Recent news that Comcast Corp. (Nasdaq: CMCSA, CMCSK) and other Internet service providers are starting to draw the line on what comprises sufficient Internet bandwidth raises a couple questions. First, how much is enough? And second, will capping consumer usage set Internet development back a few notches?
Comcast has announced it will be capping bandwidth use for its Internet access customers at 250 Gbytes per month. Compared to the 95-Gbyte allocation provided by Rogers Communications Inc. (NYSE: RG; Toronto: RCI) in Canada, Comcast's setting seems generous.
Other carriers are setting caps as well. Cox Communications Inc. has caps ranging from 5 to 75 Gbytes per month. Time Warner Inc. (NYSE: TWX) is evaluating caps between 5 and 40 Gbytes.
Is that enough bandwidth for most users? Comcast, which has said that caps would affect fewer than 0.01 percent of customers, says its cap would still allow up to 125 standard-definition movie downloads per month; the ISP puts average consumption per customer at 2 to 3 Gybtes per month.
Comcast has advised customers to seek out tools on the Internet to help understand their bandwidth consumption. Disappointingly, Comcast won't supply its own measuring tool to end users. Still, there are tools readily available online for this purpose, ranging in cost from free through donationware to commercial software costing over $100.
On the free end, you can find solutions like ShaPlus Bandwidth Meter or MZL & Novatech Traffic Statistics. Do they work? Yes, so long as you run Windows. Another tool, NetFlow Analyzer, runs on Windows and Linux. (Google it, though -- the URL is painfully long.)
The outcome of the advisory may turn out to be what the ISPs really wanted. As a consequence of capping, some customers have been reporting that they are reducing their Internet use for fear of being cut off if they exceed their allocation.
So why would ISPs actually seek lower traffic from their customers?
To explore this question, let’s consider movies on demand, something many cable and DSL providers offer. Prices are comparable to lining up at a video rental store, but the convenience factor is higher, even if the selection is smaller. Enter companies such as Apple Inc. (Nasdaq: AAPL) with the iTunes store or Netflix Inc. (Nasdaq: NFLX) Online, and the game changes. Now the ISP becomes the provider of the highway with no revenue increase, because the rental revenue goes to the movie provider. The bandwidth cap psychologically drives the customer back to the traditional service because there is no cap on that older type of service.
Meanwhile, consumer demand for bandwidth will only increase. In traditional Web browsing, it would be hard to hit even the smaller caps introduced by ISPs. But trends like cloud services, embedding more active content in Web pages to attract viewers, streaming video, and uploading content, particularly from social networks, will increase the demand for bandwidth.
So the situation is this: As demand for bandwidth grows, ISPs, which don’t necessarily see revenue opportunities from new services, are introducing caps.
I understand that bandwidth isn't free. But does limiting access without options to purchase more bandwidth, or introducing overuse charges that more closely resemble penalties, encourage Internet evolution? Likely not. And if the actions of ISPs in terms of caps, throttling, or deep packet inspection cause changes in the behavior of Internet users -- in the same way changes to cable services changed user behavior -- does this change the Internet itself?
It certainly could, and not, I think, for the better.
— Ross Chevalier, President and CTO of Novell Canada Ltd.
Though was'nt quite bothered about Carbon Footprint issues,rather I was more concerned about the Health of the US Economy.I absolutely hate the fact that when we have all kinds of deficits,we are paying on Average $15-17 Billion every month(yes every month) to countries like Russia,Venezuela and Iran,Countries that frankly don't like us very much.
Obviously,not everybody is going to be happy with 250GB limit.But what putting limits like this will do will slow down the spread of botnets,P2P traffic and Spam.Not to mention unneccesary wastage of electricity-So many people keep their Modems on 24/7 and download stuff they don't need only because Internet Downloads are unlimited.
I don't really know much about S.Korea but I do know this,its a very small(Geographically) country,to put fibre/Data Pipes all across the country will cost a fraction of what it does in the US.And plus,on a per capita basis its much richer than America.But you never know,with WIMAX coming on the horizon,we might actually get our wish for Unlimited Broadband for super-cheap rates.
I am not a huge movie and music download fan from the web yet, but I slowly getting there...
My current concern is that I perform 1/3 of my work from home (yes i am workacholic) and planning to make a oneday-work-from-home to reduce my carbon footprint. As part of my job, I download files, upload files, email (usually with huge attachments), etc., For now, it does put a pause on my "Green hat". As employeers are getting used to work from home, the issue of paying for the bandwidth usage is going to give them cold feet. May be we should become like south korea where broadband internet is free...
Hopefully, the ISPs while increase the cost on the usage, might also work on improving the quality and additional service for the users...
250G is nothing now and it will be less than nothing soon enough. Comcast has paying clients they are not giving it away for free. They have an antique system and they know it. No fiber no way.
Personally, I think its a very good idea.Comcast and other ISPs have spent a lot of money on this infrastructure and they need to recover their investment.We software poeple tend to forget maintaining infrastructure costs money too.
250GBs is a good reference level.All ISPs should stick to these kind of levels.What this also does is it prevents wastage of Bandwidth with P2P traffic and electricity.The lesser data there is out there,the lesser Data centres required and so lesser electricity that is wasted.
Also P2P traffic is responsible for majority of the Viruses,Spam and Botnets that exist on the Internet. This will put a Spanner in the works of malicious authors out there big time.
is this cap the outcome or the same as 'metered' bandwidth?
I've been against it from day .05 of the bandwidth limitations.
I too feel like it's a downward force. you would think that the bandwidth + tv would be the same. The 250 gb a month seems 'fair' now, but is that going to adjust as we move forward? I recall having a 107 mb hdd, then a 10 gig, 80 gig, 160 gig and 250 gig. A terabyte seemed so far a way but you can buy one now for less than $200.
Hi Paul. I don't think that the sky is falling, I'm more interested in the action and the outcomes that are already occurring. Comcast's cap is larger than many others. It's the reaction that the presence of a cap of any kind brings out in many customers that is the real risk.
Of course, we can agree to disagree. Sorry if you think I'm on a bandwagon or overhyping but that too is life. Thanks very much for posting your thoughts.
I really don't want to join the bandwagon of bloggers who have over hype this comcast intitiative as if the sky is now falling on us. I think Comcast has been very reasonable here and there is no way I could believe that they are attempting to change our internet usage pattern. 250Gbytes/Month for a Residential plan is just suffice. There are 720hrs in a month and the only way i could possible exceed that cap is to be watching one new movie after another, which of course s just impossible.
Those who think that the cap is still small, they have the liberty to sign up for the 'commercial plan' which does not have any cap and that would allow them to still use the internet as before. But the argument that this cap will redefine our internet usage just does not make sense to me. We have to respect the fact that the ISPs are busines entities and not public corporations and as such entitle to do what serve their profits well. Bandwidth hogs should just resign to the fact of having to pay for more internet usage!!
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