SAN FRANCISCO, 11 NOVEMBER 2008 - The digital Disneyland of the future -- where we freely work and play online -- may be at risk. Why? Because, some argue, broadband carriers can't support it. The Internet's "free ride" culture has led to more people downloading gigabytes of data at practically no cost. Even if broadband infrastructure's capacity doubled or tripled, there's no avoiding the equivalent of an abrupt work stoppage.
There are signs of the free ride being nearly over. In the U.K., a million users are about to bump into "soft caps" for usage that their carriers imposed, according to consumer research group uSwitch. In the U.S., some carriers have also started imposing caps that customers have found out about only when they exceeded them in their inaccurately labeled "unlimited" plans. (These limits were hidden in the "unlimited" contracts' fine print.) Comcast, for example, now has a national cap of 256GB per month. And a few are experimenting with tiered pricing, where the more you use, the more you pay -- just like you do for electrical, gas, and water.
Where is all the bandwidth going? Downloading Iron Man in HD, tapping cloud-computing services for business purposes, deploying collaboration technologies that connect disparate workforces, downloading and sharing music and other entertainment files, playing online games, and using remote-work tools like VPNs, VoIP, and app streaming.
"In the space of two, three years, [bandwidth] demand has been doubling and tripling," says Michael Voellinger, senior vice president at Telwares, which helps clients manage telecommunications spending. "And there's only a certain amount of capacity. It's a shared resource."
To be fair, some analysts say there is no bandwidth crisis looming, that there is plenty of capacity available. Derek Turner, research director of the anti-"big media" advocacy group Free Press, says if there were a looming shortage, most carriers would have already imposed tiered pricing or explicit caps; the fact that only a few do points to weaknesses in their specific infrastructure, not to a general shortage of capacity.
But assuming a looming bandwidth shortage -- whether widespread or local to certain areas -- analysts agree that two things must change. First, bandwidth pricing needs to be like any other precious utility, such as water or electricity, which means charging heavy users more to both discourage wasteful usage and bring in money to support such usage. "Broadband is becoming a utility" with a baseline usage cost and overage charges, says Gartner analyst Elroy Jopling. "You wouldn't leave the faucet on and let it run." Second, service and content providers need to rework their networks, protocols, and content to use less bandwidth.
Short of the federal government stepping in -- an unlikely event given historic U.S. aversion to regulation -- the telecom industry will likely adopt its own approach, focusing on increasing revenues from its customers or limiting their use through pricing penalties.
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