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March 10, 2004
A step closer to metered broadband today
I have been thinking for awhile that all you can eat broadband may be short lived. Today, the Seattle regulator of broadband had some harsh questions for Comcast. Apparently they are sending nastygrahams to people who use "excessive bandwidth". But they won't say exactly what that is. They say less than one person in 1,000 use too much. They give examples of behavior that could put you on the lists, but don't say exactly how much is "too much". This is one of the unintended consequences of broadband penetration and especially P2P applications. People actually use them! I bet if someone (Comcast probably does this) actually tracked the average bandwidth consumption for a new broadband user over time, it is up and to the right. There are just ever more interesting ways to use that connection.
It is interesting to remember the maturation of dial up pricing. It started out with per minute pricing. This is for very slow connections remember. Like Cell phones. Then it moved to all you can eat. Then back to what I call "all a regular person should eat" like the AOL 1025 minutes offer. There is an architecture reason for the ISP wanting people to sign on and off like that. For every subscriber, they need a modem at their end and a dedicated phone line. There own fewer modems and phone lines than they have subscribers. Broadband connections, thankfully do not suffer from the same architectural limitations, using software at the server head end. There the limitation is how big the pipe out of the server to the rest of the internet is. And remember, typical broadband connections today are and order of magnitude or two (10-20X) faster than dial up. You can simply drink WAY more bits.
I have seen a number of business plans from start-ups that begin with an assumption of large fixed price pipes to homes with spare processing and disk storage. These start ups want to do everything from distributed enterprise storage to streaming media networks to SETI like applications using all those "wasted" or "idle" resources. The problem with most of these ideas is that only the computer resources are actually sunk, fixed costs. A broadband network is designed with certain bandwidth usage patterns in mind. There will ALWAYS be way more subscribers than the system has capacity for. When applications at the edge (like P2P, web hosting, bulk emailing) start to take up more of the bandwidth, things go out of whack. And Comcast sends you a nasty graham. I hope Comcast has their printer well stocked with paper, because the number of people actually using their connections heavily is only going up and to the right.
When the nasty grams stop working, the next step is metered usage.
Posted by Martin at March 10, 2004 8:01 PM
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Comments
I think I agree with it going the metered route, since the model is moving from "user-initiated" traffic, to "user/software-initiated" by P2P sharing software. Comcast's economic model will need to adjust as the network becomes more populated by software-initiated traffic.
Networks like Universities have often had to block the P2P ports in order keep their networks from becoming saturated by this traffic. Interestingly Napster has just offered Universities a caching system that will keep requests inside the University network, since Napster saw they might be blocked out of these networks.
Like you reference, Comcast dangles the broadband carrot in front of the public, and then finds themselves in the position of pulling back when their marketing works.
On the one hand they want to beat the hell out of DSL speeds by bumping downloads to 3 Mbps. On the other, they fear an uncontained flow of software-initiated traffic. Really on interesting study on how marketing and the economics of their business plan/system, must keep adjusting with each other.
Posted by: Kevin at March 12, 2004 10:46 AM
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