Why do some ISP's have bandwidth quotas?

[Joe_Greco]

> Now, ISP economics pretty much require that some amount of overcommit
> will happen. However, if you have a 12GB quota, that works out to
> around 36 kilobits/sec average. Assuming the ISP is selling 10Mbps
> connections (and bearing in mind that ADSL2 can certainly go more than
> that), what that's saying is that the average user can use 1/278th of
> their connection. I would imagine that the overcommit rate is much
> higher than that.

I don't think that things should be measured like this. Throughput !=
bandwidth.

No, but it gives some rational way to look at it, as long as we all realize
what we're talking about. The other ways I've seen it discussed mostly
involve a lot of handwaving.

Technically the user can use the connection to it's maximum theoretical
speed as much as they like, however, if an ISP has a quota set at
12G/month, it just means that the cost is passed along to them when they
exceed it.

And that seems like a bit of the handwaving. Where is it costing the ISP
more when the user exceeds 12G/month?

Think very carefully about that before you answer. If it was arranged
that every customer of the ISP in question were to go to 100% utilization
downloading 12G on the first of the month at 12:01AM, it seems clear to
me that you could really screw up 95th.

> Note: I'm assuming the quota is monthly, as it seems to be for most
> AU ISP's I've looked at, for example:

Yes most are monthly based on GB.

> capacity is being stifled by ISP's that are stuck back
> in speeds (and policies) appropriate for the year 2000.

Imagine a case (even in the largest of ISP's), where there are no
quotas, and everyone has a 10Mbps connection.

I'm imagining it. I've already stated that it's a problem.

I don't think there is an ISP in existence that has the infrastructure
capacity to carry all of their clients using all of the connections
simultaneously at full speed for long extended periods.

I'll go so far as to say that there's no real ISP in existence that
could support it for any period.

As bandwidth and throughput increases, so does the strain on the
networks that are upstream from the client.

Obviously.

Unless someone pays for the continuously growing data transfers, then
your 6Mbps ADSL connection is fantastic, until you transit across the
ISP's network who can't afford to upgrade the infrastructure because
clients think they are being ripped off for paying 'extra'.

Now, at your $34/month for your resi ADSL connection, the clients call
the ISP and complain about slow speeds, but when you advise that they
have downloaded 90GB of movies last month and they must pay for it, they
wont. Everyone wants it cheaper and cheaper, but yet expect things to
work 100% of the time, and at 100% at maximum advertised capacity. My
favorites are the clients who call the helpdesk and state "I'm trying to
run a business here" (on their residential ADSL connection).

90GB/mo is still a relatively small amount of bandwidth. That works out
to around a quarter of a megabit on average. This is nowhere near the
"100%" situation you're discussing. And it's also a lot higher than the
12GB/mo quota under discussion.

> What are we missing out on because ISP's are more interested in keeping
> bandwidth use low?

I don't think anyone wants to keep bandwidth use low, it's just in order
to continue to allow bandwidth consumption to grow, someone needs to pay
for it.

How about the ISP? Surely their costs are going down. Certainly I know
that our wholesale bandwidth costs have dropped orders of magnitude in
the last ~decade or so. Equipment does occasionally need to be replaced.
I've got a nice pair of Ascend GRF400's out in the garage that cost $65K-
$80K each when originally purchased. They'd be lucky to pull any number
of dollars these days. It's a planned expense. As for physical plant,
I'd imagine that a large amount of that is also a planned expense, and is
being paid down (or already paid off), so arguing that this is somewhere
that a lot of extra expense will exist is probably silly too.

> What fantastic new technologies haven't been developed
> because they were deemed impractical given the state of the Internet?

Backbone connections worth $34/month, and infrastructure gear that
upgrades itself at no cost.

Hint: that money you're collecting from your customers isn't all profit.

... JG

[Adrian_Chadd]

No, its that they've run the numbers and found the users above 12G/month
are using a significant fraction of their network capacity for whatever
values of signficant and fraction you define.

Adrian

[andrew2]

Joe Greco wrote:

Technically the user can use the connection to it's maximum
theoretical speed as much as they like, however, if an ISP has a
quota set at 12G/month, it just means that the cost is passed along
to them when they exceed it.

And that seems like a bit of the handwaving. Where is it costing the
ISP more when the user exceeds 12G/month?

Think very carefully about that before you answer. If it was arranged
that every customer of the ISP in question were to go to 100%
utilization downloading 12G on the first of the month at 12:01AM, it
seems clear to
me that you could really screw up 95th.

