Earlier this week I posted my article on usage based billing and the comparative look at UBB in other countries. Today’s posting focuses on the claims that link usage based billing to network congestion. The post – and the paper – examine the congestion from three angles: the CRTC’s clear attempt to link congestion with approval for UBB (dating back to 1999), the inconsistent carrier claims on UBB, and a closer look at where network congestion may be occuring. The following is taken directly from the paper.
The CRTC, UBB & Network Congestion
UBB supporters have long pointed to concerns about network congestion as a key rationale for imposing usage based billing measures on their subscribers. The argument is easily understood – network capacity is limited and congestion on the network negatively affects all subscribers. By imposing measures designed to limit network congestion, the small number of “heavy†users who contribute most to the network congestion do not adversely affect the large number of light or average users, whose Internet use has a more limited impact on network congestion.
The link between UBB and network congestion dates back over ten years, when the CRTC first approved volume usage rate restrictions for the wholesale service offered by cable Internet providers known as Third Party Internet Access (TPIA). Shaw and Videotron sought approval for volume usage rate restrictions and the Commission approved the request based on the need to “ensure fair and proportionate use of the service by all end-users.â€
At the time, cable Internet was a shared service and the potential for one end user to affect the service of a neighbouring user was widely recognized. Accordingly, the CRTC established the following policy, conditioned on the cable providers establishing the same volume usage rate restrictions on their own residential customers:
Shaw and Vidéotron propose to apply monthly volume usage rate restrictions to end-users. For example, Shaw proposed an $0.80 charge per 100 megabytes per end-user whose monthly downstream traffic exceeds five Gb and a $2 per 100 megabytes charge for end-users with monthly upstream traffic exceeding two Gb. The carriers generally submitted that their cable network is a shared network where the quality of service available to one end-user is a function of other end-users’ usage. Accordingly, they propose traffic thresholds to ensure fair and proportionate use of the service by all end-users. Shaw and Vidéotron indicated they would apply the same usage restrictions and charges to their Internet service end-users as they propose to apply in respect of ISPs’ end-users.
The Commission approves on a final basis the volume usage rate restrictions proposed by Shaw and Vidéotron. To the extent that these carriers do not apply these volume usage rate restrictions and associated volume thresholds to end-users of their own Internet services, the Commission is of the preliminary view that such action would be contrary to s. 27(2) of the Act.
Rogers and Cogeco have not proposed volume usage rate restrictions. However, the Commission considers it would be appropriate for each of these carriers to adopt, at its option, volume usage rate restrictions and associate volume usage thresholds similar to those proposed by Shaw and Vidéotron. In this event, to the extent Rogers or Cogeco do not apply the same restrictions to end-users of its carrier’s own Internet service, the Commission is also of the preliminary view that such action would be contrary to s. 27(2) of the Act.
While cable providers received regulatory support for UBB, there has since been very limited uptake of TPIA, with some cable providers rendering it difficult for independent ISPs to adopt the service.
The path to UBB for telecom providers such as Bell, which offer Digital Subscriber Line (DSL) services, was somewhat different. With retail Internet services forborne in 1999, Bell was free to implement UBB for its retail customers, which it did in 2006.
Shifting UBB to its wholesale customers was more challenging, however, since independent ISPs purchase a regulated service known as Gateway Access Service. The regulated GAS, much like the TPIA service for cable, is not an Internet service but rather a connection between end users and the independent ISP. It is important to note that the actual provision of Internet services comes from the independent ISP, not from carriers such as Bell. Independent ISPs need the GAS in order to reach the end users themselves, since only telecommunications and cable companies have the “last mile” connection to the customer (i.e. the copper telephone line or cable connection to the home). Many countries require some form of open access to this last mile (particularly for telecom) in order to enhance competition among Internet providers.
