Average American Consumes 34 Gigs Of Data Per Day; Good Thing ISPs Want To Limit You To 5 Gigs/Month

from the unworkable dept

There's a new study that's making the rounds, noting that the average American consumes about 34 gigs worth of data/information each day. That number has been increasing at a pretty fast pace as well. This is, obviously, not just internet data. It includes TV, radio, mobile phones, newspapers, video games, etc. However, what struck me is that more and more of that is moving to the internet, and that seems like a trend that will continue. And, yet, we still hear stories of ISPs looking to put in place broadband caps that are as low as 5 gigs per month. Clearly, something has to give. Even Comcast's relatively generous cap of 250 gigs per month could run into trouble at some point as well.

And, indeed, this is part of what concerns me most about efforts to put in place broadband caps. As we consume more data and a growing amount of that data consumption moves to the internet, more and more people may find themselves butting up against those caps. Even though plenty of studies (and many comments from the technology -- not policy or marketing -- people at ISPs) show that ISPs can easily invest in infrastructure upgrades to keep pace with the traffic, the move to put in place broadband caps may create serious unintended consequences for broadband. They add a mental transaction cost to any kind of internet usage (you have to think if it's worth it) and limit the interest and/or ability to build newer, more powerful internet applications and services that can serve what we need.


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    Brian (profile), Dec 10th, 2009 @ 1:54pm

    Well from what I gathered by reading different articles on this that 34 Gigs includes all types of information and data such as television, radio, newspaper, etc. which makes sense and its more than just internet data.

     

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    Brian (profile), Dec 10th, 2009 @ 2:04pm

    Re:

    Guess I missed parts of this post already mentioning it was all types of data >.

     

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    Anonymous Coward, Dec 10th, 2009 @ 2:21pm

    Consumers --> consumes (title), months --> month (Comcast's limit).

     

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    Anonymous Coward, Dec 10th, 2009 @ 2:22pm

    The problem in the U.S. is simple, a government enforced lack of competition. That's why cable and just about everything in this country is only available at monopoly prices. A lack of competition leads to less aggregate output (ie: less data and bandwidth) at a higher price and the telcos/cablecos are lobbying for the ability to further exploit the public with their stolen monopolies.

     

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    scarr (profile), Dec 10th, 2009 @ 2:42pm

    Keep in mind, that number is for an average American, not tech-savvy folks.

    I wonder what metrics they used. An hour of HD TV is only a couple gigs. Radio-quality MP3's would be less than a gig for an entire day. Newspaper is on the order of megabytes. The numbers seem strange at first glance.

     

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    Anonymous Coward, Dec 10th, 2009 @ 3:07pm

    Re: Re:

    Actually Brian, it is very important, and a clear explaination of why broadcast mediums are still very important.

    Out of that 34 gig, with 5 hours plus of TV and 2 hours plus of radio, the vast majority of the 34 gigs is SHARED bandwidth. There is no additional infrastructure required to add 1 more TV viewer. In techdirt terms, broadcast is nearly infinite, as the marginal costs for adding new viewers is ZERO.

    Moving them online and turning them into individual streams of individual programs at individual times would pretty much murder the current internet infrastructure, and require that the overall system (including the all important last mile) increased by a dramatic factor, just to be able to allow the consumers to get all this "stuff".

    So basically, the internet is still the skinny straw, and all the trying to stuff extra material down it that doesn't belong there isn't going to work.

     

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    Yano (profile), Dec 10th, 2009 @ 3:12pm

    with the current buzz-phrase being "the cloud" and everything moving there, Apple seems to move the iTunes consumption there and with the GOOG's massive cloud services and infrastructure and the way it's integrated with out daily lifes and will surly become even more integrated and dominate.
    Mozilla CEO said at their mobile browser launch that he expects in 3 years 80% of apps will be internet apps, MSFT will launch their azure platform early next year this talk about traffic caps specially 5GB caps doesn't seem realistic.

