Tiered Internet Service

There has been an awful lot of chatter on the net about tiered service and the announcements by telecom companies and others that tiered service is likely the trend of the future for internet carriers. After Mark Cuban’s blog post comparing the tiered service (simultaneously) to HOV lanes on the highway (which I think are fundamentally stupid), 911 services (which are not) and life support equipment (again, not dumb), Ars Technica follows up by bashing the idea.

The fundamental concept that people seem to be missing in this discussion is a point that Cuban made quite well.

The more we upload and download and share…the more bandwidth we consume. The more bandwidth we consume, the more internet traffic jams we have. The more internet traffic jams we have, the worse our internet applications perform.. guess what, your 15mbs download speed is going to crawl like a 14k hayes modem during peak use times. You think its bad now, having to wait overnight for that video to download. It can get a lot worse… We can try all the tricks we want. Edge servers, peer to peer, it wont matter. Just like a 20 lane highway is still going to have gridlock if enough cars use it, so will the net.

But wait, theres [sic] more. That doesnt [sic] even account for the problems and hassles of network providers exchanging traffic.

Networks have limits on the amount of information they can move in a given time. If you get your $14.95 DSL line through Verizon, you think you’re getting 768k downstream (and likely 128k or something upstream). But try this… Visit a Speed Test and check out your actual performance. I’m on a T1 line shared with many other people, but I’m currently puling 563 down and 952 up. That’s largely due to the number of other people accessing it at the same time.

Try running the test at various times when you’re home. You’ll find that 768k connection varies greatly. And it’s for the exact same reason. The other houses in your neighborhood are pulling bandwidth from the same server you are, over the same 768k connections. If the other 149 houses on your node are all watching MovieLink, and pulling a combined 111 Mbps through a router that is built to handle 36 Mbps, you’re going to get slow video and poor performance.

The trouble is, you think you have a 768k connection, and you do, but all you’re trying to get to is the Washington Post’s homepage to read news. But the video providers like Google or MovieLink are pushing so much bandwidth to your neighbors that even simple browsing becomes difficult.

If the cable company wants to make sure that you are getting your 768k connection, they have to invest significant amounts of money to upgrade the routers so they can pump 300Mbps through (so you’re neighborhood can grow into it).

Now they face a choice… They can make you pay $89.95 for that 768k connection in order to recoup the cost, or they can pass the cost on to Google and MovieLink… Tiered service is their way of guaranteeing that your costs stay low while ensuring that the guys who are consuming the bandwidth are paying for the amount of space they consume.

All you wanted to do was get to WaPo to find sports scores. Why should that cost you $89.95 per month when the reason you can’t get through is because your neighbors kid is playing Halo or simultaneously downloading every single episode of Farscape?

The other alternative is to go the route of web hosting providers. They generally charge you based on the storage space and bandwidth you consume. If you’re pulling 16 terabytes of video across a 768k line, you should pay more than a guy pulling a gigabyte. But that still puts the costs of Google’s video on the consumer, not the provider.

What Mark Cuban calls the “information wants to be free movement” is an oddity in nature. It is on of the few times that I can recall a group of people (in this case hard core internet users) banding together to champion a cause that is so detrimental to themselves. They use the net the most, so they will likely end up paying more under a model that charges them for consumption either in higher fees or bandwidth consumption.

It really is a bizarre debate. The Googles, Skypes, Vonages, Yahoos of the world have done an incredible job of convincing consumers the debate is about whether you can or cannot access content. It’s not at all about that. It’s about an ever increasing appetite for content that is outpacing capacity, and who will have to pay the cost for upgrading the capacity.

The carriers plan to charge Google, Yahoo and company to guarantee that their services maintain a certain quality. If you want to watch video, that traffic will be segregated onto separate “pipes” and delivered to you. If they choose not to pay, then you may well get poor quality video, but only because there is so much traffic competing for the line.

With the money they make from tiered services and quality of service agreements, the carriers can reinvest in upgrades to the network that will allow delivery of all content to improve. Since Google and Yahoo stand to make a ridiculous amount of money by selling massive quantities of ether, they should bear some responsibility for the burden that puts on the Internet infrastructure.

Sadly, their best customers – who will end up picking up the tab if tiered services aren’t adopted – are helping them do it.