Recently in bandwidth Category

Bandwidth caps have more to do with preserving TV revenues than network management business. Yes, there are issues of last mile and node congestion for both telco and cableco networks. It is also a function of the band-aid approach that these companies take. instead of one huge upgrade (like say Verizon with FiOS), there have been baby step fixes.

It's also about preserving revenue. If you switch from watching Broadcast TV to just downloading Netflix and Amazon, how do the TV Providers make money from VOD (video-on-demand)? If you are watching shows via Joost and Hulu (and the coming network to replace Showtime), how does the big upgrade get paid for? The duopoly is preserving its content revenue - plain and simple.

Personally, the FTC should be investigating false advertising by the carriers - both on cellular data and broadband. In many cases, it is sold as Unlimited, but isn't. That's false advertising.

This will present an interesting challenge as people will switch. The duopoly is doing everything it can to compete on price and not value. Neither company is trying to court customer loyalty.

The ripple effect on this may be to stymie Internet business growth. Software and Application companies (SAAS, ASP), Web 2.0, and entertainment companies will find it hard to maintain customers and grow revenyue under a bandwidth cap.

I wonder how AT&T's partner, Apple, who makes the Apple TV and owns iTunes, feels about a cap, which will eventually flatten its revenues.

Not for nothing but these companies can't bill correctly anyway. There are certain to be many folks billed for overages where there are none. An even bigger erosion of customer satisfaction is coming.I guess we forget about Customer Acquisition costs and the lifetime value of a customer.

As prices of IP bandwidth sink to new lows, resellers - like Bandcon, AlphaRed, and the rest - are facing pressure. In fact, AlphaRed has apparently closed its doors, which could create problems for other resellers that it buys from and sells to, like BandCon who is the CDN for AlphaRed.  For every reseller that closes, a new one opens up.

(Please note: the other reason that AlphaRed may have closed was that the Washington Attorney General is suing AlphaRed CEO for scareware.)

Rob Powell has an update to his fiber list on Telecom Ramblings blog. What is interesting about the chart is that TWT and L3 have about the same number of route miles - 26,000 - but TWT has way more buildings lit that Level3. TWT has 10,700 buildings lit and L3 has about 7550. TWT lights about 250 per quarter. That's an impressive number. I wonder how TWT does that because 250 buildings times $7000 minimum build comes to $1.75M per quarter of CAPEX.

I also wonder how much overlap there is in lit buildings. For instance, much of XO's fiber is an IRU on L3, so likely they have a lot of overlap on lit buildings. Cogent is mainly in telecom hotels so that is a redundant lit building. (It's rare that just Cogent is in a building).

I also wonder how TWT can sell 250 new buildings per quarter, since their channel is not as active as Level3's. Maybe they have a highly motivated sales force that is told where to sell (as close to the fiber route as possible).

AT&T is testing broadband caps in Nevada. First, cable now Ma Bell. In both cases, the reason may have to do preserving TV revenue than anything. There is concern. It even popped up as a LinkedIn question.

DSL Prime is outraged over the cap and has a different view of what it means. (See here)

This is just further proof that duopoly competition doesn't work. The TIA is begging Congress for a Broadband Stimulus bill that they say will generate $1B in economic growth. Meanwhile, WISPA lobbied for a license-lite proposal for the "white spaces" spectrum, which was granted. WISPA members (mainly wireless ISPs) wouldn't mind some largesse from the government either to build out more towers and wireless links to actually bring broadband to places without it (you know, crossing the Digital Divide) -- or to offer a third pipe. (The Clearwire-Sprint-Nextel merger was approved today as well, but that company is funded to the tune of billions. Give th

Frontier Communications has added a download cap to its Internet service. It will charge folks for heavy usage.

The company caused confusion and some dismay among customers earlier this year, when it said it would charge for Internet use above 5 gigabytes per month, starting next year. [tbo.com]

What's most interesting is the comments. People are not happy about caps.

Caps are not new. We had time limits in the dial up days. (When you can only access at 33K, time is the limiting factor.) Satellite has always had bandwidth caps on its Internet service. It will become more pervasive as revenues for ISP's decline in this economy.

UPDATE:  AT&T Trials Tiered Broadband in Nevada

According to Alex Muse, DSLReports and GigaOm, Cogent and Sprint de-peered this morning in a tiff of some kind.  Cogent claimed this year that it was settlement free - coupled with its roots in the PSInet backbone network made it a Tier 1 provider. Cogent has had issues with other backbones including Level3 and Telia.

Cogent is incensed at the move,saying it violates a contractual obligation to exchange internet traffic on a settlement-free peering basis, and is taking legal action. It wants Sprint-Nextel to re-establish the link on the same basis.

