You think we have it bad here in Australia? Check this out. ISPs in the US are able to limit or cut off internet access for "overuse". We won't get to the heart of this matter until people start asking the right questions. here's a summary of the key issues.
I'm also going to include a few questions that will make any broadband provider squirm - because, frankly, there aren't good answers.
It's my hope that all of you (including the press and politicians) will use these questions as a bit of a crib sheet, and challenge broadband providers when they duck answering them. It's time to let consumers, press and politicians continue this debate. And as much as my experience here has put a face on this issue, it isn't about me - so I will purposely be stepping back a bit to let the real issues take centre stage.
So what is the key issue?
Data caps are arbitrary and harm consumers by stifling innovation and choice.
Depending on the broadband provider, a data cap might cause a consumer's service to be throttled or perhaps be subject to surcharges for use over a certain limit. However, some ISPs actually cut service completely when a user exceeds their cap. As an example, let's look at Comcast's data cap (or "data cutoff".)
In 2008, Comcast drew an explicit distinction between throttling designed to ease network congestion and data caps designed to punish "excessive" users. It is unclear why excessive data use that does not cause network congestion matters to Comcast. It is further unclear how Comcast determined that 250 GB was "excessive" in 2008, and why it has not revised that level in the years since.
In fact, Comcast appears to now be contradicting statements it made to the FCC in the past about its data cap. In 2008, Comcast went to some pains to draw a distinction between congestion management practices such as peak time throttling and "excessive use" policies like data caps:
"These congestion management practices [such as throttling]are independent of, and should not be confused with, our recent announcement that we will amend the ‘excessive use' portion of our Acceptable Use Policy, effective October 1, 2008, to establish a specific monthly data usage threshold of 250 GB per account for all residential HIS customers. … That cap does not address the issue of network congestion, which results from traffic levels that vary from minute to minute."
Yesterday, a Comcast spokesman exhibited just that confusion in defending Comcast's actions by confidently stating "If someone's behaviour is such that it degrades the quality of service for others nearby – that's what this threshold is meant to address."
As Comcast recognised in 2008, but appears to have forgotten recently, data caps are a poor way to deal with network congestion. Uploading 250 GB of data between midnight and 6 am over the course of a month should not strain a network. However, it could trigger the cap.
We live in a world where new streaming solutions are beginning to encroach on existing television distribution businesses. Netflix, YouTube and Hulu are all the tip of the iceberg in the "cut the cable" movement. To quote The Economist:
Regardless of providers' public pronouncements, the root of the problem is internet video. Live streaming television, advertising-backed programmes from networks and Hulu, legal downloadable nuggets of episodes or complete movies (both paid and free), or pirated peer-to-peer files are all becoming alternatives to channel-based, real-time delivery of television over a wire to the home. Caps are a last-ditch effort to preserve a fusty model with artificial limits that resemble broadcast TV.
The use of caps allows providers to dish out bandwidth with one hand and take it away with the other. The companies have vastly increased the capacity of various copper, coaxial and fibre lines, but artificially separate out a portion-at least half and often much more-for video which a set-top box or a broadband modem spits out as an apparently distinct service. Cable firms simultaneously push out hundreds of digital channels, while telecoms firms rely on multiple digital streams from live broadcast or cable TV or on-demand pay-per-view. It is as though the water main were divided as it entered the home and a steady, modest stream was made available for showers and at the tap, while most of it was always at the ready for a coin-operated washing machine.
The Economist goes on to say that increasing speed on the internet portion, which would allow a consumer to use these new streaming services, is balanced by the provider by capping the volume of data that can be consumed. Put another way, if a consumer doesn't monitor their usage, his or her internet access might be cut off or overage fees charged - both of which discourage use of these new streaming services.
Let's pause and think about that water line analogy a bit more. Broadband providers typically install a single "pipe" to your house, and then split that pipe up into sections to handle services they sell you. One chunk is dedicated to the bandwidth necessary to deliver television; the other broadband. I can't find numbers estimating how much bandwidth an hour of HD broadband television consumes. However, I have found that streaming a Netflix HD movie consumes somewhere from 1GB to 1.5GB of data an hour. That probably low for an HD cable television stream, but is still a useful conservative point to base some calculations from.
