Tuesday, May 17, 2011

Netflix Leads Bandwidth Usage

The concern regarding the rise in bandwidth usage is real and cable operators are concerned that their broadband pipeline is getting more and more crowded, especially having sold an "all you can eat" model and not being able to capitalize on this increased usage. "In North America, Netflix streaming video accounts for 29.7% of peak downstream Internet traffic and has become the largest source of Internet traffic overall, according to a study by bandwidth-management vendor Sandvine." Netflix has even surpassed BitTorrent in streams. And from all indication, Netflix usage will only continue to grow.

Will this research only push broadband providers to move away from the open buffet to a usage based model? For cable, the fear is that the consumer will prefer the dumb pipe and cut its cord to cable's linear and on demand model to simply become the conduit for a consumer's web access. "Earlier this month AT&T adopted monthly bandwidth limits (150 Gigabytes for DSL and 250 GB for U-verse Internet customers) and will charge $10 for each additional 50 Gigabytes used." Of concern for Netflix but of much interest to other providers.

Consumer acceptance of a usage based fee will encourage other cable companies to follow. And it will take the consumer back to the days when their "long distance bills" were too high and phone usage was timed. Not a pretty site. The days of unlimited broadband may soon be numbered as streaming starts to look a lot like a utility service and we pay close attention to how many bytes we use.