by Brian Boyko
Editor, Network Performance Daily

Time Warner Cable has rolled out its plan to cap the data of high-speed Internet subscribers in Beaumont, Texas, a town about 20 miles west of the Louisiana border.

The plans include $29.95/mo for 768kb/s downstream and a 5GB monthly cap - or $54.90/mo at 15Mb/s and 40GB monthly cap - with $1 additional charge for each GB above the cap. 

For comparison, the same service in Austin is $29.95/mo for 768kb/s downstream with no cap, or $59.95 (or $5.05 more) for 15Mb/s downstream with no cap. Here's Ars Technica quoting Kevin Leddy:   

Kevin Leddy, Time Warner Cable executive vice president of advanced technology, told the Associated Press that the variable billing model is being adopted to address the disparity in bandwidth consumption among Time Warner Cable users. Five percent of the subscribers are consuming half of the local line capacity, Leddy says.

Yes, the old "X% of users are using X% of bandwidth" argument, with an implication that those top 5% are hurting the ISP’s network performance.

I think by now we can shoot this out of the sky - not that there aren't bandwidth hogs, but mentioning that the top 5% of users are consuming 50% of the bandwidth is pretty much saying: "Apparently, Internet usage follows a power law curve." 

The Power Law Curve, or "Pareto Principle," or "80/20 rule," is part of the Internet.  Roughly 20% of people who participate on Forum X will leave 80% of the comments, roughly 20% of the gamers on World of Warcraft will log 80% of the game hours, and there's been an entire philosophy of thought called "The Long Tail" about how the power log curve affects many aspects of Internet business.  Business, by the way, has known about the 80/20 rule for a long time - which is why 20% of a supermarket's products will result in 80% of it's sales, or in a small business, why 20% of customers will provide 80% of the revenue.

So let's put this old argument to bed - 5% of the users will consume 50% of the capacity.  If you removed those 5% of the customers from the pool, chances are that the new top 5% - or what used to be the second 5% - will now consume roughly 50% of the capacity! 

Of course, this doesn’t stop Time Warner from offering 15Mb download speeds to customers who pay for the service. You’d think that if Time Warner was really concerned about network congestion, that they would scale down the bandwidth that they offer, rather than the data that people download.  Because data – data is an infinite resource.  There’s no limit to the number of bytes out there that you can download.  What is a limited resource is bandwidth – that is, the amount of data traveling along the same pipe at the same time.  And caps simply don’t help with that. 

Whatever Time Warner’s actual rationale, it has absolutely nothing to do with network performance.  (Which is why you’re finding this discussed on Network Performance Daily.  I know.  Irony can be so ironic sometimes.)

Instead, and this is a wild guess, I think that Time Warner wants bandwidth caps because it is working to preserve an old social order upon which the Time Warner enterprise is built, all while being pressured by the new social order that is emerging. 

The Boredom Killing Machine

Do cable companies with caps establish them with the express hope that those heavy-usage customers will move to other services, removing the need for them to spend money on upgrading their infrastructure?  Well, this is practically axiomatic: by removing those customers that are least profitable, they make more money.  What about the idea of anti-competitive behavior – as services like Hulu, NetFlix, AppleTV, and others use the Internet to deliver video-on-demand? I could understand a cable company being nervous about that. 

But there's more to it than that, and to dismiss this as merely the work of the “evil cable company” is to dismiss the bigger picture and ignore something more fundamental.

There is an entire paradigm shift that is occurring with the rise of broadband, and to understand it, we have to go back seventy years. 

In the 1938, the Fair Labor Standards Act was passed.  This act provided for the federal minimum wage, but what we want to look at is that it also established the standard of the 40 hour work week.

There were a number of changes that occurred because of that 40 hour work week.  Workers had something they never had before – an abundance of free time.  And for the most part, they didn’t know what to do with it. 

Similarly, trends towards suburbanization continued – helped by FHA loans and other programs, but also, a move to the suburbs required an increase in commuting time.  You could live near where you worked, but it was cheaper to live in the suburbs.  It meant you spent more time driving to and from work, but because of the 40 hour work week, people had more time than they had money. 

Additionally, Robert Putnam noticed in his book, “Bowling Alone,” that while his main thesis was that, past 1965, Americans were spending less time together engaged in group activities, from post WWII to around 1965, public participation in groups waxed.  But, starting in 1965, it declined sharply.

1965 was also the year when television reached 90% household penetration in America.

People spent more time in group activities before 1965 because – well, there was nothing else to do with the free time that they had been given.  (Yes, this is a simplification, but this is a relatively short article.)  And people spent less time in group activities after 1965 because they finally found a way to get rid of all that excess free time. 

The television. 

The television is not primarily a communication device – it only broadcasts one way.  I think an argument can be made that it is not an educational device. 

The television is a free-time killing machine.  It eliminates boredom.  It simply gives people the ability to shed themselves of the excess free time which was previously impossible. 

The Fertile Soil of the Suburban Mind

The 40-hour work week, suburbia and television are all related trends.

Now, the 40-hour work week, suburbia, and television, are all changing, for related reasons. 

According to the Los Angeles Times, 40% of America works 50 hours or more each week.  There’s also been a trend towards “re-urbanization,” due to desires to have shorter commute times, fewer gas bills, and a realization among young professionals that the social scene is better in the cities than out in the suburbs.  More free time and better ways to spend it.  But not all of us live in the cities - yet. 

