards caps and overage fees as consumers dislike surprise bills the most. Teleware’s Voellinger agrees to that; according to him cap is not a solution of the problem, its nothing but putting a limit to what people have to do.

High Efficiency should be the motto of Broadband and service providers

Customers can be blamed for bandwidth overuse but to single them out is not fair.

Free Press’s Turner makes a point that consumers are paying for the bandwidth that they use though partially. Web hosts are being paid by the content providers depending on the traffic they use; customers here pay based on usage. The payment done by video provider is more as compared to simple web site. This usage based money find its way right through the broadband ecosystem, each web host has to pay to the dedicated internet provider depending on usage, each dedicated internet provider has to pay to backbone providers again based on usage and each backbone provider pays the intermediate and last mile providers ultimately based on usage. Though Facebook, the content provider is not charging directly its customers, it has to pay for the traffic that is being used with the help of fees it has to pay indirectly or directly to all the infrastructure providers those have been used in between it and its customers.

Forrester’s Pierce states that these indirect payments are not enough for the carriers’ bill. The providers only have to pay for the bandwidth used to put anything into the internet but as the content and service launched into internet is to be used repeatedly the uploading cost is just a fraction of the cost of downloading. Suppose if Apple or Netflix uploads a video into the internet, what they pay is for the traffic of that single upload, there is no payment done for the multiple downloads that users do afterwards. This is the reason why carriers are more concerned about charging users based on their consumption.

Pierce suggests that more upfront payment should be done by content providers. She quotes an example of Kindle book’s reader service from Amazon.com, in that Amazon.com has to pay Sprint for each e-book sold as Sprint delivers the content on its 3G cellular network. She fair enough acknowledges that this deal is a straightforward with Sprint’s network only involved. The same approach can be applied to the existing system where content providers pay the carrier for the traffic generated through their dedicated internet providers or web hosts. This method of pricing will have an advantage that costs will be borne by those who actually used the content.

Telware’s Voellinger says that in whatever way the usage costs are allocated, there is still a scope for better use of capacity that the broadband providers already have. There is a need for optimization of network and higher delivery capacity of broadband. There is still some space in bandwidth capacity to do lot more. Forrester’s Pierce agrees to the fact that carriers are not utilizing their network-management capabilities evenly. As internet being a shared network, a carrier that under-performs in its network management capacity will be bottleneck for the traffic that has to pass through it. Internet traffic before reaching the user has to pass through dozens of networks, so the probability of coming across a bottleneck segment is comparatively high. She adds that weakest link is to be attended to have best experience.

Forrester’s Pierce says that as compared to ATM and frame relay traffic, IP traffic is notorious in its prediction. So carriers plan to reserve 50 percent over the peak traffic in case of IP traffic while for frame relay it is 30 percent more than the peak value. The network-management technology will assist broadband providers in dealing with peak traffic problem. Pierce also believes that tired pricing in a way will make internet usage predictable precisely more thereby helping providers to be less cautious about their capacity and hence will be able to free the existing capacity.