So here's the rub. One pipe coming into the house is segmented into two different offerings with different rules and costs. If I download over 250GB of data over my broadband connection (in Comcast's case) I exceed their data cap limit and am cut off. On the other hand, if I turned on a broadband provider's HD television station and left it on 24 hours a day for a month I would have consumed at least 720 GB of data (30 days x 24 x 1 GB/hour), or maybe even over a terabyte of data (at 1.5 GB/hour of data)- on precisely the same pipe. And I guarantee you I would not get a warning call or be cut off for "watching too much television" - just imagine the furor that would ensue if ISPs started doing that!
Beyond being arbitrary, data caps also harm consumers by stifling innovation and choice.
The internet continues to evolve in new and exciting ways that we can't predict. It wasn't that long ago that streaming video was more of a curiosity than a useful technology that we now use daily. Innovative cloud-based service offerings such as backup services (Carbonite, Mozy), video game playing (OnLive, Gaikai), streaming video (Netflix, Vudu), and streaming music (Amazon's Cloud Player, Spotify) have all come into being in recent years and show significant customer demand. Yet all of these potential consumer choices are threatened by data caps.
Some might go away because consumers won't find the offers as compelling as they might have previously. What's the point of a cloud-based music service if you can't play all of your music? Or why pay a company to back up all of your precious data to the cloud if you can't reliably get it to the cloud in the first place? Heck, why buy Google's Chromebook at all? Remember, it requires a net connection to set up and use to its greatest potential.
What's even more worrisome is to imagine what other innovative services might never come into being. What's the next OnLive, or Carbonite, or Dropbox? And what happens if the next one is in the mind of some college student who can't get funding from a VC because the idea just doesn't work within a data-capped world? To put it another way, how many VCs would turn away from an OnLive-like idea that was pitched to them today because of uncertainty around data caps?
This issue affects us all, and it's my hope that people will rally and start asking the hard questions of their ISPs and politicians. I also hope that the press will look at some of these hard questions and demand answers… and just as importantly, ignore non-answers.
So with that in mind, here are some hard questions for ISPs around data caps. Cut and paste them in mails, or send them to your ISP directly. Print them out and include them with your cable bill. I guarantee you each will make them squirm.
Hard Questions for Broadband ISPs around Data Caps
1. Is your bandwidth data cap designed to protect your television distribution business? If not, why do you insist on completely cutting off data instead of using other more consumer-friendly options such as charging for overages or slowing internet use?
2. What ISP-offered services are excluded from the cap? Specifically, are your voice telephony and video programming services excluded? If so, why doesn't your data cap apply to data consumed when watching television or making a phone call?
3. How are your data caps set? What data informed that decision? Why do different ISPs have different data caps when using similar networks and distribution technology?
4. How are your data caps evaluated on an ongoing basis? What customer input do you seek? What are the conditions under which those caps could be raised and/or eliminated?
5. Do you practice selective enforcement of data caps? (Many ISP users report being over their supposed limits for months in a row without action.)
I would love to see each major ISP in the US release a letter responding to the questions above, and engage in a meaningful debate with their customers and policy makers. But I doubt they will. At the end of the day, most broadband ISPs (especially those also in the business of distributing television) have no way to answer the above questions without being evasive and very obviously dodging the subject. But people will know… and over time, one hopes policies will change.
Thank you for reading - now go forth and question!
For further background,. I'd suggest you read the first, the second, a wrap-up with tough questions for ISPs, and then press coverage in that order.
Andre Vrignaud has worked in the interactive entertainment industry for over 20 years at companies such as Intel, Microsoft Xbox and Amazon. He currently works as an independent game industry consultant doing game, platform strategy and media/PR consulting for a variety of firms.
This article originally ran on July 19, 2011. Republished with permission.