The Commission’s UBB support as a mechanism to address network congestion was reinforced in the 2009 Internet traffic management practice guidelines as it emphasized its support for economic measures as preferable to “technical measures†that restrict users access through technical means such as “throttling.†The Commission started from the position that “parties generally acknowledged that some traffic management is required to address congestion in order to ensure that all end-users receive acceptable Internet service.†Given the need to address network congestion, the Commission noted that:
economic ITMPs would generally not be considered unjustly discriminatory, as they link rates for Internet service to end-user consumption. Economic ITMPs also provide greater transparency to users than technical ITMPs, as they are reflected in monthly bills. Furthermore, these practices match consumer usage with willingness to pay, thus putting users in control and allowing market forces to work.
Indeed, the support for economic traffic management measures was firmly ensconced in the test the Commission established for reasonable traffic management practices. The test includes a requirement on ISPs to “explain why, in the case of a technical ITMP that results in any degree of discrimination or preference, network investment or economic approaches alone would not reasonably address the need and effectively achieve the same purpose as the ITMP.â€
The Carriers on Congestion
Although the CRTC has proceeded on the assumption that UBB is a response to network congestion concerns, there is considerable evidence to the contrary. Indeed, both cable and telecom operators have acknowledged – in both statements and practices – that UBB is at best only loosely related to network congestion. For example, in November 2010, Rogers, Shaw, Videotron, and Cogeco wrote to the CRTC in support of UBB and acknowledged that it could not set pricing on the basis of costs:
UBB charges are first and foremost a mechanism for managing Internet traffic, that is to say an economic ITMP. UBB rates and caps are set at levels where they are expected to have an influence on the traffic patterns of end-users, particularly high consumption end users, otherwise they do not achieve their purpose.
Any attempt to establish rates for wholesale UBB charges based on a narrow assessment of incremental costs is destined to failure, as it would not take into account the broader behavioral impacts that permit the attainment of the underlying carrier’s network management objectives.
Bell has been even more transparent about the profitability of UBB. In a February 2010 conference call with company analysts, CEO George Cope noted:
And, of course, we’re seeing the ever—the growth—the usage of the Internet with the Internet sticks. And I think the really, really important thing for investors, which we are obviously following and executing on, is making sure that it’s a usage-driven model—and that’s the model that we’re pursuing, and at this point, the model that the Canadian market is pursuing. And that’s important to make sure we monetize this significant opportunity for our investors, and at the same time, for our customers from a great service perspective.
In an August 2010 quarterly call, Cope stated:
our data revenue growth was 3.8% for our Residential Services business, particularly driven through an increase in Internet ARPU of 3.3%. And interesting, almost all that increase now coming from usage based billing as the demand for Internet use explodes through the use of video services, and we’re continuing to see an increase in the revenue per customer.
Three months later in November 2010, Cope noted:
our residential services had an excellent revenue quarter from a data perspective, as well, with data revenue growth of 5%, driven principally by the bandwidth usage revenue being up 83% year-over-year.
Later in the same call, Cope linked increased Internet video demands with growing revenues – “as we see a growth in video usage on the internet, making sure we’re monetizing that for our shareholders through the bandwidth usage charges.â€
In other words, while the company has claimed that UBB only affects a small percentage of subscribers, it is the primary driver of increased revenues from its Internet access services division.
Shaw has also told analysts that UBB represents an important monetization opportunity closely linked to customer video usage. In a November 2010 presentation, executives stated:
In the future, we believe our usage based billing plan will enable the further monetization of our Internet business as data usage becomes more prevalent and common amongst our customer base (ie. streaming of video)
Competitors have made much the same point. For example, in reviewing Bell’s pricing, Primus stated “it’s an economic disincentive for internet use. It’s not meant to recover costs. In fact these charges that Bell has levied are many, many, many times what it costs to actually deliver it.”
