Whenever I look at my client’s data products I almost have the same advice – make it faster. I am constantly surprised to find companies who deliver small bandwidth data products when their networks are capable of going much faster. I have come to the conclusion that you should give customers as much bandwidth as you technically can deliver, within any technical restraints.
I know that networks are operated largely by engineers and technicians and very often I hear the engineers warn management against increasing speeds. They typically are worried that faster speeds mean that customers will use more bandwidth. They worry that will mean more costs with no additional revenue to pay for the extra bandwidth.
But the experience in the industry is that customers don’t use more data when they get more speeds, at least not right away. Customers do not change their behavior after they get faster data – they just keep doing the same things they were doing before, only faster.
Of course, over time, internet data usage is steadily increasing on every network as customers watch more and more programming on the web. But they are going to increase usage regardless of the speed you deliver to them as long as that speed is fast enough to stream video. Going faster just means they can start watching content sooner without having to worry about streaming glitches.
The engineers do have one valid point that must be taken into consideration, in that many networks have chokepoints. A chokepoint is any place in a network that can restrict the flow of data to customers. Chokepoints can be at neighborhood nodes, within your network backbone, at devices like routers, or on the Internet backbone leaving your company. If your network is getting close to hitting a chokepoint you need to fix the issue because the data usage is going to grow independently of the speeds you give your customers. When I hear worry about chokepoints it tells me that the network needs upgrades, probably sooner rather than later.
Historically telecom companies were very stingy with data speeds. The first generations of DSL didn’t deliver speeds that were much faster than dial-up and even today there are many markets that still offer DSL with downloads speeds of 1 Mbps. Then cable modems came along and they upped speeds a little, with the first generation of cable modems offering speeds up to 3 Mbps. And over time the telcos and the cable companies increased data speeds a little, but not a lot. They engaged in oligopoly competition rather than in product competition. There are many notorious quotes by the presidents of large cable companies saying that their customers don’t need more speed.
But then Verizon built FiOS and changed the equation. Verizon’s lowest speed product when they launched service was 20 Mbps, and it was an honest speed, meaning that it delivered as advertised. Many of the DSL and cable modem speeds at that time were hyped at speeds faster than could be delivered in the network. Cable modems were particular susceptible to slowing down to a crawl at the busiest times of the evening.
Over time Verizon kept increasing their speeds and on the east coast they pushed the cable companies to do the same. Mediacom in New York City was the first cable company to announce a 50 Mbps data product, and today most urban cable companies offer a 100 Mbps product. However, the dirty secret cable companies don’t want to tell you is that they can offer that product by giving prioritization to those customers, which means that everybody else gets degraded a little bit.
And then came Google in Kansas City who set the new bar to 1 Gbps. Service providers all over the country are now finding ways to 1 Gbps service, even if it’s just to a few customers.
I am always surprised when I find a company who operates a fiber network which does not offer fast speeds. I still find fiber networks all the time that have products at 5 Mbps and 10 Mbps. In all of the fiber-to-the-premise technologies, the network is set up to deliver at least 100 Mbps to every customer and the network provider chokes the speeds down to what is sold to customers. It literally takes a flick of a switch for a fiber provider to change the speed to a home or business from 10 Mbps to 100 Mbps.
And so I tell these operators to make it faster. If you own a fiber network you have one major technological advantage over any competition, which is speed. I just can’t understand why a fiber network owner would offer speeds that are in direct competition with the DSL and cable modems in their market when they are capable of leaping far above them.
But even if you are using copper or coax you need to increase speeds to customers whenever you can. Customers want more speed and you will always be keeping the pressure on your competition.