     

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    hegemon13, Dec 10th, 2009 @ 3:12pm

    Re:

    I agree. Video is definitely the largest portion, and at the average 5 hours a day(!? - people on average watch THAT MUCH TV? Good lord...), that's only about 10-12 GB. Where do the other 20+ GB come from?

     

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    Anonymous Coward, Dec 10th, 2009 @ 3:12pm

    Re: Re: Re:

    Except over 60% (and rising) of television in this country is delivered via cable.

     

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    Richard Corsale, Dec 10th, 2009 @ 3:17pm

    mmmm not sold

    I read that, I think it's slight of hand though :) 34 Gigs tremendous.

    Did you hear about the man that drown in a brook that was only 6 inches deep on average :)

     

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    tracker1 (profile), Dec 10th, 2009 @ 3:32pm

    Video use...

    1hr of 1080p video on MP4+AVC is usually around 4-5GB for minimal artifacting and loss.. @ 5 hrs, this winds up being closer to 20-25GB, not the 10-12GB suggested above.

     

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    ChurchHatesTucker (profile), Dec 10th, 2009 @ 3:46pm

    Re:

    "Keep in mind, that number is for an average American, not tech-savvy folks."

    I wonder if tech-savvy folks use more or less than the average joe? A few hours of TV is a lot more bandwidth than, say, the same time spent on blogs or Google Wave (assuming anyone knew what to do with Wave.)

     

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    scarr (profile), Dec 10th, 2009 @ 3:47pm

    Re: Video use...

    If you can tell me what TV station broadcasts in 1080p, I'll use your numbers. Blu-ray would definitely bump it up a bit, but not much weighed across the national average.

     

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    Ben (profile), Dec 10th, 2009 @ 3:49pm

    Misleading

    Love your stuff, but this article title is just misleading.

    First it includes obviously things we don't measure in GB (newspapers? seriously?)

    Second, "Keep in mind, that number is for an average American, not tech-savvy folks."

    Average American Consume is just not that tech savvy.

     

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    Trails, Dec 10th, 2009 @ 3:52pm

    Agreed

    I'm stuck with 60 gigs of data a month. I work from home, and game a bit. I don't download movies or music or anything, but lots of voip with screen sharing, general dev work involving a substantial code base, and gaming (left4dead2) have put me near the cap for a while now.

    I may phone up and ask them for more, but it's grief, and I don't need it.

     

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    Mike, Dec 10th, 2009 @ 4:26pm

    Keep Arguing About Angels Dancing On Pins..

    meanwhile, the rest of world continues to make advances that put the USA further behind in competitive terms.

    The trends are clear, more, not less bandwidth is needed by the consuming public as all manner of media moves into the digital cloud.

    If ISPs do not invest heavily in the required infrastructure to keep pace, but instead milk their customers more and more $$ for less and less services (insurance industry's business model), we're toast as a nation.

     

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    Richard Corsale, Dec 10th, 2009 @ 4:40pm

    Re: Misleading

    I read it elsewhere before I read it here. Arstechnica I believe.

    I agree with you 100% though. This (as most blatant propaganda disguised as science) seems as if it's designed for the for the Net Neutrality debate.

    A: NO ONE reads the entire paper, including ad's and inserts. Same goes for a Magazine or a flier some kid put on your windshield.

    B: If the radio is on at your work, or you watch a TV show with your family you simply multiply that actual bandwidth by the number of folks in ear shot of the radio or TV?

    That's blatantly misleading when you're talking about bandwidth. This "study" is crap. I imagine that the people who were writing it were holding their noses as they were typing.

     

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    Justin, Dec 10th, 2009 @ 4:47pm

    Averages

    See the funny thing about averages is that not many people actually use the "average" amount, the actual users are dispersed in many places in the range, but mostly towards the polar ends. In that regard, some people just use a ridiculous amount of data and others don't so the average is much higher than what is typical.

    So trying to find the summation of services that add up to this number is useless as most people don't use that amount per day. It would be interesting to see who uses the most and for what though.