In fact, Bell’s earlier proposal for UBB pricing for the GAS service (now replaced by AVP) similarly demonstrates that it bore little relation to actual costs or network congestion. First, its plan was different in Quebec, where there is a 60 GB cap, and Ontario, where the cap is set at 25 GB. The difference was plainly a function of the competitive environment, where Videotron’s 60 GB cap forced Bell to offer a similar cap in order to remain competitive. Moreover, Bell’s plan featured a 60 GB cap with an overage charge for the next 20 GB. After 80 GB, there was no further cap until the user hits 300 GB. In other words, using 80 GB and 300 GB would have cost the same thing. This suggests that the plan had nothing to do with pay-what-you-use but was rather designed to compete with similar cable ISP data caps.
A Congested Network?
Network congestion is often treated as a catch-all for a network where demand exceeds capacity and therefore cannot provide all users with maximum speeds. The CRTC has defined it as “a situation whereby the amount of traffic transiting the network may lead to a deterioration in service for some end-users.†A closer examination of incumbent networks reveals that Internet traffic traverses at least three stages, two of which typically do not raise significant congestion concerns.
The first stage is the so-called “last mileâ€, the link between the end-user and the “Central Office†(CO), where ISPs begin to route user traffic to its intended destination. The last mile is the most coveted part of the network since the ability to serve an end user with Internet services depends on last mile access. While the last mile is a critical component of the network, congestion is limited, particularly for DSL services provided by telecom companies such as Bell. This should come as no surprise since the ISP is able to limit the amount of data carried on the last mile by establishing a bandwidth speed consistent with its network capabilities. Moreover, since DSL services involve a direct connection between the end-user and the CO, there are no other users to congest the network.
The incumbent ISPs have acknowledged the absence of network congestion in the last mile stage. At a recent Standing Committee on Industry, Science and Technology hearing on UBB, Bell’s Chief Regulatory Officer Mirko Bibic acknowledged:
There is a copper loop that goes from our central office to the home and all data travels on that pipe: Internet traffic, television traffic, voice traffic, long-distance traffic. But there are no congestion issues there. The real issue is when you get to the central office and go behind it into the Internet. Fibe TV is completely different.
The second stage runs from the CO until the ISP hands off the user to another provider. This may occur at several different points. In some instances, an independent ISP may co-locate with the incumbent ISP by installing their own equipment at the CO, so that the user only uses the incumbent’s last mile, not their internal network.
In other instances, the incumbent ISP may aggregate the traffic of many users together, delivering the collective traffic to the independent ISP (if the users are customers of an independent ISP) at a later point in the network. Since the ability to deliver faster speeds to users depends in part on shortening the distance between the user and the CO, the investment in the network (which in many urban areas has been built for decades) is focused on a closer connection to the end user. With a close connection to the end user, the traffic is routed along the ISP’s internal network until it reaches the third stage – the Internet.
Once the user traffic reaches the Internet stage, it moves between other network providers to its end destination (e.g. a website or an email in-box). For traffic carried by independent ISPs, this traffic transits separately from Canadian ISPs such as Bell since independent ISPs acquire sufficient connectivity to handle their customers’ traffic demands. For the incumbent ISP traffic that originates from its own residential customers, it too is managed through peering and transit arrangements. The Internet stage naturally involves a global network and there are no significant congestion concerns at this stage either (or at least no congestion concerns specific to Canadian ISPs).
The issue of network congestion in Canada is therefore largely limited to the second stage when the user traffic enters the incumbent ISP’s own internal network (beyond the last mile) until it is handed off to another provider such as an independent ISP, a peering provider, a Content Distribution Network (CDN) provider, or a provider by way of a transit arrangement for Internet services. While congestion can arise within this internal network if the simultaneous aggregated traffic demands exceeds network capacity, there are no additional costs to the ISP – the congested traffic all runs within its own network.
Moreover, there are many ways to address this congestion. In the case of independent ISPs, the most obvious method is to hand off their user traffic closer to the CO so that it does not contribute to the congestion.
For the larger incumbent ISPs, “technical measures†– also known as traffic shaping – have become a common practice for addressing congestion issues. Virtually all of the larger Canadian incumbent ISPs use some form of traffic shaping to limit the bandwidth allocated toward high-bandwidth applications during peak periods. The incumbent ISPs apply these measures to all traffic regardless of whether it is their own retail traffic or traffic that originates from independent ISP subscribers.