First, the total transfer vs. 95%ile issue. I would imagine that's just a
matter of keeping it simple. John Q. Broadbanduser can understand the
concept of total transfer. But try explaining 95%ile to him. Or for that
matter, try explaining it to the average billing wonk at your average
residential ISP. As far as the 12GB cap goes, I guess it would depend on
the particular economics of the ISP in question. 12GB for a small ISP in a
bandwidth-starved country isn't as insignificant as you make it sound. But
lets look at your more realistic second whatif:

90GB/mo is still a relatively small amount of bandwidth. That works
out to around a quarter of a megabit on average. This is nowhere
near the "100%" situation you're discussing. And it's also a lot
higher than the 12GB/mo quota under discussion.

As you say, 90GB is roughly .25Mbps on average. Of course, like you pointed
out, the users actual bandwidth patterns are most likely not a straight
line. 95%ile on that 90GB could be considerably higher. But let's take a
conservative estimate and say that user uses .5Mbps 95%ile. And lets say
this is a relatively large ISP paying $12/Mb. That user then costs that ISP
$6/month in bandwidth. (I know, that's somewhat faulty logic, but how else
is the ISP going to establish a cost basis?) If that user is only paying
say $19.99/month for their connection, that leaves only $13.99 a month to
pay for all the infrastructure to support that user, along with personnel,
etc all while still trying to turn a profit. In those terms, it seems like
a pretty reasonable level of service for the price. If that same user were
to go direct to a carrier, they couldn't get .5Mbps for anywhere near that
cost, even ignoring the cost of the last-mile local loop. And for that same
price they're also probably getting email services with spam and virus
filtering, 24-hr. phone support, probably a bit of web hosting space, and
possibly even a "backup" dial-up connection.

Andrew

[Mark_Newton]

In the Australian ISP's case (which is what started this) it's rather
worse.

The local telco monopoly bills between $30 and $50 per month for access
to the copper tail.

So there's essentially no such thing as a $19.99/month connection here
(except for short-lived "flash-in-the-pan" loss-leaders, and we all know
how they turn out)

So to run the numbers: A customer who averages .25Mbit/sec on a tail acquired
from the incumbent requires --

   Port/line rental from the telco ~ $50
   IP transit ~ $ 6 (your number)
   Transpacific backhaul ~ $50 (I'm not making this up)

So we're over a hundred bucks already, and haven't yet factored in the
overheads for infrastructure, personnel, profit, etc. And those numbers
are before sales tax too, so add at least 10% to all of them before
arriving at a retail price.

Due to the presence of a quota, our customers don't tend to average
.25 Mbit/sec over the course of a month (we prefer to send the ones
that do to our competitors :-). If someone buys access to, say,
30 Gbytes of downloads per month, a few significant things happen:

- The customer has a clear understanding of what they've paid for,
   which doesn't encompass "unlimited access to the Internet." That
   tends to moderate their usage;

- Because they know they're buying something finite, they tend to
   pick a package that suits their expected usage, so customers who
   intend to use more end up paying more money;

- The customer creates their own backpressure against hitting their
   quota: Once they've gone past it they're usually rate-limited to
   64kbps, which is not a nice experience, so by and large they build
   in a "safety margin" and rarely use more than 75% of the quota.
   About 5% of our customers blow their quota in any given month;

- The ones who do hit their quota and don't like 64kbps shaping get
   to pay us more money to have their quota expanded for the rest of
   the month, thereby financing the capacity upgrades that their
   cumulative load can/will require;

- The entire Australian marketplace is conditioned to expect that
   kind of behaviour from ISPs, and doesn't consider it to be unusual.
   If you guys in North America tried to run like this, you'd be
   destroyed in the marketplace because you've created a customer base
   that expects to be able to download the entire Internet and burn
   it to DVD every month. So you end up looking at options like
   DPI and QoS controls at your CMTS head-end to moderate usage, because
   you can't keep adding infinite amounts of bandwidth to support
   unconstrained end-users when they're only paying you $20 per month.
   (note that our truth-in-advertising regulator doesn't allow us to
   get away with saying "Unlimited" unless there really are no limits --
   no quotas, no traffic shaping, no traffic management, no QoS controls.
   Unlimited means unlimited by the dictionary definition, not by some
   weasel definition that the industry has invented to suit its own
   purposes)

- There is no net neutrality debate to speak of in .au because everyone
   is _already_ paying their way.

Like I said a few messages ago, as much as your marketplace derides
caps and quotas, I'm pretty sure that most of you would prefer to do
business with my constraints than with yours.

  - mark