The End of “Unlimited” Cable Bandwidth May Be Fast Approaching
Cardozo Law School professor Susan Crawford is also an adjunct professor at the School of International and Public Affairs at Columbia University, a Fellow at the Roosevelt Institute, a former ICANN board member and a Special Assistant to the President for Science, Technology, and Innovation Policy. In her recent book “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age”, Crawford took a deep look at the forces shaping the flow of bandwidth from carriers to consumers.
In an insightful Op-Ed Crawford penned for Wired Magazine she explores the future of consumer bandwidth as more consumers cut the cord and obtain their programming via ala carte services such as Hulu, Netflix and the like. The day is fast approaching when cable television is delivered in the form of IP packets just like any other data, and without billing package requirements artificially constructed by cable operators. With all of this in mind, Crawford contends that the cable industry is working to eliminate “unlimited” bandwidth plans in favor of selling users bandwidth based on consumption.
In many areas, the local cable company has a virtual monopoly over bandwidth, particularly when it comes to the ability to provide the massive throughput that future content will require when publishers make 4K the new resolution industry standard.
Pushing for tiered pricing now, while it may be relatively easy to accustom users to the notion of paying per bit, when future bandwidth requirements would turn that kind of system into an unprecedented cash cow. Crawford foreshadows the arguments of providers like Liberty Media chairman John Malone who is likely to justify such pricing changes as a way of ‘limiting congestion’, when in reality according to Crawford it’s always about little more than maximizing profits. Most cable companies made their network investments quite a while ago and are now reaping massive rewards. In fact, according to Crawford, Time Warner Cable and Comcast have been bringing in revenue of more than seven times their investment in infrastructure for some time now.
Netflix has become a means by which many have reduced or eliminated their cable TV subscriptions, but with a use-based bandwidth business model that might change. Malone has already said it makes sense “So that, you know, Reed (Hastings, CEO of Netflix) has to bear in his economic model some of the capacity that he’s burning … And essentially the retail marketplace will have to reflect the true costs of these various delivery mechanisms and investments.” Translated into plain English, he’s saying that anyone who wants to transmit data over his network is going to have to pay him for the privilege and unless the consumer cost of bandwidth is tied in some way to the expense of providing it for consumers, the new more open arrangement where consumers can pick the specific channels they want may quickly start to be priced much the same way carriers have based their pricing for decades already
Any change to a per bit business model by bandwidth providers for consumers would have a profound impact on website owners as well. Proper optimization and hosting efficiency would take on an even bigger role in generating or maintaining traffic as visitors would undoubtedly become reticent to spend their time and precious bandwidth on sites that waste it unnecessarily. For that reason NationalNet continues to seek out every available method of delivering data in the most efficient manner possible, utilizing state of the art servers and hosting protocols carefully designed to provide the best user experience in the fastest and most economical manner possible for publishers and consumers alike.