Tag Archives: Gigabyte

Broadband Consumption Continues Explosive Growth

OpenVault Just released its Broadband Industry Report for 4Q 2019 that tracks the way that the US consumes data. The results of the reports are as eye-opening as OpenVault reports for the last few years. OpenVault has been collecting broadband usage for more than ten years.

As usual, the OpenVault statistics are a wake-up cry for the industry. The most important finding is that the average monthly data consumed by households grow by 27% from 2018 to 2019, and in the fourth quarter of 2019 the average home used 344 gigabytes of data, up from 275 gigabytes a year earlier. Note that consumption is a combination of download and upload usage – with most consumption being downloaded.

For the first time, the company compared homes with unlimited data plans to those that have plans with data caps. They reported that homes with no data caps used 353 gigabytes per month while homes with data caps used 337 gigabytes per month. That statistic would suggest that homes with data caps try to curb their usage to avoid overage charges.

Interestingly, median usage was significantly different than average usage. Median means the same as midpoint, and the median data usage was 191 gigabytes per month, meaning half of US homes used more than that and half used less. In looking at their numbers, I have to suppose that the median is a lot less than average due to the many homes using slow DSL that can’t consume a lot of broadband.

The report also looks at power users – homes that consume a lot of broadband. They report that nearly 1% of homes now use 2 terabytes per month and 7.7% use over 1 terabyte per month. A terabyte is 1,000 gigabytes. The percentage of homes using over 1 terabyte climbed from 4% a year earlier. This statistic is important because it shows a quickly increasing number of homes that will be hitting the 1 terabyte data caps of ISPs like Comcast, AT&T, Cox, and CenturyLink. I clearly remember Comcast saying just a few years ago that almost no homes had an issue with their data caps, but that no longer can be true.

Homes are starting to buy 1 gigabit broadband when it’s available and affordable. 2.8% of homes in the country now subscribe to gigabit speeds, up 86% from the 1.5% of homes that bought gigabit in 2018.

54% of homes now purchase broadband plans with speeds of 100 Mbps or faster. Another 23.6% of homes are subscribing to broadband between 50-75 Mbps. This means that nearly 78% of homes are subscribing to data plans of greater than 50 Mbps. The average subscribed speed grew significantly since 2018 from 103 Mbps to 128 Mbps. These subscriber statistics should shame the FCC for deciding to stick with the 25/3 Mbps definition of broadband. The agency is clearly setting a target speed for rural America that is far behind the reality of the marketplace.

OpenVault made one comparison to Europe and showed that we consume a lot more broadband here. While the US average consumption of broadband in 4Q 2019 was 344 gigabytes here, it was 196 gigabytes in Europe.

As OpenVault statistics have done in the past, they show network engineers that the demand for new broadband is not abating but is continuing to explode. An annual 27% increase in broadband consumption means that broadband demand is continuing to double every three years. If that growth rate is sustained, then our networks need to be prepared within a decade to carry 8.6 times more data than today. That’s enough to keep network engineers up at night.

Should You Have a Data Cap?

data recovery

data recovery (Photo credit: Sean MacEntee)

Over the last few years most of the cable companies and some telcos have implemented data caps on high-speed Internet access. They always claimed that caps were necessary to help protect their networks from congestion. They claimed that heavy users would clog the networks and make data speeds slow for everybody else. But as someone who sees hundreds of networks, this claim holds no technical validity, except in some isolated instances and in some parts of some networks.

Michael Powell, the head of the National Cable and Telecommunications Association admitted publicly last week that caps are not about congestion, but rather are about ‘pricing fairness”. In the telecom world there is a general rule of thumb that the most active 15% of your users will use 85% of any resource, be that minutes, data, etc. And it’s a pretty good rule of thumb. If cable companies had come along and lowered prices for the 85% who are not heavy users and then made up the difference on higher rates for the 15%, then his argument would resonate with the public. But nobody saw any rate reductions and it’s hard to see data caps as anything more than a way to make even more money from data service.

One has to just note that the US has some of the highest-priced Internet services in the world to poke holes in NCTA’s announcement. If you compare US rates to the Far East or Europe it is easy to see that our rates are way out of line on a cost per megabit of service available to customers.

To make it worse, cable companies are starting to raise data rates. And this follows a ten-year period where the underlying cost of raw data has gotten cheaper every year. When a cable company set a monthly rate of $40 or $50 a decade ago, during that decade the cost of buying wholesale access to the Internet has probably dropped by 90%. It’s my opinion that cable companies know that in another decade that they are going to mostly become ISPs since cable and telephone are both dying products. They are starting to creep the rates up now to hedge against the day when that is their only product.

But even assuming that our rates are too high and that profits are really high, should any ISP consider any sort of cap or limitation on how customers use their data. I think the answer is yes, and it is not for any of the reasons that the cable companies have given.

