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Home Internet – Bandwidth Usage Caps, and My Prediction

May 17, 2011

Home Internet use is at its highest ever, with Europe in 60% of homes, and countries like the U.S. and Japan in around 80% of homes.  One of the only things that exceeds that is home TV use.

And the technology continues to improve, with cable modems advancing to higher bandwidths, and many areas getting fiber to the home.  It’s not unusual to see 30-50mb/s as an entry-level offering.  And the price for Internet use continues to stay at roughly the same level as it has for years – this can only be good for us, right?

Well, maybe not.

First it’s important to understand the multiple uses of the term “bandwidth” as it tends to be over used and underexplained:

  • Bandwidth speed, or bandwidth just by itself measures the maximum amout of bits you can receive per second over your connection, or more simply it measures the speed of your connection.  So a connection rated at “50mb/s” means fifty megabits per second, or roughly 50 million bits per second.  A bit is a one or zero, and 8 bits equal a byte, which is how disk space and memory is usually measured.  For example, a modern consumer digital camera produces photos that are about 2-3 megabytes, which is about 16-24 megabits (2-3 times 8 bits-per-byte).  So theoretically, you could send 2 photos over a 50mb/s connection in about a second.  But even if you’re sending very little over your connection, it’s still being sent at a speed of 50mb/s.  There is a lot of overhead when sending data over the network so it’s not quite that simple, but you get the idea.
  • Bandwidth usage is how much data you send over your connection over time, no matter how quickly you can send it.  So if I send that 3 megabyte picture over my internet connection one day, and then the next day send it again, I’ve used a total of 6 megabytes of bandwidth.  It doesn’t matter what speed my internet connection is, this measurement is about how much data I send over it.  So someone with a faster internet connection, say 50mb/s, will likely send and receive more data over that connection in the same period of time as someone with a slower internet connection, say 8mb/s, simply because they can.

Bandwidth Speed is like the size of a water pipe, and Bandwidth Usage is like the water being sent through it.  The size of the pipe dictates the maximum amount of water that can ever be sent at a time, but if you just keep pumping water through it, your usage will continually increase.  Someone with a 3″ pipe can push a lot more water through at maximum use than someone with a 1/2″ pipe, but both the 3″ pipe and 1/2″ pipe can send as much water as you want through, it will just take different amount of time.

Why does this matter?  Faster Internet connections mean that we can enjoy a richer experience when using the Internet.  The current speeds are improving to the point where many people can enjoy high quality HD video.  Since HD video needs a lot of data to be sent very quickly, this is all about your bandwidth speed.  Just like how BluRay discs have a lot more data stored on them compared to DVDs, even though the movie playing times are the same – this means more data is being used per second to display the video.  If you’re streaming that data over the Internet, you need a bigger “pipe” so you can receive a steady stream of the video at the highest quality.

That’s great, so faster Internet connections are good for everyone!

Unfortunately, we’re seeing a disturbing trend of ISPs putting up bandwidth caps.  What they really mean is bandwidth usage caps.  That means that after a certain amount of usage, they’re going to either cut you off, or charge you more.  So you’re basically being charged twice – once for your maximum bandwidth speed, and again for your bandwidth usage.  The problem is that, even with a great bandwidth speed, your cap will cut you off or charge you more once you use a certain amount.  And the faster your connection, the more likely you are to hit that cap.

And for streaming video over the Internet, you’re extremely likely to hit a cap, in some cases after just a few days of normal usage.

The goal here is to cut the cable and stream everything over the internet.  But if your ISP puts a cap on our bandwidth usage, then you won’t be able to stream everything without paying a lot more.

Why would they do this?  Because in almost all cases, the company providing your Internet connection is the same company providing the cable you want to cut.  They make an enormous profit on the cable connection, partly because you are paying for 100s of channels you never watch, and partly because the pricing model is ridiculous.

So if you cut your cable, and only keep your Internet connection, they lose a ton of money.  So by charging you for the data you send over that Internet connection, they’ll make more money again.  And since bandwidth usage costs them almost nothing, it’s even more profitable than the cable channels they’re providing you.

If you care about this at all, write your congressman, write the FCC, and make your voice heard that you don’t want this to happen.  If you’re currently being capped, even if you’re currently not exceeding the caps, you need to stop your ISP from doing this now, otherwise when you want to exceed the cap you’ll be screwed.

Okay, so what’s my prediction?

The current model can’t survive.  We can’t have the people with a huge vested interest in maintaining the dying model of multi-channel distribution over a closed system also in charge of our connection to the Internet.  So either the government will step in and prevent them from putting anti-competitive bandwidth usage caps in place, or other players will step in.

Someone like Google, Microsoft, Apple, Amazon, or new players will become the Internet providers of the future.  They want you to get Internet as cheaply as possible so you can use their services.  And if you use other people’s services as well, that’s great.  Google is already running a trial in one small city, but who knows if it will go further.  Companies like Microsoft and Apple have massive cash reserves that could easily fund an effort of this sort, especially if the Federal Government supported the effort.

So in the future, we’ll see the end of the Time Warner, Comcast, and even Verizon ISPs, and the introduction of the Amazon, Google, Apple, Microsoft, and some new companies as ISPs who want you to use your Internet connection as much as possible.

What a wonderful future!


From → Internet

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