Back in 2008 Nemertes Research published the results of a study in which we predicted that bandwidth demand would outstrip bandwidth growth in access networks in the 2010-12 timeframe. Our study was based on a detailed analysis of bandwidth demand trends, coupled with limitations in investment in last-mile technologies. The predictions we made have already come to pass in the mobile world, where despite the rapid growth of WiMax, LTE, and other faster broadband technologies; most U.S.-based wireless service providers have already implemented bandwidth caps or surcharges for those who exceed a certain amount of bandwidth per month.
Now, those same caps are moving into the residential Internet access market as service providers such as AT&T, Charter, and Comcast have announced caps or service tiers for their home Internet customers. For example, AT&T recently announced 150 and 250 GB caps depending on service, with surcharges for those who exceed the cap.
There’s much debate within industry press and analyst communities as to the justification for these caps. Service providers have long argued that a few users consume a disproportional amount of bandwidth hampering network performance for other customers. Others have charged that these caps are simply a way for service providers to throttle (no pun intended) overlay movie providers such as Netflix and Amazon to protect their own video on demand services (and revenue streams). In response to these caps, Netflix recently announced that it would now deliver streaming movies via lower quality codecs to reduce bandwidth consumption – in effect demonstrating the prediction we made is coming true – bandwidth limitations at the access layer serve to limit innovation at the edge.
Regardless of the reason for the caps, consumers (and businesses) who use large amounts of bandwidth stand to see higher costs, lower performance, or potentially hard caps limiting the ability to use innovative new applications.
For example, I expect backup providers such as Carbonite and Mozy to also struggle with bandwidth limitations. Personally I recently copied several hundred gigabytes of home movies to my PC, which I backup to Mozy. I’m sure I’m not the only one backing up tens or hundreds of gigabytes of home media files. Bandwidth caps threaten the survival of these services (and Mozy recently had to switch to a tiered storage model from all-you-can-store in response to higher than expected infrastructure costs).
With almost 90% of companies expanding teleworking programs, the economic model for telework is largely based on cheap, unlimited bandwidth for the home worker. Should home workers now face higher bandwidth costs, or need to move to business-class services to avoid any caps, the cost of supporting teleworking programs rises, especially for those actively investing in video conferencing or other collaborative applications.
The growth bandwidth caps in both residential and wireless markets bears watching for consumers as well as IT and line of business managers. Keep your eye on rising access costs, bandwidth limitations, and their impact on your teleworking architecture; especially if unified communications is part of your home worker portfolio. Look as well at technologies and products that can limit bandwidth use through approaches such as compression, multicast, virtualization, and/or adaptive codecs.
The era of cheap, unlimited bandwidth appears to be drawing to a close. Make sure your teleworking plans are revised to accept this new reality.