This one caught me completely by surprise. This Neilson Report talks about how certain US cable companies have placed bandwidth caps on the total amount of data you can access in a month.
These caps come at an inopportune time with respect to recently emerging video services on the internet. Yet, network providers, tired of being mere bit-pipes are claiming that their precious resources (namely bandwidth) are being exhausted by greedy consumers who already pay a flat rate for 'all you can eat' broadband services. Well, guess what? The buffet is limited after all.
Let's look at this for a moment. According to the article, one cap is 250 GB, which Neilson estimates is equivalent to 120 full length standard definition movies. Yet, for an 'always on' service, that statistically streams 20 Mbps to your home, this is less than 4% of the statistical capacity promised in the customer's Service Level Agreement.
Now it is true, that nobody expects a customer to sustain 20 Mbps continuously for 24 hours a day, 30 days a month, but it would seem this cap is somewhat arbitrary.
What bothers me is that it comes at a time when video services are still just taking off. Rather than constraining the network usage, perhaps the cable companies should start to think about ways to monetize such streams. Maybe instead of preventing the data flow or charging a premium for exceeding the quota, the cable companies should think about a way to provide directed advertising to their broadband users similar to the techniques they employ in their TV services.
The fear is that in order for the cable company to insert advertising to video and audio streams is that they would have to inspect packets to know that the user is actually seeking a video or audio service or about to play an on-line game. This raises privacy concerns. However, there may be other techniques where the cable companies could allow users to opt-in for a service that allows ads to stream to their desktop in return for unlimited downloading.
My concern is that whatever solution they arrive at, a precedent would be set by which world-wide mobile operators might follow the same model. It is one thing when a cable operator can statistically offer you 6.4TB per month of capacity; it is much greater concern when a mobile operator can only offer you less than a hundredth of that on a statistical basis. Mobile handset users might be even more likely to exceed their "4% bandwidth quota" which in the case we identified earlier would be less than 1.2 full length standard definition movies per month.
I am not against the operators making money, nor am I advocating unlimited use which would drive the network to its knees, but I am calling out for a more intelligent response from the operators which would monetize their services in a more natural way.