Friday, October 21, 2005

Phone, Cable Operator and the Internet

The Wall Street Journal published an intereting article about how phone and cable operators are trying to throttle network usage. Things like BitTorrent, Skype, Vonage and network intensive services are chewing up bandwidth. The cable and phone guys contend this has a negative impact on "normal" or lighter use customers. Placing throttles on heavy use technologies is customer friendly, they contend.

Right. Sure, there is some truth to this. But the reality is that these companies have based their rate plans on an average number of bytes per user per day. Bandwidth intensive apps blow the numbers away, and ultimately, if enough customers chew up more bandwidth than forecast, the companies leave money on the table.

I can't blame the phone and cable companies for wanting to maximize revenue. As a business guy I get it and appreciate it. As a consumer I can sort of get it because I want a fast network. But the reality is that many of these guys are a monopoly. So if they throttle my IP phone network (or worse, turn it off entirely) I am forced to use their higher price service. I don't have any choice. Kind of flies in the face of the "we're only trying to help our customers" argument.

Feels like there should be an opportunity here for the cable and phone guys to use the heavy usage models to understand how to improve their networks. I'm not holding my breath. But imagine if the network operators really figured out how to improve network throughput such that all the services--today's and those that are coming--could co-exist. That would be customer friendly.

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