The Culprits
With the growth of P2P or file-sharing programs, ISP's have begun to notice a huge increase in traffic along there networks, and contrary to belief, bandwidth is not an all you can eat buffet. Streaming media, despite new advances in compression technology still consumes huge amounts of bandwidth, and all of this can have an effect on the quality of service provided.
If we use the idea of a barrel of water representing the total bandwidth that a service provider has, with its customers using cups to draw from this barrel we can hopefully put this into an easy to understand analogy. Each customer draws from this barrel a certain amount of water, and as the barrel is emptied the ISP refills the barrel. ISP's, like any business, have a pre-determined "model" which dictates what the average user will consume from the barrel, so that they can charge the correct price to be competitive with the competition (if any) and make a profit. But as I said before, the demand for bandwidth has increased; with users dipping into the barrel more and more, often faster than the ISP can refill it. There is after all only so much water in the barrel. This has the effect that some users have to "wait in line" for there share, reducing the overall latency of the service, and the amount of bandwidth available to everyone using that barrel. The solution? Get another barrel. This is fine but it costs money to do so. Not a problem you say, since there's obviously demand, which is the driving force of any business. But what if the cost of the barrels no longer fits in with the original business model? This is of course only for those ISP's who are buying there bandwidth from the Telco's, since the cost of unbundling the local loop can be as expensive if not more so than the connection from across the country.
If say ACME Inc Internet, who buy there bandwidth from Billy Bob's Telecoms, has a business model of Joe Average consuming 100 cups of water a month (give or take, everyone is individual with there own needs and uses for the water in the barrel. This is factored into the business model, knowing that some will use more, some will use less, but as long as the overall average is maintained a profit and sustainable service can be to) they will base there pricing accordingly. But then all of a sudden, streaming media and P2P takes of in a big way with Joe Average drawing more and more from the barrel. Suddenly the business model based around Joe Average has changed, with the costs being a lot higher in correlation with the needs of the user, since you can no longer have as many consumers on one barrel. Of course the simple thing to do is increase your prices to help pay for the extra barrels now required, but if you do and your competitors don't, you're going to lose customers to the opposition. Not to mention those potential customers who will decide that it is just to expensive now to warrant getting, or existing customers who can no longer afford the service. Of course you could always ration how much water Joe Average can use ......
Next Page - Break out the Rations
Break out the Bandwidth Rations: Bandwidth Capping: A Necessary Evil? With more and more ISP's thinking about limiting your overall total bandwidth consumption, we discuss if this is the right way to go about cutting costs and maintaining a high level of quality service.