     

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    Anonymous Coward, Dec 10th, 2009 @ 4:53pm

    720p

    for 720p depending on the audio quality and the video codec used 1 hour will be between 9 & 30 gig.
    I personally must have dolby or DTS audio and good flicker, artifact free video. Even assuming you geet that at the 9gig per hour rate that is still 27 gig for a 3 hour movie.

     

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    Ryan Diederich, Dec 10th, 2009 @ 5:00pm

    It doesnt matter what form...

    Mike is telling us about a STUDY (not his own) that shows that americans consume 34 gigs of data per day. This doesnt seem out of the question, as I can easily download 10 gigs a day torrenting, forget reading and using other technologies.

    This comparison is important. Lets say 1/4 of data moves from in your hands to on the web in 10 years. Thats more than 8gb every day! That adds up to over 200gb every month. This is the important point.

    If telcos keep on a 5gb cap, then they will feel no inclination to upgrade their technology. When iTunes and Apple and Azure start up, everyone will need to go over that cap, and they will charge a lot of money and slow the growth of the internet. Then, it will stop when it reaches the physical limit.

    I think there shouldnt be a limit, and if they find a neighborhood has maxed out their system, they should upgrade.

    If I can download 10 gigs in a week at my house, then they should expect everyone else on my street to be doing at least half of that in 5 years (i would consider myself techy)

     

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    Anonymous Coward, Dec 10th, 2009 @ 5:28pm

    Re: Re: Re: Re:

    But it is still delivered as "broadcast", with low marginal costs (especially when you calculate it out in gigs of data moved times number of households served). You can get 4 TV's hooked up, each watching it's own channel, and it doesn't really take anything more than it takes to run one. There is very little increase in cost to the cable company to hook up one more subscriber in their service area.

    A single HD set (5 gigs an hour) multiplied by, say, 500,000 customers... enjoy the math, and figure out how big a connection that would take to run a single hour of TV into every subscriber's home.

    The internet would have to expand multiple times to be able to even hope to offer this sort of bandwidth.

     

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    Daemon_ZOGG (profile), Dec 10th, 2009 @ 7:10pm

    "Average American Consumes 34 Gigs Of Data Per Day"

    34GB.. That's roughly the minimum of my monthly internet usage("excluding" TV and all else). Most of which is Linux & Unix Distributions. Along with all of those wonderful free, opensource apps!
    ;D

     

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    Daemon_ZOGG (profile), Dec 10th, 2009 @ 7:16pm

    5GB Cap?....

    Capped ISPs get kicked to the curb. If they can't provide the advertised bandwidth 24x7, then they won't receive my business... NUFF SAID!
    .....
    ;)

     

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    Godric, Dec 10th, 2009 @ 9:50pm

    Re: 5GB Cap?....

    I'm right there with you...

    I work in the datacenter industry and I see what kinds of bandwidth is available to ATT, Comcast, etc. I get bandwidth for around $2.00/Mbit for my facility. ATT owns their infrastructure and can just give themselves more bandwidth at will and not pay any extra for it. Comcast can have anything it wants cheap. The issue here is that they don't want to.

    This is more corp politics. Someone trying to control something that should be free and open.

    I'm currently in the process of getting a 1GigE connection run to my suburb so that I can offer 100mbit to anyone around my town for $50/month. I am not going to tell anyone how to use the connection nor am I going to care. Not my place to do so. My only job is to provide a service for a price everyone can afford and make it easy to use. I may even offer VOIP for a minimal fee.

    No reason the ISPs cannot do the same. Bandwidth is cheap.

     

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    oh canada, Dec 11th, 2009 @ 2:05am

    why they came at canada so hard

    Sept 2005 - 5.4 million Canadians simultaneously logged onto p2p networks ( thats at any given time in a day )

    4 months later more or less?

