Verizon, at&t Take Different Approaches to Bandwidth Caps

For an industry that in decades past has tended to move in lockstep, it is refreshing to see an ever-increasing divergence in strategies and marketing positions. Consider the matter of bandwidth caps and content filtering.

at&t has decided to filter non-authorized content on its broadband access networks. The move is an attempt to reduce the peer-to-peer bandwidth load on its networks.

Verizon, on the other hand, doesn't want to do so and says it will not. Many policy advocates will cheer that stance.

One might credit Verizon's decision to move to a fiber-to-home network for that laudable move. Simply, Verizon has a lot more headroom than at&t will to support today's heavy users, and ultimately, heavier use by nearly all users as more video moves to Internet delivery.

Beyond the policy stance differences, and the customer goodwill Verizon will garner, the notable difference stems from fundamental decisions each carrier has made. Verizon made a risky bet in the face of nearly-universal investor opposition. at&t took a less-risky path that was rewarded by investors.

But each of those decisions now has repercussions in other areas where technology now conditions the marketing decisions each company can make. I've said it before and will say it again: Verizon did the right thing sticking to its FiOS program, in the face of intense financial community pressure.

In the years to come, that technology and financial decision is going to give Verizon many options other contestants may not have.

Fuzzy Thinking on Network Neutrality

With the caveat that "network neutrality" means different things to different people, it is striking that some observers think bandwidth caps for excessive use have anything whatsoever to do with network neutrality.

That's a little like arguing bigger or smaller buckets of mobile voice or text usage constitute some sort of "neutrality" issue. It's a business issue, nothing more.

The discussion is sparked by news that Time Warner is testing usage-based pricing for broadband access in a few markets, for new customers. The idea undoubtedly is that the new plans will be price neutral for 95 percent of customers, and affect only "extreme" downloaders or really-heavy peer to peer customers.

Once the test starts, new customers will be offered a choice of four plans that allow them to download set amounts each month--5, 10, 20 or 40 gigabytes. The typical user now consumes something on the order of three gigabytes a month.

Fair Use: Tragedy of the Commons

I might not be the most popular user in defending "fair use" policies, but I have to tell you there is such a thing as the "tragedy of the commons."

Without being overly literal about it, the "tragedy of the commons" is a way of describing how free access and unrestricted demand for a finite resource ultimately dooms the resource through over-exploitation.

This occurs because the benefits of exploitation accrue to individuals or groups, each of whom is motivated to maximize use of the resource, while the costs of the exploitation are distributed among all those to whom the resource is available.

As a westerner, I'll illustrate the problem by pointing to the history of conflict over grazing and water rights. Assume you are a cattle or sheep rancher, grazing those animals on open range that actually is owned by the U.S. government. Assume the market for livestock is good. Each rancher then has an incentive to add animals to the herd, increasing the intensity of grazing. At some point, there isn't enough grass to support all the animals.

Now Internet access is a shared resource, by definition. If you use a cable modem, the actual bandwidth is shared by a large number of end users. If you use Digital Subscriber Line, the sharing happens further up in the network, but the resource still is shared. "Oversubscribed," we like to say. One never provisions enough bandwidth to meet the full theoretical demand any single subscriber might use.

Basically, designers use statistics to provide enough bandwidth to meet average demand, at average times of day, and day of week, to meet the demand created by users who actually are online and using the resource at any given point.

But those statistics are based on "typical" demand. So what might be typical? For a consumer user, somewhere between one and three gigabytes of use in a month. My business use--and I am on the Web all day from roughly 6 a.m. to 8 or 9 p.m.--runs about 2.5 Gbytes a month, typically.

There always are a small number of users who "graze their cattle" vastly more extensively than the rest, creating something that might be less than a major "tragedy of the commons" problem, but clearly consuming enough bandwidth that user experience for all the other users paying the same amount of money is degraded.

"T'aint fair." There's a solution for very-high usage: buy a business plan that really offers "all you can eat" bandwidth at the level you require.

At Qwest Broadband, for example, the illustrative volume that really is excessive for a consumer user might be:
• 300,000-500,000 photo downloads in one month
• 40,000 to 80,000 typically sized MP3 music downloads in one month
• 15+ million unique e-mails each month
• Online TV video streaming of 1,000-3,000 30-minute shows each month
• 2-5 million Web page visits (approximately one every second, 24 hours per day)

Those of us who have jobs, spend time outdoors, play sports, garden, ski, raise children, go shopping, read books and so forth really don't have time to consume that much data in a month.

Some people might have to do those sorts of thing for work, but that's the point: buy business bandwidth that clearly is sold with the understanding that if you want to push the network that way, you pay more for the privilege.

So long as access bandwidth is a shared resource, there will be a "freeloading" or "tragedy of the commons" danger. Good citizenship, good manners and good neighborliness requires a little respect for other people here.

I fail to share the "outrage" of people who think they should be allowed to overgraze the commons. Nobody has a "right" to impose those costs on the rest of users who "play nice."