So Cogent decided to make an offer:

Cogent is taking the moral high ground, and offering every Sprint-Nextel wireline customer that can't connect to Cogent's customers a free 100MBps internet connection until Sprint reconnects, though it says it can't do the same for wireless users. [IT examiner]

"The leaders of three of Australia's largest ISP's have declared the Net neutrality debate as solely a U.S. problem--and further, that the nation that pioneered the Internet might want to study the Australian market for clues as to how to solve the dilemma..... "The (Net neutrality) problem isn't about running out of capacity. It's a business model that's about to explode due to stress." [CNET]

Basically they are saying that someone has to pay for the plumbing, which is exactly what Verizon's Ivan and AT&T's CEO were saying last year (but a lot less diplomatically). As prices start to decline for bundles, DSL, and wholesale IP (down to under $10 per MB), the business models are having a problem catching up. Consumers are using the Internet more, especially for entertainment - whether that means video, music, streaming, or what have you. All of that is taxing the US ISP broadband network. Cablecos want to do preferential network management and the FCC says no. Now there are caps.

Here's where I differ. We in the US pay more than Korea, Japan or France for broadband - and get less of it. (2007 data here or directly from OECD). How come these telcos don't have network issues? 

Here's the problem with caps: No one understands what they mean -- And the ISP's are still advertising it as Unlimited! You can't say Unlimited and then have a cap. That's dishonest.  

People are encouraged to use the web. It's the communications medium - email, VoIP, IM/chat. Companies would prefer to support you via the Internet - web, IM/chat, email or forums. The average page size is over 1MB though. Add interlaced videos, pop-ups, flash intros, animated banners, and the like makes for heavy use just with surfing the web. People will switch back to phone use for support, which will tax the corporations to hire more bodies. It will also tax the cellular network as more folks go all cellular.

How about Apple TV, TiVo, and iTunes automatically downloading podcasts and shows in the background? Or Microsoft updates? Those are 300MB a pop at times. If you have more than one PC, that's a GB per update.

In these tough economic times, families getting hit with overage charges will have problems - as will the ISP's with bad debt collection.

I don't think consumers want something for free. I think consumers want what we pay for - and what is advertised to us.

Here's the thing that most folks don't understand. The main responsibility, duty, and sanction of Congress and any Federal Agency (like the FTC and FCC) is to protect the Consumer. The end user. Remember it is By and For the People. Not By and For Corporate America.

We have cable crying about bandwidth hogs and the need for network management. This goes against the grain of what you are advertising, not to mention Common Carrier ideals.

What no one at Comcast gets is that IF Congress decides to regulate or define network management, and the FCC is "enforcing" that definition, we are in a world of trouble. Expensive trouble. Expensive for the government, the court system, the cable companies and ultimately the economy and the poor sap consumer that has to pay for all this eventually. The same poor sap who doesn't understand all this or what a cap is or what 5 GB means in reality, etc. etc.

The DPI (deep packet inspection) and targeted advertising ship has a leak that developed when Congress decided to start talking to the Industry. Nothing grounds a executive more than a Congressional subpoena.

I don't understand why the big Duopoly can't just give us the bandwidth we want - like they do in Korea, Japan and Europe. Upgrades cost money, but band-aids cost money as well. Muni broadband and FTTH (fiber to the home) projects (from private companies) are on the rise because the Duopoly won't provide the fat pipe.

Cities today are competing for jobs. Broadband is a utility that companies look for when they are planning a new office, plant or facility.

More and more telecommunications looks like the airline industry. Neither industry understands what the consumer wants. Brand Loyalty is out the window. The incumbents can't spell customer service. And you don't know what the final bill will be because of all the hidden fees. Congress needs to jump on THAT. (Again this affects the economy too).

The FCC made a ruling on Comcast's network management (or P2P traffic interference). There are 2 blogs that give an excellent view of the ruling - one is from OpenID and the other from Prof. Susan Crawford.

I wonder why they just don't use the Common Carriage definition. If cable is a Common Carrier like telcos then stuff like DPI and traffic interference are a no-no. What? You mean Embarq and others are infringing on Common Carriage with something like NebuAd and Sandvine? No. Couldn't be. Not with the FCC around protecting the consumer and stuff. Oh, wait. ILEC's have a hall pass. I forgot.

UPDATE: Kevin Martin 's Open Network Manifesto on NYT.

One thing many companies complain about is the price of bandwidth. The fact is price varies - greatly. Telegeography has a sampling of how much prices fluctuate. Why do they fluctuate?

Older contracts do not have declining prices, so people who bought a 5 year deal are paying more than people shopping now.

Where is the bandwidth? In about 8 cities - NYC, LA, DC, MIA, Dallas, ATL, CHI, and San Jose - bandwidth is really inexpensive (inside carrier hotels) because it is very competitive. In these cities, just about every carrier has capacity and wants to sell it to you. As you move outside those 8, capacity, availability, lit buildings, and competition change -- so too does the pricing.

The loop, the transport, the delivery of the bandwidth is the expensive part. It needs to be factored in.

In some of the examples, customers might have bought transit from companies during a period when they were having a fire sale or just plain wanted to take business away from another carrier. Or one carrier knew that capacity was limited (or the other carrier had implementation issues), so they could charge more.

If you need it now (and you want it in Ethernet instead of TDM (OC-x)) be willing to pay extra.

Looking for bandwidth? Drop me an email let me know what you are seeing.