    March 2006 - 9.8 million Canadians simultaneously logged into p2p networks

    since then we have been throttled and or capped ( depending on isp ) ad we still prevail

     

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    Hephaestus (profile), Dec 11th, 2009 @ 7:02am

    To funny look ....

    Look at the sponsors of the report all the companies that have a vested interest in selling more routers, network cards, or wanting to limit bandwidth (ie ATT) to people. This seems to be yet corporate sponsored press release that was picked up by the NY times. The report is about data usage and using it to estimate cable usage is like comparing apple to orages.

     

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    nasch (profile), Dec 11th, 2009 @ 8:11am

    Re: Re: Video use...

    Isn't OTA HD in 1080p? I'm pretty sure my satellite signal is 1080i, but I don't know how much bandwidth difference that makes. I don't know, I'm still waiting for 1,000,080p.

     

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    Lobo Santo's Ugly Cat, Dec 11th, 2009 @ 8:45am

    This is a very typical Mike Masnick Techdirt reach sort of a post. It uses poor data, and then tries to slam one of the hated companies with it.

    The reality? Americans don't consumer 34 gigs of data per day. They consumer a very few gigs, and the rest is broadcast.

    The other reality? Americans don't consumer all of their gigs with a mobile or handheld device. Most of them do it over more normal internet connections, including using their handhelds via WiFi rather than the 3G networks.

    So slamming AT&T for having a bandwidth cap at 5 gig and comparing it to an extremely fluffed up number made by combining all sorts of non-network "data" is a joke, a truly misleading post that companies like Sun and Intel should be ashamed to have their names attached to.

     

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    Derek Kerton (profile), Dec 11th, 2009 @ 10:56am

    Re: Re: Re:

    You're spot on.

    First of all 34 Gigs is a ridiculous number, because mixing broadcast and unicast is worse than apples to oranges. And to say that the 34G is also newspaper or mobile phones is also a hand fake. It's F'n TV. To be clear, it's TV TV TV. The average American watches over 4 hours of TV per day. If that broadcast content were counted the same way we count Internet traffic, for the average person it would be basically the whole 34Gigs of monthly use.

    To then take that falsely contrived broadcast statistic and compare it to unicast Internet service is a disingenuous sleight of hand. They are nothing alike.

    Mike argues that much of the TV is shifting to the Interwebs. Well, yeah. And therein lies the problem. That's WHY we're starting to see caps. The ISPs are reacting to the fact that, if marginal costs continue to be falsely represented as zero through "unlimited" plans, consumers WILL shift much of their TV consumption to the series of tubes.

    Why does Mike think that something with real costs should be offered as if it were free? Mike, you wrote, "ISPs can easily invest in infrastructure." Well, yeah. I could "easily" buy a Ferrari. But that wouldn't make it free. The infrastructure costs to support a world where this 34Gigs moved to a unicast Internet model would be astronomical. Some things just belong on broadcast.

    The reality is that caps, tiers, metered broadband all do exactly what economics suggests they should do: they allow businesses and people to make rational decisions about where they choose to invest, spend, and consume scarce resources. Treating scarce resources as if they were free is the real folly.

    Mike, you've argued for years that a metered internet would stifle inflation, because all these very creative dot com ideas could not come to fruition in a world where there was a cost, or a mental transaction cost. Agreed, but I say tough! That's like saying that automobile innovation is stifled by the fact that steel costs money. Juice creativity has been stifled by the fact that fruit isn't free. The fact is, fruit isn't free (EVEN though it grows on trees.)

    Input costs SHOULD be considered in any output. Why does economics always fall off the wagon with you on this? It seems you are more motivated to artificially foster web innovation than to respect the steady laws of economics. I know, you'd like more innovation; I'd like more innovation, too. Economics doesn't care. You can't wish away real variable costs. More interwebs cost more money.

    The fact that people may be forced to limit their Internet TV is not an "unintended consequence". It is a rational decision for them to make. The market is working to suggest to them that broadcast consumption of video is the most efficient method, and is their rational choice. And catching a missed episode of Lost, or a handful of movies via Internet would fit well in the monthly mix, but a full on substitution of Internet for broadcast is wasting resources and that will hit the pocketbook.

