Warning Sign: Metered Broadband Already a Hassle

61 Comments

We’ve talked before that metered access is a boneheaded idea that is bad for innovation, bad for Microsoft and Google, and ultimately bad for you. Until today, the idea seemed like an eventuality, not an immediate reality. But then NBC and TonicTV launched a new service that lets you download video from the Olympics and watch it offline. Right next to the installation instructions was this “important”note:

That’s the first warning I’ve seen about a particular service not being recommended for folks with metered broadband access. But the real bummer? That is just a taste of things to come — especially if you’re a fan of video services like Hulu.

We’re not even talking P2P throttling, just straight video consumption. In fact, P2P isn’t even a huge deal for networks anymore (but not because of that slap on the wrist the FCC gave Comcast). DSLReports writes that as of June “AT&T traffic was about 1/3 Web (non video/audio streams), 1/3 Web video/audio streams, and 1/5 P2P.” Those audio and video streams — that’s Hulu and YouTube. And as they provide more content at higher quality, those streams are only going to increase. [digg=http://digg.com/tech_news/Warning_Sign_Metered_Broadband_Already_a_Hassle]

If metered access becomes standard, there will come a day when you spend less time watching videos, and more time counting the number of videos you watched to avoid going over your cap.

You have been warned.

61 Comments

Dave Burstein

Chris and folk

All to the point, but I wanted to talk more about the 10 cents a gig figure mentioned above. I believe I was the first to use that number, a while back reporting on a wall street briefing by Tony Werner, and I’m glad it’s getting around. No one will speak on the record because it’s so political, but several with the real information said it was about right for then.

However, the 10 cents was the cost to the carrier, and I think there’s nothing wrong with a reasonable markup. The 1000% markup in almost all the capped plans is an absolute ripoff, but I’d make a point of saying 10 to 20 cents is about right. Adjusting that ten cents for Moore’s Law drops in bandwidth costs, a large carrier is paying 4-7 cents. (Small and rural a different story.) So 10 cents might be a little draconian.

The other implication of that 4-10 cent cost for a large carrier is that folks like Telstra mentioned above are ripping off their customers, and probably also the ISPs who muct by backhaul form them. That’s true of BT in Britain and Bell Canada, but I haven’t looked closely at Australia. 250 gig free (Comcast’s suggestion) is fair based on industry cost numbers (I’ve written the DSL industry news for a decade.) 5 gig (the now canceled Frontier plan. Thank you Om for the coverage) is off the wall, and Time Warner’s 40 gig is not about real bandwidth costs but rather a disguises price hike and attempt to prevent competitive video, based on everything I know about cable costs. db

Frank

Alan:

>That last mile, so fraught! When I asked the data head end guy out
>here why the subscriber up/down speeds were asym, he said, People
>are asymmetric.
Yes, they generally are.

>6 down, 1 up. Crazy, especially when the segments at the zone
>level can dynamically allocate the backhaul to take advantage of
>idle or low usage at the subscriber switch side.
I’m not sure what you’re saying here. Operators don’t manage their
backhaul so tightly that they allocate bandwidth on a moment by moment basis.

>It’s all made up, this argument of scarcity. They have plenty of
>idle bandwidth in the terrestrial plants (cable), and they are just
>trying to set up the squeeze. DSL is a bit different, but not
>terribly so.
Work for an operator and you’ll know differently. The challenges around last mile for share technologies such as cable and wireless are real.

>There will be a new portfolio of wireless broadband ventures that
>will put the whammy on the incumbents when and if they start metering.
>Then we get our caps lifted.
Be my guest. Residential wireless broadband will always be magnitudes less than wireline technologies.

Frank

I’m right on board with Keith…metered doesn’t mean that there’s just one tier. Too often people think that there will or can be just one cap. Instead, light users will have a tier where they can have high speeds but lower caps at a lower price, and heavy users will pay more than they do today.

With metering the carriers might also be willing to raise their speeds since higher speeds does not necessarily mean greater consumption.

Ranjit Nayak

This whole notion of metered bandwidth is fascinating. It was not an issue till streaming videos slowed down productive work. Happened to speak to a university IT department recently, and they indicated how bandwidth to and from the internet backbone was their most constrained resource.

