After looking for a good resource on “last mile”, I came across this site that has a very interesting concept of the community working together and sharing the cost of building their own last mile.
http://www.pbs.org/cringely/pulpit/2006/pulpit_20060629_000351.html

It might also be time to start writing your congressmen before the cap moves to your town.

I hope I get that one when I call and cancel after my new service is ready. All of them are actually pretty good.

“I’ll have a supervisor call you in 24 to 48 hours”
It will be interesting to hear if you get a call back.

In order I was told:
“It will be almost impossible to reach that cap”
“The cap is in place to help your computer” (???)
“There is nothing to opt out from”
“We aren’t currently monitoring or metering usage so we can’t not apply it to you”
“There is no one who can cancel your contract with out a fee”
“I’ll have a supervisor call you in 24 to 48 hours”

Sigh…

Writing the DSL industries news, I’ve often reported on bandwidth costs. I’m confident that 10 cents is a reasonable and possibly high figure for the marginal cost of bandwidth That should be accurate for Frontier in Rochester and their larger centers, a majority of their customers. The total cost for bandwidth at one European carrier about twice the size of Frontier is 55 cents per user per month, and their average user does 10 gigabytes per month. These are figures for an incumbent or large wireline carrier in the developed world.

Tony Werner, now CTO of Comcast, three years ago included cost data in a financial presentation for his then employer, UPC, the largest cable company outside the U.S. Working from hie numbers, DSL Prime reported a 10 cents per gigabyte figure. The article was factchecked before publishing by UPC. Since then Moore’s Law has reduced reduced that figure to 4-7 cents.

Providing more bandwidth is not rocket science. Here’s the breakdown of the key factors. Incumbents except the smallest control fiber to most or all of their network, so that the primary cost of handling more bandwidth is upgrading switches, routers, and WDM gear.

Your home is connected to a DSLAM or a cable modem termination system (CMTS.) The DSL side is designed to be non-blocking, giving you full speed essentially all the time. So are most CMTS, but the shared local cable loop can be a limiting factor. Fortunately, DOCSIS 3.0 raises the cable upstream by a factor of 12-30+, probably minimizing loop issues.

Behind the DSLAM or CMTS is the “backhaul” to the “peering point” that connects to the “Internet backbone.” Physically, this typically is 3 to 7 routers/switches/concentrators that are connected by fiber. They go from your neighborhood exchange to a district center. The district center may have a direct connection, but more often it has another hop or three within the carrier’s network. For example, Time Warner Cable has local offices through New York. They probably connect to a New York City “hub.” The New York traffic might be merged with New England at a regional center in Greenwich, then carried from there to Time Warner’s big peering point in Virginia. There are lots of variations on that, but the essential idea is the primary costs is the machines at each connection. Nearly always, they’ve designed the network with fiber in place that can be upgraded as necessary. AT&T, for example, now mostly carries 10 gigabits on a single wavelength, but is rapidly upgrading that to 40 gigabits. They are beginning trials of 100 gigabits with plans to upgrade again in a few years.

All these upgrades cost money – billions in the case of AT&T. When calculated as a cost per gigabyte or per month per DSL customer, however, the total becomes manageable. It’s usually in the dimes per month, and almost always less than 3% of the price charged for the service. Smaller carriers, who don’t have the volume to buy gigabit connections or dark fiber, are in a totally different situation. A British carrier reported bandwidth costs dropped 80% when they moved to GigE, and if they had their own fiber – like all the incumbents – they would be lower still. Unless Frontier’s tech team is incompetent, they have fiber within Rochester and between Rochester and a point with cheap bandwidth line New York City. They will have similar in most medium and small areas as well, most already paid for with the $500M/year they collect in USF and ICC.

At the peering point, the carrier connects to the major backbones (AT&T, Verizon/MCI, Level 3, etc.) and others. Depending on who they are, they pay either “transit” or the many times cheaper “peering” rate. Big carriers mostly peer with each other, paying predominantly the (modest) proportional costs of the secure facility loaded with switches and other gear. They don’t charge each other for transferring the traffic, expect the flow to roughly even out over time. Small carriers almost always have to pay “transit” to a big one like AT&T. That costs $8-15/megabit in medium quantity, much more if your volume is small. A large broadband carrier will typically “peer” 80-95% of their traffic. Peering isn’t free, but the rates are much lower.

