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Summary:

Congress, along with many in the content industry, are wondering about the fate of television in an Internet Age. I think the future is broadband, and I’d like to offer this chart from Sandvine, showing that the future is already here.

sandvinespring

Update: I grabbed most of the information in this story from a fall Sandvine report. This was noted in the story, but today Sandvine issued a new report that offers a snapshot of March 2012 traffic. Today’s report also focuses primarily on mobile, instead of television and data caps. So I am swapping out the main chart because the consumption of video traffic has grown over this time frame but keeping the information, including the pull quote from the fall report. We’ll cover the mobile network implications in a later story.

Congress, along with many in the content industry, are wondering about the fate of television in an Internet Age. I don’t have answers about the future of television, but I did share a list of questions I think people in Congress and even in the industry should be asking about the relationships between ISPs, content companies and web startups. And for those who even doubt that the future of TV involves broadband, I’d like to offer the following chart, from showing that the future is already here. We can’t put this genie back in the bottle.

The chart below is a snapshot of global internet traffic during March of 2012 courtesy of Sandvine, and shows that real-time entertainment (primarily video) traffic is almsot 65 percent of U.S. network traffic, up from 53.6 percent compared to a snapshot taken last September.

Sandvine, a company that makes deep packet inspection gear for service providers (its gear was used by Comcastback when it was caught blocking P2P traffic), put out a snapshot of the traffic flowing across the global Internet in September 2011. Other than the rise of video consumption and the loss of social networking from the top 5 traffic drivers on the download side, the big story was is how to adapt our networks for video usage.

Half of our Internet use is related to video according to Sandvine's fall 2011 data.

Sandvine’s fall report points out one of the problems with video traffic; namely that it can expand to fill the capacity allotted to it. When capacity is scarce, the quality of video drops from HD to SD or is downscaled, but when congestion clears, the video service will start sending more packets to bump up the quality. This is good for consumers, but it can fill a network, and make it hard for operators to deliver a consistent experience for video and on networks where subscribers use a lot of video. Technical solutions such as adaptive bit-rate streaming or buffering content to a hard drive help. But Sandvine concludes that basic monthly usage caps, such as the ones ISPs are implementing, don’t.

From the fall report:

Monthly usage quotas have only a limited impact, if any at all, on peak network demand; however, quotas that differentiate between peak and off-peak might have a larger impact. If users had 200 GB per month to use at peak, but unlimited usage at other times, then they would be more inclined to change their behaviors. As an added benefit, the user would perceive a higher value of service (again, if ‘value’ is directly associated with data consumption) due to increased overall usage, without the network operator incurring additional cost to deliver the off-peak bytes. Higher subscriber value and flat operator costs? Sounds like a classic win-win.

Which then leads back to one of the questions that wasn’t asked yesterday at the Senate hearing on the future of TV. Are caps a worrisome protectionist tool to keep subscribers locked to both broadband and pay TV subscriptions? And if that’s a yes, then what should the FCC, Department of Justice or Congress do about it?

  1. No, caps are a means of managing a scarce resource. You are arguing for a transfer of economics from network builder / operators to the Netflix of the worlds. Free riding is called free riding for a reason. Ultimately, someone has to pay for the network if you want the network to continue to work. Operators will have no incentive to do so if you forcibly shift the economics in favor of over the top providers.

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  2. Boris Pretovsky Wednesday, April 25, 2012

    All of this talk of network congestion is misdirection to make people think about subjects that are meaningless.

    If someone wanted to, they could build fiber optic connections right now to handle internet traffic for the year 3000. The process is not that expensive. They are not building Stealth bombers or sending men to the moon. They are using readily available construction equipment that can be rented from U haul to dig a hole, bury cable in it, and cover the hole back up with dirt.

    Children dig holes and fill them back up just for fun.

    If the country cared more about keeping itself up than in spying on and killing Muslims, they would take the money they are using to spy on and kill Muslims, and use it to start a public works program to build a fiber optic network across the country like the public works projects they had back during the depression.

    A public works project that helped every citizen in the country would cut corporate political donors out of profits though, so it is unlikely such a common sense, rational approach will be taken to solve the problem of internet traffic congestion.

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  3. Measuring the popularity of broadband video by measuring the total traffic it accounts for is slightly misleading. Video files are inherently large, and as the article points out, their file size can expand as better bandwidth becomes available. Other extremely engaging online activities – for instance, playing World of Warcraft – result in much smaller data packet transfers but may be consuming vastly more user engagement time than video. My point is that the amount of data transferred is not, in itself and in isolation, a useful indicator of anything.

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    1. Unless your goal of course is to discuss increasing data consumption. In that case it makes sense to discuss the data usage of video. Who cares about engagement when you’re talking about data consumption.

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  4. Sandvine is at the middle of artificial business models, and here again they are creating another one. On one hand they say that raw bandwidth caps aren’t really effective because it is the people who are using bandwidth at peak times that are causing congestion, not just general bandwidth usage. Then they go on to suggest that what is really needed is an artificial congestion time created similar to what electric companies have so that you can cap the bandwidth at peak times only and then leave it unlimited elsewhere. Of course the next thing which they didn’t mention is that they have a piece of hardware they’ll sell you if you would rather invest in controlling your existing traffic then build up your network capacity.

    They are not reputable in this case because their interests do not align with the ISPs, consumers, or businesses that rely on the internet. They are just out to sell networking gear and they’ll lie to anyone who will believe them. Here’s an idea lay more fiber invest in your network and then there won’t need to be bandwidth caps.

    Now as soon as you tell ISPs to invest in their infrastructure some poor small ISP says, but we don’t have unlimited bandwidth and we don’t make much money at all so everyone else should suffer because we are getting screwed by the big ISPs in traffic trading. Well go cry to congress about the large traffic brokers screwing you over, but breaking the entire internet is not an answer, and should be illegal. Far more important things rely on that infrastructure than your bottom line.

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