net.wars: Not too cheap to meter
by Wendy M Grossman | posted on 14 July 2006
An old Net joke holds that the best way to kill the Net is to invent a new application everyone wants. The Web nearly killed the Net when it was young. Binaries on Usenet. File-sharing. Video on demand may finally really do it. Not, necessarily, because it swamps servers, consumes all available bandwidth. But because, like spam, it causes people to adopt destructive schemes.
Two such examples turned up this week. The first, from the IP Development Network, the brainchild of Jeremy Penston, formerly of UUnet and Pipex, HD-TV over IP: Who Pays the Bill? (PDF), argues that present pricing models will not work in the HDTV future, and ISPs will need to control or provide their own content.
It estimates, for example, that a consumer's single download of a streamed HD movie could cost an ISP £21.13, more than some users pay a month. The report has been criticised, and its key assumption – that the Internet will become the chief or only gateway to high-definition content – is probably wrong. Niche programming will get downloaded because any other type of distribution is uneconomical, but broadcast will survive for mass-market.
The germ that isn't so easily dismissed is the idea that bandwidth is not necessarily going to continue to get cheaper, at least for end users.
Which leads to exhibit B, the story that's gotten more coverage, a press release – the draft discussion paper isn't available yet – from the London-based Association of Independent Music (AIM) proposing that ISPs should be brought "into the official value chain". In other words, ISPs should be required to have and pay for licenses agreed with the music industry and a new "Value Recognition Right" should be created.
AIM's reasoning: according to figures they cite from MusicAlly Research, some 60 percent of Internet traffic by data volume is P2P, file-sharing, and music has been the main driver of that. Therefore, ISPs are making money from music. Therefore, AIM wants some.
Let's be plain: this is madness.
First of all, the more correct verb there is "was", and even then it's only partially true. Yes, music was the driver behind Napster eight years ago, and Gnutella six years ago, and the various eHoofers.
But now Bittorrent is the biggest bandwidth gobbler, and the biggest proportion of transferred data transferred is video, not music. This ought to be obvious: MP3 4Mb, one-hour TV show 350Mb, movie 700Mb to 4.7Gb. Music downloads started first and have been commercialized first, but that doesn't make it the main driver; it just makes it the historically first driver. In any event, music certainly isn't the main reason people get online: that is and was email and the Web.
Second of all: one of the key, underrated problems for any charging mechanism that involves distinguishing one type of bits from another type of bits in order to compensate someone is the loss of privacy. What you read, watch, and listen to is all part of what you think about; surely the inner recesses of your mind should be your own. A regime that requires ISPs to police what their customers do – even if it's in their own financial interests to do so – edges towards Orwell's Thought Police.
Third of all: anyone who believes that ISPs are making money from P2P needs remedial education. Do they seriously think that at something like £20 per month for up to 8mbps ADSL anyone's got much of a margin? P2P is, if anything, the bane of ISPs' existence, since it turns ordinary people into bandwidth hogs.
Chris Comley, managing director of Wizards, the small ISP that supplies my service (it resells BT connections), says that although his company applies no usage caps, if users begin maxing out their connections (that is, using all their available bandwidth 24 hours a day, seven days a week) then the company will start getting complaining email messages from BT and face having to pay higher charges for the connections it resells. Broadband pricing, like that of dial-up before it (when telephone bills could be relied upon to cap users' online hours), is predicated on the understanding that even users on an "unlimited" service will not in fact consume all the bandwidth that is available to them.
In Comley's analogy, the owner of an all-you-can-eat buffet sets his pricing on the assumption that people who walk in for a meal are not in fact going to be able to eat everything in the place.
"The price war over bandwidth is going to have to be reversed," he says, "because we have effectively discounted what the user pays for IP to such a low level that if they start to use it they're in trouble, and they will if they start using video on demand or IPTV."
We began with an old Internet joke. We end with an old Internet saying, generally traced back to the goofy hype of Nicholas Negroponte and George Gilder: that bandwidth is or will be too cheap to meter. It ought to be, given that the price of computing power keeps dropping. But if that's what we want it looks like we'll have to fight for it.Tags: net.wars, ISPs, bandwidth, HDTV
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Wendy M. Grossman’s Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series. Readers are welcome to post here, at net.wars home, follow on Twitter or send email to netwars(at) skeptic.demon.co.uk (but please turn off HTML).
net.wars: Not too cheap to meter