     

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    Derek Kerton (profile), Dec 11th, 2009 @ 11:18am

    Re: Re:

    Really? A DVD is 5Gigs, but it doesn't even have the capacity to store an HD movie.

    So, let's say you watch 5 movies a month @ 5Gig each. There's 25Gigs right there.


    FYI
    Good quality data rates (all approximate):
    480i MPEG-2 uses from 4 to 6Mbps
    720p HD MPEG-2 uses 12 to 15Mbps
    1080i MPEG-2 can use up to 28Mbps

    If you used MPEG-4, then you would need only about 70% of those throughputs. Cable companies use a standard based on MPEG-2, but the Internet could use the most efficient both 2 adn 4 are commonly used on the net.

    The math:
    for one hour of 720p HD MPEG-2 content, we need:
    12Mbps / 8 = 1.5MBps
    1.5MBps * 60s * 60m = 5,400MB = 5.4GiB


    So, at 5.4 Gigs per hour, it doesn't take long to get to the magic 34 Gigs number in this discussion. Make that video MPEG-4, and it still is easy to see how a mix of SD and HD video make up the bulk of that 34 Gigs of information consumption.

    Can everyone now see how this stuff is cheap to broadcast, but gets very expensive in unicast?

     

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    Derek Kerton (profile), Dec 11th, 2009 @ 11:20am

    Re:

    Or, launching a bunch of bandwidth heavy services under the assumption that bandwidth is free doesn't seem realistic.

     

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    Derek Kerton (profile), Dec 11th, 2009 @ 11:22am

    Re: Re: Video use...

    I think that 34 Gigs also includes stuff like Blu-ray movies watched. It seems they are just adding up all the content we watch, and the bandwidth that delivers it.

     

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    Derek Kerton (profile), Dec 11th, 2009 @ 11:23am

    Re: Re: Re:

    sorry, said "month" above, meant "day".

     

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    Derek Kerton (profile), Dec 11th, 2009 @ 11:48am

    Re: Agreed

    So here's a guy who is a heavy user. Earning a living with his consumer broadband line. Heavy screen sharing, VoIP, MMORPG. Maybe downloading distros for his dev work, or some other kind of code base sharing.

    That's all great, and I applaud your ability to be productive, and do so from home. You don't pollute on a commute, don't contribute to rush-hour congestion. It's awesome, and the Internet enables it.

    However, you are the kind of person who is getting a bit of a free ride. You're earning your living off of this pipe, and just paying around $50!! Your neighbors go to work each day, come home to send a few emails and surf a little pron, and pay the same rate as you. I agree that a 60 Gig cap seems a little low. Comcast's 250 seems like a more user-friendly place to start. The US could certainly afford more competition in the ISP space, so we could actually find out what a fair market outcome would be.

    But I don't see you as a victim here. This is an important business expense for you, and it probably costs less than FedExing three packages a month. People don't tell the Gasoline station that having to pump more into your car because they drive more "is grief and they don't need it". No, they pay more...for more. You could take a fraction of the money you save on gas, and direct it to the utility that allows you to commute less. The act of calling them can be done in the time you save by not commuting for one day.

     

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    Derek Kerton (profile), Dec 11th, 2009 @ 11:57am

    Re: Re: 5GB Cap?....

    While I don't agree with you, I think YOU are the answer.

    Competition should be what drives caps upwards...or drives them away. We need more ISPs, more new entrants like you, more ways to access broadband. Only then will we find out what a competitive market resolves for the right price, cap, and bandwidth.

    Because as it stands now, I can argue with the people on the comments here all day long, but we're all blowing smoke. None of really know what the "fair" service levels and prices should be. The ISPs are oligopolists, and thus work inefficiently, lobby gov't, have higher prices and lower supply than in competitive markets. And the consumers always want more, but don't want to pay for it. We have an economic mechanism for determining what is fair: the market. But it requires adequate competition to work. Until then, the ISPs will try to squeeze the customers, and the customers will shout for unlimited free bandwidth. And neither will be correct.