It seems that market forces are working very well here. As the demand for bandwidth has increased, providers can charge higher prices. The tiered pricing model seems fair to those who consume less bandwidth. Metering of bandwidth is also in line with my thought process as a proponent for metered pricing for high value SaaS (Software as a Service) offerings.

Dragos

“but hey guys…

this is an opportunity for multiple biz apps…”

What do you mean by multiple biz apps?

D

That telco will win lots of business actually. The problem is with the incentive. The corporations like the way things are and only seeing a huge amount of possible revenues will make them change something

Daniel M

“Mr_Brown said:
Daniel, “The reason you have had free bandwidth for so long is that the rest of the world was paying for it.”

Priceless!, but so true. As an Aussie ~$70US for 60GB then its 64k, its the undersea cable thats costs the money really as more data is offshore(from the US)you have to expect its going to start costing more.
The US has peering agreements ect ect but for any traffic abroad theres only one fast way to deliver it and that costs a bunch to maintain. Cables get broken all the time and the initial cost of deployment is massive. There is only one way it can remain affordable to deliver the bandwidth and that is for the providers investing in this rather then phat CEO paychecks. If they are generating the bandwidth they(Google, microshaft, Yahoo)should be assisting in the infrastructure deployment to help users gain access else USB drives are only going to get more popular and the advertising model WILL fail!.”
——————————————————
First:
What the heck does USB have to do with ISP and internet access. Last time I checked that was a method on connecting devices to a PC. Outside of connectiong your modem to the pc via USB you still have to pay for the access from your modem to the net(WAN).
Second: Just becuase you would prefer to roll over and let your ISP’s take advantage of you doesn’t make it right. The ISP’s complain about infrastructure costing so much so before they build they get Govt. subsidies to pay for most of it. Then they pay their costs off for infrastructure and running cost and begin to build a profit, once it gets to the point that they have to expand they either buy another ISP we helped pay to startup. They know they cannot get the subsidies they did before so they turn predatory with their charges. Some people say it’s only fair they pass the cost off to their subscribers, but they do not do this. They change the pricing and reap even higher profits without adding infrastructure. Then when they build the infrastucture they advertise it as a totally new service and jack the price up yet again. This is akin to paying millions of dollars in taxes to build Highway’s and Interstates then waking up one day to find them all privatized into tolls. Thats fine that the toll pays for the cost of laying the highway but when the taxes paid the emminent domain prices and higher for property on which it is laid, then the drivers have a right to be upset.

Yuusharo

While I appreciate people being reminded and reintroduced about this reality, the fact is the Olympics is obviously a global event. Many countries outside the United States meter bandwidth (Canada, Australia…) Their service may not be very practical in places like that.

It may yet be an eventual reality, but come on people, one single warning and suddenly the world comes crashing down around us?

Shelley

“Sounds to me like you guys in the US have a far bigger problem – the lack of ISP options. How the hell does the “capital of capitalism” end up in a situation like that? Aren’t you supposed to have aggressive marketplace forces so competitors have to strive for your $$$s?”

Capitalism in the US now consists of a few big companies partitioning the country between them, and getting government buy-in to legislate against any newcomers. Not only that, but they can usually con the government into paying for most of their infrastructure, too.

It’s not capitalism, it’s corporatalism.

sam

but hey guys…

this is an opportunity for multiple biz apps…

create the next generation adblock+ app that not only allows the user to block ads (which saves cap/bandwidth), but it also calculates the actual amount of data/bytes that these ads consume.. massage the data.. make the data available to isps/businesses.. offer this app up to the isp for them to offer to their end users on a subscription basis.. let them roll the price into the monthly rates…

think biz opportunity here guys!!

peace..

graphicartist2k5

Are they gonna start having “broadband meter maids” now? Give me a freaking break. It’s the INTERNET. When the hell are they gonna figure out that they can’t control what anyone does online, no matter WHAT they try to do about it? I’m seriously waiting for a judge to look at these morons and say, “OMG, WTF! GTFO!!!!” That would be hilarious.

Jayjay

Sounds to me like you guys in the US have a far bigger problem – the lack of ISP options. How the hell does the “capital of capitalism” end up in a situation like that? Aren’t you supposed to have aggressive marketplace forces so competitors have to strive for your $$$s?