There is also reason to believe that incumbent ISP networks are large enough to handle the Internet traffic without concern for congestion since the same networks simultaneously carry other high bandwidth traffic such as IPTv. The issue may well be one of bandwidth allocation. If Internet traffic demands continue to grow faster than the other bandwidth demands running on the same connection, carriers could shift some of the “space†reserved for services such as IPTv (or the chicken roasting channel in the case of cable) to the Internet and thereby relieve some of the congestion pressures.
None of this suggests that consumer broadband demand is not growing rapidly. Driven by increasing use of the network for streaming and downloading video as well as data intensive games, it clearly is. However, the demands on the network are not outside historical norms nor do they necessarily mean that the network is now “congested.†Rather, it suggests that certain parts of the network may face greater congestion strain during certain periods in the day, which can be addressed through several mechanisms, including increased investment, technical measures such as traffic shaping, and a re-examination of bandwidth allocation on ISP networks.
Michael, you forgot to mention the part of the network within the customers home or business. I have a 140 Mbps wireless network within my home and my ISP provides me with a 15 Mbps (last mile) connection to their backbone (my ISP resells ADSL to me from Telus). My ISP also runs a 9.6 Gbps backbone – which is enough to support about 640 users running full throttle at 15 Mbps.
ISP Competition, network congestion and CRTC public interest oversight are all surely April Fool’s jokes one hopes???????
@Michael
I can solve all the claims right now in 5 words. “all claims are bull-$h!t
Open up the last mile for competition
The biggest problem in the Telecom industry is competition.
UBB/AVP is price gouging not matter how you view it. It is not about Traffic Congestion, it is about behaviors modification of the users.
If congestion really exist at the incumbent ISP network, then open up the LAST DAMN MILE to all telecom competitors so that they can build their own network near the CO (Of course Bell does not want this because this is their stranglehold on competition) so we can have some healthy competition in Canada. We all know competition drives prices down and improves services.
While the rest of the world competes on how fast it takes to deliver a GB, We go backwards in this digital economy and compete on how much it takes to deliver a GB?!? Really?!?
I hope this UBB/AVP fiasco is where Canadian Citizens and our Government draw the line and open up the Last Mile. Any threats from BELL indicating they have no incentive to upgrade if the Last Mile is opened up is an EMPTY THREAT. Other Telecom competitors whether domestic or foreign would be happy to take a share of their profits from this market by building and upgrading their own infrastructure to support their clients. If the Last Mile is opened up, I guaranteed you that BELL will not only Upgrade and build better and faster networks, they will do it at a cheaper price to try and win customers back with better pricing models and better service.
Sounds like a Dream, but if we don’t dream it will never happen.
What about congestion provided by cable Internet
I would have like to see what Dr. Geist thought about Shaw’s claims about network congestion. At a Shaw UBB consultation to which I went last month, Shaw claimed that the congestion problem they see is in the last mile. They were quite emphatic about that.
Since this article started off by mentioning the past actions of Shaw and Videotron, I would expected more analysis of Shaw’s claims (or other cable internet providers) for the need for UBB on its retail customers.
April Fool
Say Michael, where are the April Fool titles?
I could definitely enjoy some humorous “Canada abolishes the copyright law” article.
Nap. 🙂
Hannah Newman
I think the congestion that Shaw speaks about is due to Shaw overselling their service. They sell higher speed Nitro etc accounts to people on nodes which can not sustain the throughput that those types of accounts are capable of. Shaw accounts can only sustain the Mbps as is provided by the type of account i.e. Nitro is 100Mbps and not much higher sustained throughput. The same goes for Xtreme 15Mbps etc.
If Shaw oversells their network without having the infrastructure supporting to the nodes and the backhaul to the Shaw connection to the backbone congestion will occur.
Shaw has not provisioned funds to cover Jim Shaw’s $16,000 a day pension so they have to cut back on something else.
