Consumers are using the internet for an ever-increasing range of activities. This has meant that home internet data usage has also increased at a rapid pace. Unfortunately, most home internet connections these days are limited by usage caps. The customers are given a basic allotment of data usage, with any usage over that amount subject to additional charges at exorbitant “overage fee” rates. So while these plans my not technically be capped, the practical usage of them means that customers are limited to the original usage allotment of their plan.
The following is an explanation of the reason given for these restrictions being placed on customers, how they are wrong, improvements that need to be made.
The standard explanation given by internet service providers (both wireless and broadband) is that the increased cost of “excessive” data usage is to dissuade such usage which is claimed to place excessive strain on the network. By making sure the network isn’t congested the provider claims to be able to provide a more reliable experience for all their customers.
Unfortunately, there are some serious flaws in this argument. To understand these issues, one has to first understand a bit more about these networks and peoples use of them.
The standard home cable internet connection also shares a physical connection to your house with the cable TV connection. The modern cable TV connection is actually just another form of digital network connection to your home. The only practical difference between the Cable connection and your home internet connection is the one connects users to a wide range of content in a wide range of formats across a wide range of protocols from around the world, while the other limits your connection to a selection media available on your TV providers intranet.
The problem is that while the cable TV and internet connections are similar in many ways, their pricing structures are completely different. When it comes to cable TV connections there are no restrictions on usage. Customers are able to watch as much or as little as they want each month with no change in the cost.
With both TV and internet services making use of the same connection to the ISP’s central office the limitations on one connection and not the other means that these restrictions are really not there to solve a technical problem, but a competitive one.
In 2015 Netflix accounted for 37% of network traffic during peak periods in North America. YouTube came in second place accounting for nearly 16% of peak time traffic. Together these two sites make up over half of the peak traffic on the internet in North America. Video streaming services like Netflix and YouTube (along with the likes of HBO Now and Amazon Instant Video) not only make up a significant portion of web traffic, but are also the closest competition to cable internet ISP’s traditional TV service.
In the case of these streaming services, users access these services through the internet connection from their ISP (who is also the Cable TV provider). This situation presents a very clear conflict of interest. It is in the cable companies best interest to make it as hard as possible for people to make use of their competitions video services so that customers chose their cable TV packages instead. In a situation like this where the cable companies control their competitions access to users there is little incentive to play fair.
Fundamental to finding a solution to this issue is understanding where the network bottleneck actually is. In the case of home internet connections, just as with wireless networks, the bottleneck of the system is not the exchanges between the ISP and the backbone of the wider internet, but the connection between the ISP central office and the user consuming the content. With a cable internet connection users are sharing the connection to the central office, just like with wireless users sharing access to a tower.
With little hope for serious competition to the traditional ISP monopoly on physical connection to the home, compounded by their ownership of media companies, the only solution to providing a fair access to alternative media sources is to force ISPs to play fair.
The simplest way of achieving this is to force cable companies to tie the pricing structure of their TV offerings to that of their internet offerings. If ISPs truly believe that network congestion along the “last mile” is serious enough that it warrants restrictions to users usage, then the policy should have to apply to TV services that also make use of the same last mile connection. Cable TV customers would likely not be pleased with having their TV connection metred in a similar manner to how internet customers streaming video are. Just imagine Cable TV customers having to live with usage based billing.
What ISPs are doing right now is forcing their competition to fight for artificially limited resources while exempting their own video streaming service from usage limitations. By putting all the video streaming services on the same playing field customers will be able to evaluate the merits of the content and delivery format rather than constantly being worried about their usage of the respective services. With these restrictions internet customers might finally see some equality in an extremely uncompetitive content delivery market.