     

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    Anonymous Coward, Dec 11th, 2009 @ 1:03pm

    Re: Re: Re: Re:

    I was going to respond with a semblance of intelligent discourse, but then I realized how idiotic this entire post is. The solution to this huge wall of text:

    Charge more for higher limits.

    Yeah, really. That's it. That's how stupid your entire rant was. Here's the door, now show yourself out.

     

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    Anonymous Coward, Dec 11th, 2009 @ 1:06pm

    Re:

    Failure to read doesn't make you any more correct.

     

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    Derek Kerton (profile), Dec 11th, 2009 @ 2:09pm

    Re: Re: Re: Re: Re:

    Brilliant comment. Thanks for the value add. Good luck forming the "semblance of intelligent discourse" in the future, though I fear you're ill-equipped.

    But to your limited credit, it's true that my fundamental point is a very basic:

    When consuming more of something with real costs, one should pay more.

    Why that simple argument gets so much opposition, and gets people so pissed off, is beyond me.

     

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    Mike Masnick (profile), Dec 11th, 2009 @ 2:17pm

    Re: Re: Re: Re: Re: Re:

    Derek, you and I agree on most things -- but on this one we'll continue to disagree it appears.

    When consuming more of something with real costs, one should pay more.

    It's not that simple. First, I'll note that you (as do the telcos) leave out the corresponding point: when consuming less of something with real costs, one should pay less. And that's because no telco is offering that option.

    Why? Because this isn't about actually charging higher users more, it's about raising prices.

    Why that simple argument gets so much opposition, and gets people so pissed off, is beyond me.

    The issue, I still feel, is a combination of factors. First, not all bandwidth you consume is really up to you. Someone sends you a huge file? Should you be stuck with the bill? Second, it's difficult to judge how much bandwidth you really use.

    But the biggest reason of all is the mental transaction processing costs this creates. Suddenly you have to think much more carefully about what you use, and that's a disincentive to use at all. I think that's dangerous for the internet.

    Plenty of technical studies have shown that there is NOT really a huge problem with overwhelming bandwidth -- and actual bandwidth usage growth has been *slowing* over the past couple years. Metered billing isn't necessary and creates serious mental costs for users that they just don't want.

    On one major point we both agree though: the real problem here is the lack of serious competition in the market. Solve that and I think this whole problem goes away.

     

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    scarr (profile), Dec 13th, 2009 @ 12:31pm

    Re: Re: Re: Video use...

    No, 1080i or 720p. 1080i is half the bandwidth of 1080p, thus why my numbers are halved.

     

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    Derek Kerton (profile), Dec 14th, 2009 @ 3:00pm

    Re: Re: Re: Re: Re: Re: Re:

    "It's not that simple. First, I'll note that you (as do the telcos) leave out the corresponding point: when consuming less of something with real costs, one should pay less. And that's because no telco is offering that option."

    I agree with you entirely on this, and always have. The reason we have this problem is that we lack adequate competition in the US broadband market. That's not the fault of the tool of 'tiered pricing', that's a different problem.

    "Second, it's difficult to judge how much bandwidth you really use."

    I've always said, if carriers want to charge on any kind of a usage basis, they should provide excellent real-time tools to show people how much they've used of their monthly paid bucket. Also, they should send SMS or email when users get close to using their allotment. The fact that carriers (wireless carriers that already have caps) seem to suck at this is a shame on them.

    "dangerous for the internet"

    Sure. Any kind of cost is dangerous for every product. Fuel costs are dangerous for driving. Theater costs are dangerous to theater attendance. Actors high fees are dangerous to theater ticket prices. Input costs, however, do matter. If an input costs affects price such that consumption drops, I only see the natural workings of Supply and Demand.

