The Right Question: What % of the Time Does Speed Fall 50%

Who to ask: Deutsche Telekom, France Telecom, ETNO, ITU and anyone who claims that video requires expensive QOS networks.

Accurate answer: Almost never on major wired networks. Best efforts telco networks are generally designed to rarely go over 80% of capacity, per Bell Canada to CRTC. Cablecos may suffer a little more from congestion, but Jason Livingood of Comcast says that even in the worst congestion, speeds don’t go down more than a third. Bandwidth isn’t free, but it’s cheap enough to have plenty of bandwidth for all but Katrina or 9/11 sized emergencies. The results on wireless is less clear, but generally there is far less congestion than the press reports suggest.

Why it matters: The Euro big telcos are spending millions to lobby for the “Google tax,” a charge on all video going over the net. They claim that’s necessary because they need to spend billions to upgrade their networks. They want Daily Motion, Google, Amazon and Netflix to pay for special “Quality of Service” delivery. That’s b___. Even HD video can look great at 3 megabits and below, with the new H.265/HEVC about to halve that. Video comes across fine on any reasonable “best efforts” network.

      The Euro telcos, working through their ETNO trade association, are repeating everywhere the false claim their networks suck and can’t carry video. Video traffic is growing at a rapid rate, but the total cost of bandwidth at major carriers is flat to down. The gear needed – primarily switches and routers – is becoming rapidly cheaper because of Moore’s Law. People who don’t understand networks are often persuaded telcos need more money because traffic is growing, but everyone informed knows that’s not so. Politicians like Neelie Kroes and the folks at ITU make sympathetic noises but I believe actually know the argument is unsupportable.

     The big telcos have major profit problems. Telefonica and France Telecom have had to cut dividends and Merrill Lynch has called on Deutsche Telekom to do the same. Telefonica has even cut top executive salaries. Landline voice, once among the most profitable products in the world, is in inexorable decline. For most of the last decade, broadband growth compensated. But broadband is near saturation so has little room for growth. So they want to tax the Internet to keep dividends and the stock price up.

Common sense confirmation: 22M Netflix users can easily watch HD. On Jennie’s 3 megabit Verizon DSL, The Tudors looks great in on a 50″ TV. I wouldn’t have believed it if I hadn’t seen it myself. Buffering artifacts are very rare, and most problems turn out to be the home wireless connection, not the broadband line. 

Common sense confirmation #2: Nowhere in the warld has any broadband carrier found it profitable to offer a QOS enabled offering for consumer broadband. No one wants or needs it. 

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