…
Inspired by Netflix initiative to offer super-compressed video for the Canadian customers hit by UBB, Google is now offering a browser extension to the same effect. In addition, it also accelerates browsing speed, so nothing to worry if you’re on one of those “up to 512 kpbs” plans! 2GB/month should be enough for anyone!!!
http://blog.chromium.org/2011/04/taking-chrome-to-lite-speeds.html
Nap. 🙂
There is a big difference in the last mile network architecture between telco and cableco networks. Cable networks used a shared LAN architecture – for example, they give you a 10 Mb/s access that you effectively share with all your nearest neighbours. It works fine until your neighbours are all online and then you see contention for network resources in the “last mile”. This problem has been around since the first days of cable high speed internet and is very well understood.
Telcos use a dedicated connection between your home and their CO (or neigborhood DSLAM) for the last mile connection. The only demand for bandwidth on the last mile is from yourself so you have only yourself to blame. Many small businesses will connect all their PCs to a 100 Mb/s ethernet within their building and then try to make do with a 6 Mb/s access to the internet. Most of the time it works pretty well until you get a bunch of folks trying to access they internet at the same time.
Telcos generally see congestion in the feeder and inter-office parts of the network. Cable companies see most of their congestion in the access, but they also see congestion in the feeder and inter-office parts of their networks.
MG uses a lot of words to argue something that should be in numbers. That is he wears his lawyer hat (and argumentation) when he needs the hat of an engineer and economist / business manager. His argumentation ignores the economics within the network.
While MG says most of the last mile internet has been in place for years and there exists a disconnect between pricing and costs. The former statement can be true but the end user service connect (an investment issue)and maintenance can be a significant expense higher than the billable service charge.
Let’s look at costs that lead to/impact pricing. It is important to separate operating and repair/maintenance from building/equipment purchase & installation (capital investment)costs. Like health care medication pills with the big part of the economics in the capital investment (R&D for pharmaceuticals) rather than pill production and distribution telecommunications/ISPs faces an ongoing construction investment challenge. The challenge required high value investments at COs and the network connecting COs to ISP terminal sites as well as the equipment within the terminal facilities. The actual operating costs are not of the same degree of magnitude and are relatively small.
This has been the history of telecommunications providers. New business volumes create lots of small investment projects (measured in thousands for large ISPs such as Bell or Rogers).
MG’s analysis fails to get into this domain for real business considerations. The UBB and congestion concerns can only take on meaning in a picture that looks deeply in the total network and asks questions about investing in service supply capital to meet needs/demand at least doubling each year. When you see those trucks on the street ask what are they doing and how does it change the telecommunication services you use.
Traditionally telecommunications has been a regulated service due to near natural monopoly concerns tied to the issue of being a near public service utility. That is, the measure to reward providers has been a return on capital and providers presented to the regulator a service pricing schedule they anticipate would allow them to get the required return on capital to justify business capital growth and provide a fair return to investors (debt and / or equity).
However in the open internet world such business control measures have been dismissed and competitive (free and open) economics rule the waves so to speak. Pricing to get a return is build in but not subject to regulatory examination and justification.
THE BOTTOM LINE IS THAT AN ANALYSIS SUCH AS MG PRESENTS HERE IGNORES THE REAL ECONOMICS FACING THE ISP BUSINESS. NOT ALL USERS BEHAVE THE SAME BUT TECHNOLOGY and NEW INTERNET/CELL PHONE RAMPS UP THE DATA LINE ACROSS THE USER SPECTRUM AND GENERATES NEED FOR MORE MONEY BEING SPENT IN STREET BOXES, CO’S AND OTHER FACILITIES. THE ONLY SOURCE FOR RECOVERY IS US- THE USERs WHO MUST ASK IS THE INCREMENTAL BENEFIT GREATER THE COST.
For most of us the answer should be yes – why are we clamouring for more internet bandwidth whether at home or via smartphones: we find life is better with it.
