Bandwidth Cost
April 29, 2009
A happy quack to the reader who wrote, asking me to comment on the cost of bandwidth. His point of reference was the New York Times’s article “In Developing Countries, Web Grows Without Profit” here.
“I believe in free, open communications,” Dmitry Shapiro, the company’s chief executive, said. “But these people are so hungry for this content. They sit and they watch and watch and watch. The problem is they are eating up bandwidth, and it’s very difficult to derive revenue from it.”
My views on this issue are well documented in my books and studies. Let me recap three ideas and invite feedback on these.
First, most users and content centric outfits make errors when estimating the costs of online access. Unexpected spikes in telco fees are even today in my experience greeted with surprise and indignation. I hesitate to suggest that bandwidth is assumed to be cheap, readily available, and without much technical interest. As the New York Times’s article points out, bandwidth is an issue, and it can be a deal breaker financially and technically.
Second, in theory bandwidth is unlimited. The “unlimited” comes with two trap doors. One is the money available to apply to the problem. Bandwidth, even today, is not free. Someone has to build the plumbing, pay for infrastructure, hire the technical staff, and work the back office procedures. The second trap door is time. It is possible in Kentucky to make a call and get more bandwidth. But within the last two months, we found that making this call did not result in immediate bandwidth. The vendor said, “We can reprovision you within 72 hours. Take it or leave it.” The reason the vendor made the statement I learned was a result of tightening financial noose around the vendor’s neck. The vendor in turn told me to wait.
Third, user expectations are now being shaped in a direction that makes bandwidth, infrastructure, and technical resources increasingly fragile. Here’s an example. Last night in a restaurant, a young man at a table next to mine watched a YouTube.com video on a mobile device. That young man in Boston and young people throughout the world see the Internet (wireless or wireline) as a broadcast channel. In my experience, this shift to rich media will put financial and technical pressure on infrastructure needed for this use of the Internet.
In short, I think there’s a cost problem looming. Will it arrive before the technical problem? Pick your poison.
Stephen Arnold, April 29, 2009
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