Counting Bytes and Bandwidth Shifting

Yet another reason to come to the office: bandwidth shifting. Maybe not quite yet, but it is coming.

I am at the office and just downloaded Steve Jobs’s Macworld keynote address; when I work out, I’ll watch it on my iPod Touch (a delight, especially with last week’s software update). Video files are huge and this one clocked in at a hefty 891.8 megabytes. When it comes to size, there is no comparison between video and anything else. So the hour-long Supreme Court oral argument in the Leegin antitrust case—available on iTunes through Oyez—is 14.5 megs. And the written transcript in the Quanta case—on patent exhaustion and first-sale type rights argued in the Supreme Court last week—is only 237 kilobytes.

Last week, Time-Warner announced it is going to experiment with charging customers based on their total bandwidth use. Metering rather than a flat-rate all-you-can eat program of the sort that most of us have at home now. Time-Warner says that 5% of its customers may be using 50% of the bandwidth. The rest of us are subsidizing those customers.

The interesting issue is the way that keeping score interacts with policy, here two issues, network neutrality and Wi-Fi hotspot sharing. Part of the push for non-neutral network rules has been to allow network operators to control bandwidth by preferring one application type over another. This might be done in part because some applications are more bandwidth intensive than others—video vs. audio and audio vs. text files—but direct metering is a better solution to the bandwidth volume problem, as noted last week by Gigi Sohn of Public Knowledge and David Robinson at Ed Felten’s Freedom-to-Tinker blog.

As to Wi-Fi hotspots, is your home Wi-Fi network open or encrypted? Security expert Bruce Schneier explained last week (the original version on Wired and then an update here) that he regards maintaining an open network as “basic politeness” and doesn’t believe that it creates security risks for him. He sees his open network as part of a pay-it-forward approach to making wireless generally available: if he opens his network, others are more likely to do the same, and that will create more freely-available wireless that will work to his and everyone else’s benefit.

From the network operator’s perspective, it doesn’t work to just have one customer on an unlimited usage plan who in turn is sharing her network with all of her neighbors. It is like running an all-you-eat buffet with doggie bags. That is one of the reasons that network operators want to limit this sort of sharing. But if we move towards metering bandwidth use, some of those objections drop as well. If I want to share with my neighbors and am willing to pay for it, great. With nonlinear pricing, of course, there are wrinkles but metered usage will reduce many of network owner’s concerns about private sharing of network resources.

As to bandwidth shifting, once we are all on metered plans at home, how much of our downloading will we do at the office? Will we all turn into bandwidth shifters?

Comments

[Anthony]

When I worked at an ISP several years ago, bandwidth (wholesale) was $10/mbps in not-so-large quantities. If anything, I'm sure it's gone down since then. That comes to 3.2¢/gigabyte of downloads.

Of course, it costs a fair bit to deliver that bandwidth from the core to your home, but a lot of those costs are fixed: maintaining the fiber/copper, etc. So the marginal cost of an extra gigabyte isn't that high.

Assuming pricing per gigabyte of anything near the marginal cost, it's hard to see people shifting their bandwidth demand any more than they shift their drinking water demand.

Lastly, I honestly don't think per-GB pricing is going to happen anyway. I suspect they'll find (again) that the costs of support, accounting, billing, and decreased customer satisfaction far outweigh the per-GB revenue.