The real threat to television that the Internet poses is not that you can watch the same shows on the computer that you could on the TV.  It is because the Internet was able to get people with varied and disparate interests to communicate and to organize.

When people who don’t participate in the Internet ask: "Where do people get the free time to create YouTube videos, or the free time to edit Wikipedia into a massive resource, or to spend hours on Slashdot replying to comments with jokes about Soviet Russia, or time to organize a protest complete with "V" masks?” - that free time is coming from the time once killed in front of the tube.

In other words, people are watching TV less - and when they do watch TV, it's usually a conscious choice to watch a particular TV show rather than a result of a lifetime habit of zoning out in front of the TV and watching "whatever's on."  Indeed, PVRs and TV-on-DVD are markets which evolved specifically to take advantage of this niche.  You can talk about the "convenience" of time-shifting, but the true effect that TiVo has had on American TV is that people don't have to watch crap unless they want to.

Clay Shirky, who gets credit for espousing these ideas in the first place, said:

"Desperate Housewives essentially functioned as a kind of cognitive heat sink, dissipating thinking that might otherwise have built up and caused society to overheat.

And it's only now, as we're waking up from that collective bender, that we're starting to see the cognitive surplus as an asset rather than as a crisis. We're seeing things being designed to take advantage of that surplus, to deploy it in ways more engaging than just having a TV in everybody's basement....

...So how big is that surplus? So if you take Wikipedia as a kind of unit, all of Wikipedia, the whole project--every page, every edit, every talk page, every line of code, in every language that Wikipedia exists in--that represents something like the cumulation of 100 million hours of human thought. I worked this out with Martin Wattenberg at IBM; it's a back-of-the-envelope calculation, but it's the right order of magnitude, about 100 million hours of thought.

And television watching? Two hundred billion hours, in the U.S. alone, every year. Put another way, now that we have a unit, that's 2,000 Wikipedia projects a year spent watching television. Or put still another way, in the U.S., we spend 100 million hours every weekend, just watching the ads. This is a pretty big surplus. People asking, "Where do they find the time?" when they're looking at things like Wikipedia don't understand how tiny that entire project is, as a carve-out of this asset that's finally being dragged into what Tim calls an architecture of participation."

So, what is the use of a bandwidth cap?  A bandwidth cap limits the amount of free time that can be spent on the Internet, leaving people once again, with a surplus of free time. 

Free Time, by Hook or by Crook.

I did some math here – remember, lowercase "b" represents "bits", uppercase "B" represents "bytes."

Here’s Time Warner’s “low-end” Beaumont plan.  
$29.95/mo at 768kb/s and 5GB monthly cap.

768kb/s = 96kB/s
96kB/s = 0.09375MB/s
0.09375MB/s = 0.000091552734375 GB/s
5GB / (0.000091552734375 GB/s)=
54613.33(repeating) seconds. =
910.22(repeating) minutes =
15.1703703(repeating) hours.

On the low-end plan, you have 15.1 hours of using your Internet connection to its fullest potential, before you hit the cap. (And you incur an additional dollar of bandwidth cost every additional 3 hours, 2 minutes.)

Now, here’s the “high-end” Beaumont plan.
$54.90/mo at 15Mb/s and 40GB monthly cap.

15Mb/s = 1.875MB/s
1.874MB/s = 0.0018310546875 GB/s
40GB / (0.0018310546875 GB/s) =
21845.33(repeating) seconds
364.088(repeating) minutes
6.06814814 (repeating) hours.

On the high-end plan, the "turbo" plan, you have 6.07 hours of using your Internet connection to its fullest potential before you hit the cap. (And you incur an additional dollar of bandwidth cost every additional 9 minutes, 6 seconds.)

By limiting the amount of data that can be downloaded, what caps really do is limit the amount of time, and therefore cognitive capital that one can spend on either the Internet or on "real world" activities enhanced or facilitated by the Internet. 

If you can't use the Internet, after all, because you've either gone over your bandwidth cap or you're afraid of going over your bandwidth cap, what are you going to do?  For most people, the answer will probably be "watch TV." 

And most cable providers are vertically integrated – Time Warner also owns numerous other interests, many of which are dependent on you sitting down in front of a television, including HBO and HBO Films, Adult Swim, Cartoon Network, Boomerang, truTV, TBS, CNN, TBS, TNT, a slew of production companies for TV, and a slew of production companies through Warner Bros. 

Television production companies are going to be faced with a dilemma as the boomers die and the millennials take charge: A population that won’t bother with watching the crap.  This will force production values up.  Additionally, with fewer and fewer viewers during fewer and fewer hours, broadcasters can demand less from advertisers.  Will this kill television?  No.  But the television industry is built almost entirely on the idea that people will watch because they have nothing better to do.

Now, people have something better to do.

After the Shift

Human beings are creatures of habit.  The baby boomers are much less likely to use the Internet to create, to organize, or to participate – they’re much more likely to simply use the Internet as a passive, one-way conduit of information, where you read, listen, or watch.  The younger generations are much more likely to use the Internet to converse – to engage, to participate, to do.

The “5%” that’s often touted out aren’t just the most savvy.  They are early adopters.  They are pioneers of a way of life that future generations will see as routine.  Eventually, that 5% will grow into 10%, then 20% - until we can’t think of a way of life without broadband.  (Some of us already can’t!)

Instituting bandwidth caps probably will not work in the long run – it is “stuffing the genie back into the bottle,” or “fighting the tide of history,” or whatever cliché you want to assign to it.  It is a desperation move.