Users need to have the investment cost awareness and understand the need to recover investment costs (to pay investors)if they expect high and constant service levels and have new services such as G4 transparently in place from their favoured ISP.
ISP competition now
Eagerbeaver said: garbage.
it seems the shills can’t keep their noses out of a regular user comment page. well Prof. Geist once your name gets in the papers there’s little chance of avoiding them.
regarding the junk that Eagerbeaver is spewing, the infrastructure that telco and cable use for internet infrastructure would exist even if internet was not a part of their offerings. it is additional to their core business. the gross income off internet is almost straight profit. these are ultimate capitalist entities, and the more you can make the better you look in the capital market. I certainly don’t mind any company making a profit. But the ludicrous greed of these avaricious piranhas of more beyond more is sickening.
Show me your books and I will be happy to pay costs plus reasonable profit.
PROVE IT !
…
@ISP competition:
A “capitalist” will charge whatever the market can bear. When he operates at the price that’s maximum possible (and over which the market will fold), they call it “the market is efficient”.
Nap.
@ISP competition now
My gawd! Using your logic a new car should be free since the assembly lines and steel mills were built in the 1930’s. Please tell me your comment was supposed to be an April Fool’s joke.
…
What’s interesting is that Michael doesn’t seem to see the BS in this statement:
“Mr. Mirko Bibic:
The point is, it doesn’t use the Internet. It’s on a separate network. It doesn’t use the Internet. Just as a cable network doesn’t use the Internet to deliver cable TV–Shaw does not use the Internet to deliver cable TV–Bell does not use the Internet to deliver Fibe TV. Just as you wouldn’t ask Shaw why their cable TV service isn’t metered, we shouldn’t be asked why Fibe TV shouldn’t be metered, because it doesn’t use the Internet.”
Mr. Bibic tries to make us think that IPTV is the same thing as cable TV. He’s quite crafty at it but let’s see what’s wrong his argument.
First, Internet is not the same thing as Internet Protocol (IP). Mr. Bibic keeps referring to “Internet” like in “the Internet backbone”. He’s correct in the sense that neither Bell’s or Shaw’s TV data does not traverse the “Internet backbone”. Yes, Mr. Bibic, this is true, they are both originated from Bell’s and respectively Shaw’s facilities, and not from “the Internet”.
But now let’s look at the “Internet Protocol” (IP). Bell’s IPTV (hey that stands for Internet Protocol TV) is transmitted using exactly the same network protocol as your computer, and traverses the same network cables and routers and machines inside Bell’s facilities as your Internet traffic. And it is this Bell’s internal IP network where Mr. Bibic admits that Bell’s “congestion” issues occur. Then we might definitely suspect that the IPTV traffic has a contribution to this “congestion”.
Now let’s see Shaw. On the coaxial cable that links you to Shaw, TV and “Internet” traffic are using different protocols. Cable TV does NOT use “Internet Protocol”. And once the coaxial cable hits Shaw, the two different protocols are split and the traffic goes to two different sets of equipment, one that talks and deals with Cable TV and one that talks and deals with Internet.
So yes, both Bell and Shaw mix TV and “internet” on the last mile. But inside their facilities, Bell continues to treat TV through the same equipment that also treats “internet”, while Shaw splits TV from “internet” them and treats them differently through different machines and cables.
So, could Mr. Bibic tell us again if IPTV can contribute to Bell’s internal network congestion (which he admitted to happen). If yes, then should it be metered exactly like “the bandwidth hogs”)? Since the effect from a congestion POV is exactly the same?
Nap.
…
Michael writes: “@mgeist: Bell hikes Internet pricing by $3/mo on May 1 , writes op-ed saying Cdns paying less”
Well, what Michael didn’t notice is that for overage calculation they will also round up your usage to the next GB.
People on dslreport are speculating that the next step will be to round it up to the next TB.
🙂
Nap.
