Broadband

Evolution of the Internet too much for ISPs?

With ever increasing demand for bandwidth but no additional income being generated will ISPs survive the digital revolution?

Over the past few years we have seen quite a sudden evolution of the Internet and serious changes to the way people use it. Today's Internet users want to see media rich sites full of downloadable content. Consumer devices and entertainment systems like the Xbox 360 or the Playstation3 use the Internet to deliver new content and download high definition video. Messengers, e-mail, VoIP, and all sorts of other applications are pushing and pulling data over the Internet than ever before. The BBC recently decided to start making its shows available to view online. Using flash video or WMV via a downloadable P2P application viewers can catch up on shows from the last 7 days. I have to say that it's a great idea; it's just so convenient. The BBC has estimated that approximately 17,000,000 programs were watched in January alone.

But it's not all good news; The Register reports that in its first month iPlayer has pushed ISP's costs up 200% from 6.1p per user to 18.3p per user. So far as content delivery goes, this is still early days--those figures are based on an average of 19 minutes per user, which is rather conservative. Bandwidth costs ISP's money--even those with their own networks (as opposed to resellers) need to beef up their infrastructire to support ever increasing throughput. With heavy competition, increasing costs and no additional income, how will ISP's survive?

Obviously somebody has to pay. Can content providers be passed the cost? Are we going to see metering with end users footing the bill? Maybe innovation in networking and data transfer technology simply mean this isn't a problem anymore?

12 comments
NickNielsen
NickNielsen

For some reason, we have come to see low-cost high-speed internet access as a right, but I don't think the current fixed-price subscription model is sustainable over the long term. As costs rise, so will subscription rates. At some point, customers will rebel at the cost of a high-speed connection and start returning to relatively inexpensive dial-up access. I think metered use is the way to go; those who use the most should pay the most. If my internet use habits result in me downloading 1-2 GB average per week, why should I pay the same as the guy whose habits result in him downloading 10-20 GB per week?

CG IT
CG IT

Just read an article on CNet by Erica Off on the Blue Ray format and how their success might be short lived because of consumers seeing the value of digital media and digital media storage vs discs. Music has gone the digital route and so to will video/movie content. This will drive the demand for Fibre Optic service for consumers which will dramatically increase internet speeds over what is available today with DSL/Cable. To read Erica's article see the link below: http://www.news.com/8301-10784_3-9877031-7.html?tag=nefd.pop

cbebop2071
cbebop2071

Things will get better. Blu-ray isn't going anywhere anytime soon, its way too convenient to run to blockbuster and have a quality HD product in 30 min than it is to have plan ahead of time when you want to download something. These HD movies are huge and don't download to quickly. At least with xbox live anyway. I think its a bit premature to start jumping to conclusions since we're gonna foot the bill in the end anyway. Besides, remember what billing was like during the beginning days of dial-up isps...yuck! I really hope it doesn't go back to that.

CG IT
CG IT

I would agree on an ISP service like Cable where your speed is in direct proportion to the # of users and the volume of data users pass back and forth in the pipe. For FiOS service, this wouldn't be the case.

Justin Fielding
Justin Fielding

I think there is still a lot of resistance towards investment in fibre to the doorstep here in the UK. What's the situation in the US right now?

NickNielsen
NickNielsen

I don't like that idea; if I'm paying for a 6 MB connection, I want to get the download speed I'm paying for. I think what we will wind up with is a sliding scale where you pay for a minimum transfer speed and a maximum amount of data; the higher the speed, the higher the data cap. After you reach the maximum data allowance for your plan, the ISP charges a fixed rate per kB/MB for further downloads. That, to me, would be the best of both worlds.

NickNielsen
NickNielsen

Some providers are going all out to provide fiber to individual homes. Others are taking a "wait and see" attitude. And, of course, rural areas and less-populated suburbs are being pretty much ignored. I don't expect FiOS to be available at my house for at least another decade. H3ll, the cable company feed line is still RG-59!

pianoguy
pianoguy

I agree. It's "what you get" (or, rather, "what they'll give you") that is the final determiner of your experience. So, one could wonder if paying for "high speed" internet is worth if it you're throttled at the source. Of course, if you CAN and DO connect to multiple sources, then you're aggregate effective rate is grand. But most of the time I'm pretty one-task oriented, and so why pay for much more than 1.5 Mb/s? (assuming...ahem, they actually GIVE you something close to that) I once tagged a great website that actually metered your actual internet "throughput", but lost track of it. The test page was really a page with embeded links to tons of websites' graphics (CCN logo, etc.), and you could included/exclude international if you wanted to. It really told you how more about your "net browsing speed" than any speed test you can get. I wish I could find it again.

NickNielsen
NickNielsen

The limiting factor on most downloads is [u]not[/u] the home link, but the server link. It all depends on whether the ISP has bandwidth caps in place and what kind of link the server owner has. Many sites only provide transfer speeds of 100-150kbps. I've even run into FTP servers that have the brakes on so hard, the highest speed I ever see is 70-75kbps. I have Ultra DSL at home (6MB minimum). The vast majority of my downloads run between 300-500 kbps. The interesting part of this is that I have had 5-10 downloads from several different servers, all running faster than 300k.

pianoguy
pianoguy

I agree here: I don't want much/month, but I do want it quick (I have small children at home, and my online time is precious). So obviously I don't buy the "high speed= high bandwidth" model. Of course I realize that speed is a function of bandwidth (to the provider), and I'll warrant that lot of folks grabbing small amounts quickly could eat up the real-time bandwidth capacity of the ISP, but still I don't want to have to sacrifice speed just because my aggregate bandwith isn't on par with heavy users. I use an online mail service (not one the biggies) and I have a storage limit and a bandwidth/month limit, and keep things managed accordingly. But then that's email, not active downloading/viewing.) While I do have Comcast now (6 MB with 10 MB powerboost), I've had DSL (~1.5 Mb/s tops) and hardly notice the difference 90% of my online time. But I completely agree that someone/somehow has to pay for this, and I only hope that it's fair for the consumer (oh, how naive I am!).

brian.mills
brian.mills

Right now I have the fastest internet speed Comcast offers in my area, which includes "unlimited" data transfers. I don't know what the real limit is (because they won't ever say) but I'm pretty sure that my surfing habits come nowhere close to hitting the limit. I wouldn't mind having the option to pay less and get a pre-defined transfer cap on my connection, since I'm not a heavy downloader. Just don't take away my speed. If I wanted a slow connection I'd sign up for the $15/month DSL that my dad has. I don't even think it's a full 1Mb/sec. I don't download a lot, but when I do, I want it fast. And would it kill the ISPs to bump up the upload speeds a bit?

CharlieSpencer
CharlieSpencer

Give me either an unlimited fixed rate or a per-megabyte rate, but don't give me an plan like cell phones with their "allowed minutes plus overages".