ISP perspective #1: Motels and Traffic Patterns.

This post was inspired in the news that some Japanese ISPs where blocking users suspected of sharing files using p2p.

I have an ISP, started 12 years ago with a 64Kbps internet link, and that was enough for my 300 customers in the first year, now I have 13.000 customers, and a 240Mbps link.

What changed in the meantime?

  • Subscription prices kept almost the same per customer – OK
  • I get bandwidth at lower costs per Megabit- OK
  • The way people use internet changed, a lot! – That’s NOT OK.

Now that’s when p2p kicks in, because it is by far the most resource consuming technology, either bandwidth, IO, memory or CPU. Do you want proof? Try to find any serious gamer who would leave an unrestricted p2p transfer of a popular file while playing. No one is crazy to do that because even if you have the best connection and the best computer you can make it unusable for games in just a few minutes using p2p.

Besides p2p, Youtube also deserves a mention as video is becoming more and more popular and the ratio of online users watching videos today is far bigger than it was a few years ago.

Now that I made my point about what changed in the user habits, let’s see how it affected ISPs :

An ISP is an All You Can Eat Buffet

Imagine you have an average consuption per customer, let’s say between 1 and 2 pounds, and in a few years 30% of your customers eat 20 times more at each meal. This breaks the equation, but still It’s a problem between the restaurant and It’s customers: he’ll have to buy a lot more food to keep the business running, but his suppliers won’t give him anything more than the usual discount for a volume purchase, and that’s not enough to keep the business going.

My average customer at transfers about 2GigaBytes/month. A torrent user transfers 150GigaBytes in the same period, and could easily get close to the TeraByte Mark.

Sooner or later you have to pay big bucks

This week I read a twitter post from TWIT’s host Leo Laporte: “Just ordered a T1 from Covad (1.536Mb up and down) for $379/month with 2 year contract. We’ll use it for streaming video for TWiT Live”. Now tell me, why is he paying all this when he can get 3Mbps DSL for $30? It’s because besides the reliability of the T1, the T1s bandwidth is priced expecting that you’ll have a lot of traffic, and DSL is priced based on old Dial-Up end-user traffic patterns.

No matter what ISP, small or Big, one time or another it will have to pay big bucks for his connections to get to the backbone out town/state/country. These connections cost a lot – either land fiber, oceanic fiber or satellite. In the US, Japan and some Europe countries it is easier because big ISPs can exchange traffic among themselves at relatively no cost in Internet Exchange Point, wich is just a room with a big switch where every ISP connected can exchange traffic saving the pipe they have to the rest of the internet. IXPs:

So I think this is what most ISPs are trying to fight: the bandwidth consumption, they don’t care about piracy at all. This is because the price is being charged the wrong way so people who transfer almost nothing pay for the bandwidth of the ones who transfer a lot. It’s a huge misconception that happens when people sign for a “fast” internet connection. Everybody gets the picture of a Ferrari in their heads when they should be thinking about a huge Caterpillar truck. Internet connection is about volume, not speed, and that’s why It’s being charged the wrong way, because the marketing department is selling speed and not mentioning volume at any time. I see that the same error is not being made in the 3G networks, all of them have monthly transfers restrictions.

The ISP is like a Motel

The ISP is like a Motel owner: if a couple that rents a room is committing adultery, that’s not the motel’s problem, this is between the man/woman and his wife/husband :)

PS: Following this post I’ll discuss how the general idea of Internet Speed gives wrong expectations to end-users

Add comment April 4th, 2008

Recent Comments

Recent Posts

Recent Trackbacks