WTF is going on over there?

Mind you, here in OZ we have metered already, but I get about 70GB (a mix of on and off peak) for $80 so maybe we’re not ones to talk.

Mr_Brown

Daniel, “The reason you have had free bandwidth for so long is that the rest of the world was paying for it.”

Priceless!, but so true. As an Aussie ~$70US for 60GB then its 64k, its the undersea cable thats costs the money really as more data is offshore(from the US)you have to expect its going to start costing more.
The US has peering agreements ect ect but for any traffic abroad theres only one fast way to deliver it and that costs a bunch to maintain. Cables get broken all the time and the initial cost of deployment is massive. There is only one way it can remain affordable to deliver the bandwidth and that is for the providers investing in this rather then phat CEO paychecks. If they are generating the bandwidth they(Google, microshaft, Yahoo)should be assisting in the infrastructure deployment to help users gain access else USB drives are only going to get more popular and the advertising model WILL fail!.

erichansa

Considering that this effects video on demand and streaming video internet services so severely, and that many ISP’s are also cable providers, it’ some real of anti-competition douchbaggery.

Jacob

Where I come from (Wisconsin), my Internet provider is also my Cable provider. They DO NOT want people getting video from anywhere other than the most expensive option of their cable service, nor do they want people chatting away on Skype or Vonage; they want them using their home phone service.

Watch as, when metered bandwidth moves away from Texas, Time Warner Digital Phone doesn’t count against my Road Runner transfer cap.

Illegal? Yes. Is the conservative McCain military-industrial complex ever going to help us ordinary people? HAHAHHAHAHAHHAHAHAHAHAHHAHAH NO, never. Corporations first.

The FCC is a joke. This is going to happen and nobody’s going to stop it. And it’s going to crush the non-text-only Internet.

Gemma K

The trouble is that in other countries there is a market. In the uk in any moderately civilized area (i.e. not 20 miles from the nearest exchange) I would have had the choice of 20-30 different broadband companies, and inside london at least 60 different companies. Each would offer me different deals and so when unreasonable metering was suggested, it lasted all of a few months because most people left for the alternative.

Here in upstate new york, i get the choice between cable and dsl, (no fios, its not got over the river yet) and there is no other option. You could also argue that since dsl in this country is so slow its not a realistic option…

These companies have sat back and done no work on their network beyond basic maintenance and raked in the profits, because they have known that only a few users would actually make use of the bandwidth offered, ignoring the many service revolutions. Now they are whining because more and more people are using what the internet has to offer and there isn’t the capacity without much more growth.

If there has to be some form of metering then make it reasonable.

For me, a 300GB cap would mean i would very rarely go over my limit, and if there is a small charge per gigabyte over, this would seem somewhat reasonable.

That said, there should be a reasonable option for those who don’t want a cap, there are people who for whatever reason use that much bandwidth per month.

Demand is going to grow, i use a lot of things on the internet, but more demand is coming, including many high bandwidth applications, and as that happens isps need to be ahead of the curve in meeting that demand rather than a year behind it.

Bob

re my previous message, if you download 50GB of porn, you pay about $30+50=$80 per month. Big Mac combo = $6.80, coke can = 1.30 from vending machine.

Bob

Here in New Zealand, we have metered broadband. It’s not so bad. The cost of DSL is equivalent to about 4x Big Mac combo (burger, fries, drink), and about 1 can of coke per GB. If you download 50GB of porn, you’re paying about $50NZ. Most people here get less than 5GB. It reallly isn’t a big deal for most people.

David

What?

$5 for 50GB? You’re dreaming.

In Australia (Where, yes, 500MB and 1GB plans are very real) it costs me a good $70AUD per month (That would be very close to $70US) for 12 Gigs of “onpeak” (Noon -> Midnight) and 24Gig “Offpeak” (Midnight -> Noon). So all in all, I get 36Gigs if I play my cards right. If I go over the 12Gigs on-peak? Well that’s it, end of the game – I get limited to 28.8kbps for the rest of the month.

A good many people in the world are suffering this already – and we’ve tried to get rid of it. But, surprise surprise, companies are after profit and so, who cares about the consumer? They need internet and they can charge us whatever they like.

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