DSL and cable carriers of moderate size are generally accepted as “peers” at the lower rate. Most of the backbone bills are paid by someone sending things over the net, like eBay, Amazon, and the video web sites. They can’t “peer”, because they receive relatively little traffic. A carrier, on the other hand, has “eyeballs” – lots of customers watching and recieving things. The backbone providers are always looking for direct connections to “eyeballs,” and usually accept larger telcos and cablecos as peers.

Backhaul and peering/transit are the primary costs of adding bandwidth. For a large company and most incumbents, peering keeps the costs down and upgrading fiber speeds is a moderate expense. The industry standard assumption is $1/month per customer. That would be right for most Frontier customers. Smaller companies can have wildly different costs. One small wireless company in Wyoming is paying 11 times as much as the typical big company. Frontier probably has some places like that, although many of even their smaller towns are on their main fiber network.

Good luck with the site. It’s important work.
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This issue is the future of the internet. Everything hangs in the balance. I’m glad to see other people taking up the fight against metered bandwidth.

I’m sure from the cable provider’s perspective, this is a fight for their lives. Within a very short period of time, streaming and downloadable video will be widely available.

Right now, you can buy or stream HD movies to your PS3, and I believe Xbox360 has a similar competing service. Amazon is starting to do downloads, so is Netflix. Blockbuster is supposed to be getting into the act soon. And then there’s Apple TV and iTunes.

It won’t take long for this to impact the current packaged content services that cable provides.

Seriously: who’s going to pay $100 a month for 300 channels when you never watch more than a dozen of them? Why not stream just those you want from the web? Potentially that’s a big cost savings to consumers. And it provides way more choice – instead of picking from 300 channels, you can pick from 3,000 or maybe 3,000,000!

And how about renting movies? It’s a real pain sometimes to have to get in your car, drive to Blockbuster, mill around for a half hour then stand in line to rent to movies. Isn’t it much, much easier to sit on your couch, select the movie you want and then let it stream to your PS3? The price is about the same.

I’ve watched one movie I purchased on the PS3 and it was okay. 720P with 5.1 sound. It looked, sounded and played okay. I was impressed. I’m sure other people will be similarly impressed.

Comcast and the other ISP’s realize this and so they’ve drawn the battle lines. If they allow the internet to evolve in the way it’s going, their days as packagers of content are severely numbered. In a very short period of time, they’ll end up as the owners of big dumb pipes – and that’s all.

So if you’re a cable provider, how do you stop this? Easy – you introduce caps and metered billing.

Comcast’s proposed caps of 250 GB sound good on their face (way, way better than Frontier, certainly). But if you do the math, you’ll find that if you stream video and download movies, you’ll burn up your caps in no time at all.

1080P Blu-Ray quality movies average around 25-35 GB each. That means you could watch maybe 8-10 Blu-Ray quality movies a month – and that’s about it. It says nothing at all about watching other HD quality streaming video, listening to streaming audio, buying downloadable software (say through Steam or EA Downloader) or whatever. You’ll burn up your bandwidth in no time at all – and legally (no P2P).

The kicker is that the overage fees proposed by the ISP’s – that phase in after you hit the caps – make watching streaming or downloadable video cost-prohibitive. And that’s the beauty of the whole metered bandwidth plan. It’s so, so sneaky.

Because right now, very few people would be pushing the caps.

But a few years from now when there’s more internet content available and faster (20-50 MB/s) download speeds are the rule rather than the exception, 250 GB a month will be nothing. Remember when a 2 GB hard drive was considered huge? Or when 256 MB of RAM was all you’d ever need? Same thing.

So in reality, this is a nothing more than an under-handed, pre-emptive attack by the ISP’s and cable providers to stifle the internet’s likely path of evolution: metered bandwidth makes it possible for cable providers to remain safe in their market niche as content packagers – and for the other ISP’s, it provides a nice new revenue center – a good bonus for their shareholders.

They’ll kill the technology and innovation before it gets here. A neat, sneaky little trick.

We need to nip the metered bandwidth movement in the bud right now. It’s the single biggest threat to the future of the internet that currently exists. If allowed, it will stifle new technology and choice – all while unfairly lining the pockets of the big ISP’s.

I’ve written a couple blog entries about Comcast on this subject. They’re at:

http://www.mikepellegrini.com/weblog/2008/06/metered_bandwidth_will_kill_mo.php#more

http://www.mikepellegrini.com/weblog/2008/05/comcast_metered_billing_plan_a.php