    "actual bandwidth usage growth has been *slowing* over the past couple years"

    That may be if the data is cut just a certain way. But for last mile consumer Internet use, that idea doesn't even pass the laugh test. Almost every individual you ask can tell you they Tx/Rx more broadband data than they did in the preceding year. I know that we probably shouldn't just trust what the telcos tell us, but basic logic seems to suggest people are using their broadband more and more.

    "not enough competition. Solve that and I think this whole problem goes away."

    True. Because until we have a competitive market (he says hopefully), we will never know the true market rates and service levels that America should be getting today. I speculate that the use of tiers is reasonable and would exist even under competition, you will speculate that a free market would shun measured broadband. Until we get UNE-P back, we'll never know.

     

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    John Miller, Dec 18th, 2010 @ 7:18pm

    Rather misleading post, don't you think?

    I have not researched consumerís data consumption. I have researched consumerís monthly Internet data consumption. Median monthly Internet data usage is approximately 2 - 5 GB and average monthly Internet data usage is approximately 6 - 20 GB. This data is based on information gathered from two large cable companies, two smaller companies and three fixed wireless providers. Usage varies with technology, speeds and location.

    Here are some real-world statistics from a fixed wireless network that I am using to model my fair use policies for my startup WISP. This network has just over 1000 customers. Average data usage per customer is 8.9 GB and median data usage per customer is 2.9 GB. There are about 260 customers (26%) that use less than 1 GB per month. About 790 customers (79%) use less than the 8.9 GB average. The top 20 customers (2%) use almost 28% of the monthly bandwidth. The top 40 customers (4%), the ones that will exceed my Fair Use Policy Threshold, use about 40% of the bandwidth.

    Now why would I, or any other ISP, want to spend huge sums of money to design and run a network for an elite few who have no control over their usage? I can save 40% of my bandwidth costs by controlling 4% of my customers. Even without the bandwidth cost, controlling the few who abuse the network at the expense of many will relieve network congestion and make the majority (96%) of the network customers much happier. Now I know you will talk about how cheap bandwidth is. At my location, it is about 180 Ė 300 miles to any one of five level one providers. This means I pay 3 - 5 times what I would pay for bandwidth in a large city. Transportation is 60% Ė 70% of bandwidth cost. I pay $441.00 per month for 3 Mbps of wholesale bandwidth. That is $147.00 per month per Mbps. When I reach a demand of 100 Mbps my cost will be 30% - 50% of that. Then I must get it to my network and transport it out to the access points, now we have two or three microwave links and four to six towers at a cost of $150,000.00 - $300,000. That is about $4,000.00 per mile for equipment without recurring costs. Few understand the cost of Internet products. The cost from least to most expensive is content, bandwidth and transportation.

    This is why ISPs are finding it necessary to put in place CAPS, FAPS, Fair Use Policies and such. Consumers seem to think that ISPs can provide unlimited usage for the same price. They could before content out-paced infrastructure. How do consumers expect that ISPs will cope with streaming content that will increase their bandwidth needs 10 times during peak usage hours? A fixed wireless network does not even have the technology or spectrum available to handle this. This is why cell providers (mobile wireless provider) have smaller CAPS. The contention-based business model that has allowed consumers to have affordable Internet connections for many years is in grave danger with the increasing amount of streaming content available today. We will not be able to expect dedicated service for the contention-based prices that we have enjoyed for years. Remember I pay at least $45.00 per month per Mbps. Even if a more fortunate ISP pays $10.00 per month per Mbps, how will he sell you a 10/2 connection for $50.00 per month? Contention-based service is how it has always been done.

