While it’s a bit soon to be revisiting Time Warner’s bandwidth caps, there have been a few developments which make this story more interesting and more relevant.
One of the biggest is the idea that Time Warner had tied planned DOCSIS 3.0 upgrades to the incorporation of bandwidth caps – and that, as Austin and Rochester and the other test markets didn’t accept bandwidth caps, TW would not use Austin and Rochester as testbeds for DOCSIS 3.0.
Gizmodo calls TW “bad losers,” but I’m not sure I agree. While congestion isn’t a problem on current connections, a 50Mbps downstream connection might, indeed, result in some congestion if Time Warner doesn’t make infrastructure upgrades. DOCSIS 3.0 may be cheap, but it probably will lead to increased traffic, requiring more bandwidth on the backend.
I am keen to point out, however, that this is because Time Warner is increasing the amount of bandwidth per customer, not because of increased data. So, I can see why they would tie the upgrade to the increased revenue resulting from bandwidth caps.
Just one little problem: At 50Mbps, you blow through 20GB/hr. If you cap data, there’s really no reason to actually go ahead and get faster service.
So, Time Warner is, if you follow the logic here… putting caps on customers… to pay for upgrades… which customers can’t use… because they’ve put caps on customers…
(There’s a hole in the bucket, Time Warner, Time Warner. There’s a hole in the bucket, Time Warner, a hole.)
Saul Hansell from the New York Times pointed out that backbone Internet providers actually refuse to sell by the gigabyte to ISPs like Time Warner (as well as other businesses,) and that the costs are bandwidth, not data, related. It is fair to assume that increasing bandwidth to customers will require increased bandwidth costs.
But the more interesting thing is that Hansell reveals some of the information about what DOCSIS 3.0 actually is:
“But the last link, running from a neighborhood office or a small device hung on a phone pole—runs over cable TV or phone wires. In a cable system, there is a fixed amount of bandwidth that is shared among all the customers in a node, often about 500 homes.
That capacity, in current technology, provides about 38 megabits per second to share. That means if four homes are all downloading very long files at 10 Mbps, a fifth customer going online, will start to slow down everyone’s connections…
…The other way that cable companies are increasing capacity is by using new technology known as Docsis 3. This is a standard that allows companies to use more video channels for Internet service. The current standard uses one video channel. The first generation of Docsis 3 service combines four 38-Mbps channels into a pool of roughly 152 Mbps that can be divided among customers. Cable companies can decide whether to use that capacity to offer higher speeds to customers or to increase the number of customers who can be served at slower speeds, avoiding the need to split nodes.[Emphasis added]”
Here’s where things get tricky; if you’re limited to 38Mbit/s for 500 homes total, isn’t it a bit irresponsible to offer 15Mbit connections to individual houses?
Imagine, if you will, a bank that leveraged 7.5 billion dollars and had 3.8 million in assets. Such a bank would be… well, actually, it’d probably be pretty typical. So forget that metaphor.
But at 152Mbps, the 500 home ratio starts to feel a little roomier. Even if all 500 homes got online at once, you’d still get 311kbps; or 38kB/s.
Hansell points out that it could get even roomier:
“But most cable systems are in the process of converting to an all-digital format from the current approach that mixes analog signals (which can be watched without a set-top box on an older “cable-ready” television) with digital signals. This is mainly being driven by the need for extra capacity to handle high definition programs. A company can send 10 standard-definition channels or 2 high-definition channels in the space of one analog channel. All that means is that there is not a shortage of channels for use by Internet data, at least for a while.”
This moves Time Warner’s suspension of the DOCSIS 3.0 rollout from the “darn” to the “huh?” category. Even if faster speeds aren’t available right now, wouldn’t it make more sense to keep the current broadband offerings and rollout DOCSIS 3.0 anyway, so that congestion in that last mile won’t be as pronounced?
Now, this next part is pure speculation, but perhaps there’s a method to Time Warner’s madness. (Granted, there’s more “madness” than “method” in here, but follow along anyway.) Verizon and AT&T, using fiber optic technology, offers 50Mbit and 25Mbit connections. This pressures Time Warner to say that they were working on >20Mbit solutions of their own. So in a choice between using DOCSIS 3.0 to offer greater speed to customers or using the new technology to fight congestion, Time Warner decided to do the former.
The only problem is that, just as 7 and 15Mbit connections to 500 houses with 38Mbits of capacity were overselling, so would 20-50Mbit connections to 500 houses with 152Mbits of capacity be overselling. Overselling 7 and 15Mbit connections worked mostly because most customers do not actually use the capacity that they’re being sold. (Even a 300GB/mo “heavy user” like myself only consumes 5% of the capacity he was sold.) But with more customers, more applications, and more demand, that assumption doesn’t necessarily hold true in the future.
If customers actually used the Internet they were sold, there would likely be no way that customers wouldn’t be affected – except if they could be assured that customers couldn’t actually use the bandwidth that Time Warner was offering. Thus, the data caps – set low enough so that Time Warner can sell 50Mbps Internet – like its competitors do – without having to actually deliver the capabilities of 50Mbps Internet – like its competitors do. Without caps, Time Warner’s entire plan for DOCSIS 3.0 falls apart.
Time Warner could, of course, if they invested the time and research into it, convert more analog cable TV channels into increased bandwidth. What might be a better plan for Time Warner is simply to bite the bullet, use DOCSIS 3.0 to relieve congestion rather than increase speed, and increase speed incrementally when the capabilities get there. As the Rochesterians switching to Frontier in droves show, people are willing to sacrifice speed for data; if Time Warner has an uncapped 7Mbit plan while its competitors offer capped plans of any speed, they’ll not want for customers.
Of course, that assumes competition – and the other major problem is that Time Warner is actually trying to lobby North Carolina’s state government to literally outlaw municipal broadband. The city of Wilson – 50 miles east of Raleigh – has figured out how to provide 10 down, 10 up fiber connections for $35, compared to Time Warner’s 10 down, 2 up cable Internet connection for $57, in a program they call “Greenlight.”
Hmm… anyone know how to get something like “Greenlight” started in Austin?