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Summary:

ISPs have staked out a singular public rationale: Data caps are necessary to limit the consumption of “bandwidth hogs” in order to protect the network experience for everyone else. But is this really accurate and what can the application providers do to help?

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AT&T recently announced the elimination of one of broadband Internet’s most prized features: unlimited use at a flat rate. While the trend toward metered bandwidth is not inherently pro-consumer, ISPs have staked out a singular public rationale: data caps are necessary to limit the consumption of “bandwidth hogs” in order to protect the network experience for everyone else. Such concepts are simplistic and easy to imagine. They are also completely wrong.

In the fixed-cost network model (used by most ISPs here in the U.S.), there’s very little connection between raw consumption levels and the relative cost of serving consumers. The heaviest of users may often be the most profitable customers, depending on when they consume network resources.

Wait. What? Heavy users are the most profitable?

Yes. Because overall congestion, not individual consumption, is the single driver of network costs. It’s not the “how much” but the “when” that really matters.

A fixed-cost network is analogous to a highway system. Highways must be designed to handle peak traffic, which in most cities is rush hour.

This establishes the initial cost of building out the highway network. When traffic grows, new lanes have to be built and new costs are added to the equation. It is not the 2 percent of cars using the empty roads at 4 a.m. that creates the demand for new lanes.

It’s the same for your ISP’s network. On your ISP’s network, “rush hour” is called “peak time,” with congestion usually occurring between 7 p.m. and 10 p.m. The capacity required to handle these peak times sets the cost benchmark.To continue with the highway analogy, would rationing gas or capping miles on everyone’s odometer solve rush hour traffic?

No, of course not. People would still prioritize use of their car and precious miles to get to and from work. They might take fewer road trips on the weekends when the roads are already clear. Rush hour would still exist, and the road would be no cheaper to build or expand. Likewise, bandwidth caps won’t relieve congestion at peak times.

No one wants a global Internet riddled with traffic jams. Not users and certainly not video-on-demand services, cloud companies, MMO games, or any other services requiring bandwidth. The fact that these services require more bandwidth has been a boon for ISPs. They drove consumer demand for broadband, which is much more lucrative than dial-up Internet. Therefore, we all have a stake in ensuring a healthy Internet.

But if not data caps, then what?

BitTorrent is in a unique position to understand network challenges and usage patterns. It has over 100 million active monthly users in every connected country in the world. This gives us significant insight into network speeds and congestion. Our data indicates the solution is twofold: High-bandwidth services need to be good citizens and peak usage needs to be brought under control.

Yield to Priority Traffic

Since any data traffic that doesn’t induce congestion on a fixed cost network is essentially free; applications can voluntarily play a role in traffic prioritization. And since BitTorrent is a high percentage of global Internet traffic, we have a responsibility to be a part of the solution.

This was the primary motivator around our release of a new protocol a year ago, called µTP. The protocol essentially senses congestion and self-regulates to avoid contributing to Internet traffic jams.

Because µTP can never induce network congestion, it doesn’t contribute to an ISP’s cost. An ISP still has regular network maintenance expenses, but remember, with a fixed-cost network, traffic only becomes an economic burden if it contributes to congestion and forces the need for expansion.

As a result, µTP is exceedingly friendly to ISPs and their business model. µTP is open-source, and we invite application and cloud services providers to work with us directly or in the IETF’s LEDBAT working group in the ongoing innovation and usage.

Voluntary good citizenry on behalf of the industry is a start, but it’s not a complete solution to congestion.

Peak Pricing

One idea is to pursue congestion-based/peak hour pricing. Like the fee to enter London streets during rush hour, congestion-based pricing is a reasonable compromise to alleviate Internet logjams at the times it’s needed most, while letting consumers surf freely the rest of the time. For example, your Netflix movie rental could be set to download overnight if you plan ahead. And if you don’t? Perhaps you pay a premium to download it on-demand on a Saturday evening.

While congestion-based pricing directly targets the incentive structure around the problem, we recognize it would be difficult to implement. The CONEX working group in the IETF — focused on developing a mechanism by which senders inform the network about the congestion encountered — is aimed in this direction but implies wholesale changes to the current Internet economic models. At BitTorrent, we believe any solution targeting the actual problem is worthy of serious consideration.

Ultimately, this isn’t just an ISP challenge.

Keeping the Internet healthy for consumers and a place for prosperous innovation of new services must be the top priority for all of us – ISPs and the technology industry alike. Limitations will stifle the growth and potential of the Internet. Instead, let’s look at real-world technical and business solutions to serve the needs of our mutual customers and protect the infrastructure on which we all depend.