    With streaming content, every customer can saturate his or her connection during prime time leaving the network crippled. A smart provider plans his networkís bandwidth requirements around peak usage. This means to accommodate streaming content during prime time, the ISP will be paying for about 10 times as much bandwidth as he needs the other twenty hours of the day. And this is only if his network can handle that prime time load. I do not believe any business can take a 10 times increase in the item that makes up the majority of their variable operating expenses and not pass it on to their customers. Letís take a quick look at these numbers. Suppose I have a network that can handle streaming video and I am using 100 Mbps per month. I now need 1 Gbps per month to accommodate most of my customers downloading streaming content during peak usage hours. For me that means, assuming a substantial cost reduction for a higher quantity purchase, my bandwidth cost goes from $4,500.00 per month to $33,000.00. With 750 customers that is $38.00 per customer for streaming content. What if some households have multiple streams? I believe the idea that we will all drop our $80.00 a month cable/satellite bill and use IPTV is not a viable idea.

    Now shared network resources of different technologies have different capacities. That is why we see CAPS that range from 2 GB to 250 GB. Make no mistake with one content providerís streaming content making up 20% of peak Internet traffic now and soon 50%, we will see some method of controlling use, enacted by every single provider in the future. The only thing that will differ is how high, how soon and how much it costs the consumer.

    I choose to enforce thresholds from 10 Ė 50 GB and allow upgrades to plans with higher thresholds or decrease your connection speed for the rest of the billing period and keep your present plan. More expensive business plans will offer thresholds of 150 Ė 300 GB and could serve as entertainment packages too, provided you are willing to pay for a dedicated symmetrical connection. If none of these meets with your approval, you can search for a provider whose resources are less limited and better meets your consumption demands. I do not plan to collect overage charges, as this limitation is not about generating additional revenue. This is about fair use of shared resources and paying your fair share for the use of those resources. It is about preserving the quality of the Internet experience for the majority of the customers who make my existence possible. If I can make 96% of my customers happy then I can stay in business. Granted I would rather it be 98% - 99% but once I put on those customers that consume that much it will have an adverse effect on a large percentage of the rest of the network.

    I know the Internet is changing and ISPs will have to change too. Without fiber or coax few will be able to meet the demands. Iím located in rural American where 35% of us are just getting wireless to replace our dial-up or satellite. We are on the wrong side of the digital divide and will most likely be there for a long time if, not forever. I donít believe rural America can expect fiber for the next fifty years. At $30,000 per mile or more and 5 premises per mile, you donít have to be a rocket scientist to figure out $6,000.00 per premise wonít attract a company looking for ROI. There is simply no way to make those numbers work.

    And yes, the rural/wireless situation is unique. However all that uniqueness does is make the real problem easier to understand. The Internet is not ready for full-blown streaming content. Another competitor will make things even worse and that is bound to happen. Wait and see.

     

    reply to this | link to this | view in thread ]

  43.  
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    drew, Sep 1st, 2011 @ 1:51am

    O_o

    I use over 40gb a day on my personal computer... I blame media-com for my 6,500kbs download speeds >.

     

    reply to this | link to this | view in thread ]

  44.  
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    Sandra, Sep 25th, 2011 @ 9:07pm

    Re: 5GB Cap?....

    I'm with you! If my ISP ever sends me a letter stating I use to much bandwidth, then I will have another ISP by the next business day. I am the boss. They are getting paid to perform a service. If I cannot have my way, I'll go back to dial up.

     

    reply to this | link to this | view in thread ]

  45.  
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    Andy, Dec 26th, 2013 @ 6:59pm

    Re: It doesnt matter what form...

    This guy is WAY off!!! Actually u sound like u have no idea what ur talking about! 34 gigs a day? R u serious r just nuts? The avg US household uses between 20-25 gigs at home n less than 2 gigs on cellular data. I have worked for Verizon for almost 9 years n get statistics regularly. Do ur homework my crazy friend n smoke another one... 34 gigs a day, hahahahaha lol

     

    reply to this | link to this | view in thread ]

  46.  
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    Andy, Dec 26th, 2013 @ 7:15pm

    Just to clarify again, Mike Masnick is full of SH*T!!!! This guys is wayyyyyyy off!!

     

    reply to this | link to this | view in thread ]


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