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Think Bandwidth Caps Are Unnecessary? Check Out This Graph

A Seattle man is furious that Comcast unceremoniously cut off his broadband — and banned him for a year — after he busted through Comcast’s 250-Gigabyte usage cap two months in a row.

Comcast’s two-strikes-and-you’re-out rule, without any chance to appeal, does seem draconian. (You can read the ex-Comcast subscriber’s rant on his blog here.)

One thing is clear: Broadband service providers will all need to do something to contain the rapidly rising flood of Internet data.

This is a historical graph showing the bandwidth utilization of Midcontinent Communications’ 100 Gbps network serving the Dakotas and Minnesota from January 2004 to June 2011:

It’s a safe bet that virtually every other Internet service provider could show you a similar-looking graph.

According to Midcontinent, Internet bandwidth consumption among its customers increased 116% in 2010 and has grown more than fourfold since 2009 (see Midcontinent Brings 100 Mbps To The Dakotas, Minnesota). Its network utilization is now at 25 Gbps of traffic; if that quadruples sometime in the next few years it will have to provision more upstream bandwidth and build faster backbone links.

Midcontinent would not provide specific subscriber numbers but said residential data customers grew 9.7% from the end of 2009 to the end of 2010. In 2011 year to date residential data subs are up 1.9%.

So far, Midcontinent has decided to refrain from imposing bandwidth-usage caps. But VP of technology Jon Pederson says “like most network providers we have evaluated this possibility.”

One of the conspiracy theories about bandwidth caps in general is that incumbent providers are trying to stifle Internet video services, like Netflix. In fact, Netflix’s general counsel, David Hyman, said just that in an op-ed recently in the Wall Street Journal.

“This anticompetitive aspect is particularly apparent when one stops to consider that AT&T’s U-verse is a television service delivered as Internet data traversing a network. Similarly, Comcast is testing its own Internet-based television platform in Massachusetts,” Hyman wrote. “So it’s no surprise that bandwidth caps would not apply to the data — e.g., TV shows — that AT&T and Comcast are delivering via broadband, but only to a third party’s data — e.g., TV shows from Netflix.”

Comcast has said in the past that video downloaded via its site does count against the usage cap. In Canada, Shaw says its streaming movie service also will go toward the monthly cap allowance. But the specific question Netflix’s top lawyer is asking here is whether managed IPTV services should be subject to the same maximum-usage limits applied to Internet bandwidth.

I don’t think so. Here’s why: The video going over the private, managed IP network is using dedicated bandwidth, allocated for that purpose. So it doesn’t cause congestion for other Internet services (like Netflix or Hulu) and vice versa.

Perhaps your feeling is: Hey, myISP advertised unlimited, super-fast Internet access — so it’s up to them to invest in a network that can deliver that to me 24/7. It’s not my fault streaming video is eating up more of the pipe.

But there is a real cost for boosting capacity to meet nonstop video streaming. Netflix argues that the cost to deliver an incremental Gigabyte is “less than one cent, and falling.” In aggregate, however, it’s a different equation. Growing network capacity from 100 Gbps to 1 Terabit per second isn’t just a couple of pennies.

Hyman does suggest that limiting speeds by time of day would be an effective traffic-management approach. But why slow everyone down? Maybe enforcing usage limits based on time of day — and giving those who want to use a lot of bandwidth during primetime hours the option of paying more — could be a solution here.

What do you think? Add your thoughts below.


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