Article in the WSJ today talks about the network impact of the iPhone: http://online.wsj.com/public/quotes/main.html?type=djn&symbol=t
Users of iPhone download games, video and other Web data at two to four times the rate of other smartphone users, according to comScore. Yet AT&T charges iPhone subscribers the same fee of $30 a month for data that it levies on other smartphone customers. And aside from restricting certain activities, like file sharing, AT&T doesn’t limit how much data can be downloaded…
Too, the iPhone is just the tiny first drop of a huge deluge that will be caused by access dongles and netbooks. The situation is pretty clear: network resources are finite; demand upon them is (as good as) infinite.
A message to those folks philosophically opposed to any kind of network management: something’s gotta give. If access remains unrestricted, physics will take over and reduce everyone’s throughput and QoS to a trickle. It’ll be a small comfort to know that the occasional packet you receive is officially “neutral.”
The net neutrality issue as currently framed is a red herring anyway. Subscriber’s don’t care if their bandwidth is restricted, as long as they have control to remove the restriction. The water supply in my sink is restricted, but I can remove that restriction at any time (for a fee) by turning a tap. The more I turn the tap, the more I pay.
And that’s really the key — allocate network resources according to those willing to pay for it. Everyone wins.
Email: chris(at)chrishoover(dot)org
Jason | 13-May-09 at 7:45 pm | Permalink
I don’t really buy into the “network resources are finite” argument.
Mobile phone traffic is a drop in the bucket compared with the bandwidth being used in the home.
Comcast’s tiers run from 12 Mbps up to 50 Mbps. AT&T’s U-Verse tiers run from 1.5 Mbps to 18 Mbps.
If I remember correctly, Time Warner pulled back its plan to expand its trials for limiting the bandwidth cap of its subscribers.
I’m no expert, but a little searching turned up AT&T’s 3G network provides up to 3.6 Mbps now (with the potential to double to 7.2 Mbps). In reality, I imagine the usage pattern is very different on mobile. I doubt there’s a lot of people streaming hi-def TV on their phone (though I believe things like Slingbox may change that).
On the cable end, I believe things like DOCSIS 3.0 may help alleviate bottlenecks (again, not my area of expertise). But, so far, I haven’t seen a convincing argument that the internet’s sky is falling.
Subscribers don’t care if their bandwidth is restricted until normal activities includes things that require higher bandwidth. Several years ago, no one would even think about streaming movies over the internet to their home TVs. Now there’s plenty of people that do it.
Of course, no one would have thought VoIP would have become as popular as it has (Comcast, U-Verse, etc.)
Gone are the days when the only high-traffic users were people downloading illegal music/movies.
Continuing the water supply metaphor…With the state of things today, it’s as if the water company can restric your water supply because it didn’t like how much water you used while watering your lawn.
Anyway…enough rambling.
–Jason
ChrisHoover | 24-May-09 at 9:56 pm | Permalink
You’re right, mobile phone traffic is comparatively nothing. It’s been so for a decade and more, which is why flat rate pricing is ubiquitous. My argument is that traffic on mobile networks — not just from phones, but from netbooks and similar devices — is going to explode.
To manage the demand, infrastructure investment is vital. It’s happening, too, with LTE announcements happening constantly. That’s great. But it ain’t going to be funded with flat rate pricing. The economics demand that pricing models change, or infrastructure investment slows, or both.
Because it’s hard to change business models quickly, and because the revenue as a function of demand has diminished dramatically in over the past couple years, I’m betting on “both.”
Diminished return on investment means slower investment. Which means slower expansion of infrastructure. With demand continuing to increase, this means mobile bandwidth will emerge as a finite resource.
Which will drive a Darwinian exploration of new business models. The bad news is that some Operators will not emerge as healthy businesses. The good news is that the ones left standing will make a boatload, and I mean a boatload, of money. Or they’ll screw it all up and barely chug along as meaningless bit pipes, relegating all the revenue to the service providers on the edge.
In this context, the water utility analogy doesn’t apply. A better analogy perhaps is FedEx. For a long time (imagine), very few people needed next day delivery service, so FedEx sold it at a flat rate. All you can send, as big a package as you like, as often as you like, for 10 bucks a month. Now imagine that suddenly every business in the world needs FedEx and piles on to the service. Something’s gonna give…