Ok the only reason there would be congestion is because the company ie Bell, Rogers, SHAW and etc oversold the lines. Then when people get on and try to use their 24Mbit lines there’s not enough bandwidth for everyone. So yaaaahh NOT the customers fault or problem. The company is not delivering what they sold.
How the hell can you blame the customers when THE COMPANY oversold the network.
@ end user
What you have just described is “congestion”. Ten years ago a 1.5 Mb/s link was a top tier service and the average Canadian was downloading 2 GB a month. Today we have lots of service providers offering speeds greater than 20 Mb/s and the average Canadian is downloading 15 GB per month. If your service provider wasn’t upgrading the nework through regular cash infusions your internet experience would be pretty sad today.
I retired from a phone company a couple of years ago and they have gone through 5 generations of upgrades to their ADSL networks in the past 10 years. Ten years ago we were selling a 1.5 Mb/s service for $44 a month, today they are selling a 25 Mb/s service for $39 a month.
Without those network upgrades every two years nobody would be watching Youtube and NetFlix wouldn’t have even tried to start up a business based on free delivery of big video files to their subscribers.
@Norm said:
It doesn’t matter how much they upgrade, 10,000 customer on the old system downloading at 1.5Mbits is the same as 10,000 customer on the new system downloading at 24Mbits. They now download and use the system more as web technologies evolve. Soo again it comes to the company not managing the system loads properly, no different then all the shared web hosts that give you 5TB of bandwidth on a shared server then when you use that they throw the TOS book at you.
@ end user
Your hypothesis is only correct if we all go back to using the internet the same way we did back in 2000 and consumers go back to downloading a max of 2 GB per month. Remember that YouTube hadn’t been invented yet, digital cameras were still too expensive for the average consumer (a 2.1 Mp camera was the cat’s pyjamas) so there was very little photo and video traffic, and web pages were 60 KB instead of 1.5 MB in size. Internet traffic is far different today than it was ten years ago.
If we follow your logic, ISP’s should have stopped investing in new network technology ten years ago because it was good enough to the job.
I definitely do not agree.
@Norm said:
Still doesn’t matter. When the bandwidth goes up content consumption goes up and so does the size of the content like video or audio quality wise which takes up more bandwidth requirements, If the web was just straight HTML pages with text that would be a different story.
Online audio streaming went from 24K/56K Ogg/MP3 streams to 256/512K streams. As you can see the amount of bandwidth required for those applications went up quite a bit. Also back in the 1.5 days there were maybe 1-2 computers in the house to now quite a few more with the drop in cost of PC/Notebooks/Netbooks/Pads. Content consumption doesn’t stay the same as in the Dialup/1.5ADSL days, it sky rockets.
@ end user
Agree. Consumption of bandwidth has skyrocketed which means ISP’s have to add more capacity to the network. That costs big money in the access, feeder and inter-office parts of the network.
Just upgrading the access part of the network is huge but it’s an economic step function. The next step up to fiber is a very expensive one – could cost $2K to $3K per home to retrofit. That’s a $60 billion price tag to do Canada. That’s an extra $50 a month for every household for the next 5 years. Not sure Canadians are willing to pay for it.
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@Norm: “That’s an extra $50 a month for every household for the next 5 years. Not sure Canadians are willing to pay for it. ”
Those that go over the monthly cap will have to.
Nap. 🙂
A Heavey User
I read a lot of comments here about cost of equipment and maintenance along the lines of “we need to spend on upgrades because the consumer keeps using it…so it’s their fault!” To all those whiners with that argument, there is a business term that addresses this, “The cost of doing business.” Essentially it means, in order to operate there are costs that are accepted as part of that operation. For a business like Bell, Rogers, etc., you can damn well bet that line maintenance and upgrades are written into their budgets for each quarter and I believe the 1+ billion in profits from BCE show that. What I am saying here, is that like any business maintaining your equipment is paramount to your business and an integral part of “the cost of doing business.” SO STOP TELLING THE PUBLIC THEY ARE GUILTY FOR COSTING MA-BELL MONEY!
P.S.: Nice article MG.