Using my metric, 15% of the users on a network create most of the data usage. But absent any rules on how the network can be used, a small number of them could be using most of the usage for that group. For example, customers who operate servers and operate ecommerce site or other very busy sites like a pornography server can use huge amounts of data on the network. Much of that data is sent in the upload direction and doesn’t cost as much for a carrier as downloaded data, but a few such sites actually can clog a part of the network if they are busy continuously. The way around this problem is a prohibition against using servers on a basic residential data product. But if you are going to have this kind of policy you also need to have some way to measure how much data each customer is using.

On the download side of the equation, there are always a few customers who abuse any system. There are internet hoarders just as there are hoarders of anything else, and so you might want to set a cap that discourages continuous downloading. Comcast has implemented data caps of around 300 Gb in a lot of markets lately. If a customer downloads movies at a very high quality rate, they can use around 2 Gb per hour. If they watch non-HD movies it’s about half of that. And so a 300 Gb data cap would limit people to watching 150 hours of HD programming or 300 hours of normal programming per month. That works out to a limit of 5 hours per day or HD programming or 10 hours per day of normal programming. That may seem like a lot, but if each person in the family is watching their own programming, that is a really small limit.

I have advised my clients to institute a fairer cap, but to still have one. For instance, a cap set at 1 Tb (1,000 Gb) allows for over three times the usage than the Comcast cap. Anybody going over a 1 Tb cap is likely a data hoarder because that requires somebody to be downloading video more or less continuously every day of the week. Every network has a different configuration and so this is not a hard and fast limit. But I suggest some limit on data, at a very high rate that will only affect a truly small handful of people. The Comcast rate is set to make any family who actually uses their bandwidth to pay more. My suggestion is to set a cap that stops bad abuse, while giving people what they have paid for.

Europe Has the Right Goals

The European Commission issued a press release yesterday that announced that 100% of the households in Europe now have access to broadband.

Most households have some sort of wired access with 96.1% of homes having access to copper, coax or fiber. Wireless coverage with 2G, 3G or 4G covers 99.4% of houses. And all remote homes are now covered by satellite broadband using a network of 148 satellites.

Before anybody argues that we have the same thing here in the US due to satellite, we need to distinguish between the satellite broadband that is available here and what is available in Europe. Basic satellite service in Europe is only $13 per month. I can’t find the speed for but assume this is a few Mbps download speeds. But customers can get 20 Mbps download from satellite for $33 per month.

In the US there are two major satellite providers. ViaSat Exede offers a 12 Mbps download service. The amount you pay is based upon the usage cap you choose. For $50 per month you can get 10 GB per month, for $80 you can buy 15 GB and for $130 you can get 25 GB. Hughesnet offers 5 Mbps down and 1 Mbps up for $50 per month, 10 Mbps down and 1 Mbps up for $60, 10 Mbps down and 2 Mbps up for $80 and 15 Mbps down and 2 Mbps up for $130. The four Hughesnet products also have data caps of 10 GB, 20 GB, 30 GB and 40 GB respectively.

Speed isn’t everything and the caps matter. Just to put those data caps into perspective, a 2-hour HD movie will range between 3 and 4.5 GB. So homes in the US using satellite are very limited in using their satellite connection to view video.

The US satellite companies are also limited since they only have a few satellites capable of delivering the above products. If those satellites get oversubscribed then actual speeds will be slower than advertised in the same way that a cable modem system can bog down in the evening hours. But with more satellites in Europe the speeds can be faster and there is a lot less chance of congestion and oversubscription.

The Europeans also have goals to speed up Internet access. They have the goal by 2020 of getting all citizens the ability to have 30 Mbps download speeds, with at least half of them having access to 100 Mbps.

This is pretty easy to contrast with the US where the current national definition for terrestrial  broadband is 4 Mbps down and 1 Mbps up. Both stimulus grants and borrowing from the RUS have recently financed networks that are able to deliver those speeds.

If we don’t set high goals in the US, and if we are content to finance rural broadband that delivers slow speeds when it is brand new, we are relegating the rural areas to having slow broadband for decades to come.

In the US we are more given to grand announcements that don’t come with any funding or mandates. For example, earlier this year the FCC set a goal of having a Gigabit City in every state of the country. That means a network that is capable of delivering a gigabit of download speeds to customers.

Don’t get me wrong, I would love to live in one of those few places where you can get a gigabit. But this is a completely voluntary system, and a Gigabit City might only be actually selling that much speed to a few customers to be given the designation. Rather than trying to get one City in each state to provide a few customer with a gigabit download speed we ought to instead be concentrating on making our basic broadband a lot faster than 4 Mbps. When that lowly speed is our national goal, we are telling rural America to not expect anything better.

The Europeans have it right and we have it wrong. And a decade from now when we are far behind them in terms of productivity we can look back on the crappy national goals we set for ourselves.