Eric Klinker is the CEO of BitTorrent, a file-sharing application.

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  1. “Since any data traffic that doesn’t induce congestion on a fixed cost network is essentially free; applications can voluntarily play a role in traffic prioritization.”

    This should be a comma, not a semicolon. In this use of the semicolon, the two clauses must be independent clauses, which they are not.

    This has been your obnoxious grammar comment of the day.

  2. I was digging (no pun intended) this article until it got to the embedded sales pitch. I agree with most of it but wished you would have presented your new protocol as a one of many solutions; not the solution. Lost interest after second paragraph in “Yield to Priority Traffic” section.

    And a genuine LOL @ Chris’ comment.

  3. Makes a lot of sense — just like voice plans make a distinction between peak hours and off-peak/weekends. Why don’t the carriers get it?

  4. Under the original Telecommunications act, telcos had to put their profits back into upgrading the network. Part of “Reaganomics” was to let them keep their profits, because at the time the network was as big as we needed it to be. If it wasn’t for that we would have internet speeds like Japan and parts of Europe.

  5. Arthur Pearson Wednesday, March 23, 2011

    Your idea of ‘downloading’ Netflix movies overnight is nonsense. Netflix movies are streamed, in many cases to devices that have no local storage.

    1. Indeed, the concept of downloading a Netflix movie has other issues associated with it. The concept of “on demand” is exactly that. The companies really just need to reinvest in infrastructure, looking at the long term return. While the caps are a stop-gap measure, my fear is that companies will continue to avoid putting the money back into infrastructure.

      1. When you apply the 80/20 rule and realize that 80% of the customers are watching 20% of the content you only need to download the 20% of content to customer’s devices during off-peak hours to substantially reduce your bandwidth requirements during peak hours. Everyone can still access all content “on demand” but you save significantly on bandwidth costs due to the content that is watched by 80% of customers already being local when they want it. This idea might work well for IPTV providers trying to expand their VOD offering while reducing the cost of expanding their core network.

    2. +1 to Arthur’s comment. And Nate said it correctly. The reason these companies are placing caps is because they are greedy and they want to make an extra dollar on their outdated “road” as you put it. It’s past time to widen/rebuild the road and make it a lot more like the Autobahn. If the networks were upgraded to the place they should be by now, we wouldn’t be so far behind some other countries and the current price model wouldn’t be in question.

  6. Eric Klinker is the CEO of BitTorrent, a file-sharing/file-piracy application.

    There, fixed that for you.

  7. Why is BitTorrent described as “profits from greed and illegal activity?” Because some users choose to use it for illegal purposes? If your users use YOUR service for illegal activity when they are paying you, does that make YOU the greediest of all?

    BitTorrent is a service used to download huge files and documents easily. I use it regularly, and not for any illegal purpose. Indie musicians often distribute their music via BitTorrent as it’s more expedient and cheaper than taking a hit from the big providers. It’s also STILL the easiest way to grab a Linux distro.

  8. some people are not getting what is going on with this data cap thing. If you don’t oppose it before it stars you are the one who will be paying for it. And the far behind we already are in internet service compared to some other countries it will be just like taking a step backward.
    people need to understand that what the ISP’s are saying are lies. But guess they don’t have enough technical knowledge to understand that which explains why they don’t care, probably because they don’t use as much data.
    But at least try to understand that if every ISP’s start doing that, a lot of innovations will be hindered and eventually north america will be the under dog compared to the super fast growing asian countries.
    now do you want that to happen ? trust me you let the corporates take too much control and we are heading straight that path.

    1. The real issue is that the incumbents want to control the content as well as the pipe. All this hype is nothing more than a distraction of that fact. The old school of “divide and conquer” seems to at work.

  9. If the speed is capped why does it matter how much data is consumed? No matter if you are downloading a 25MB file or 1 TB, you have to figure if you are capped at 10 Mbps then that is all you can use at that point in time. If this is the case then how is congestion possible?

    This highway analogy is broken, anyway. Highway traffic is not simply caused by volume or a time of day. It’s caused by people following too closely behind each other. When one person brakes, each person following too closely behind must brake exponentially harder until traffic eventually stops. I shouldn’t have to say this but internet traffic doesn’t have brakes and as a result doesn’t suffer this specific type of problem.

    We need to stop using silly analogies like highways and pipes when referring to the internet. I think big ISPs rely on this nonsense to confuse the general public. If there is such a thing as congestion it’s a result of their out of date and obsolete infrastructure and not the responsibility of services or customers. It no ones fault but their own that they fell behind while lining their pockets with money.

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