Tuesday, January 13, 2015

The Great Bandwidth Cap Boondoggle

Figure 1: Current Internet Usage Report
As of Monday, the 9th of January, our family was about to blow through Mediacom's 350GB data cap with 6 days left on the billing cycle. Over the past three months, our family's data usage has averaged 249.13GB per month. Our browsing habits have not changed dramatically this month; however, I did pick up the 50th Anniversary collection of all 23 James Bond films from iTunes and have been working to download those to my local media library.
Figure 2: Past Three Months Internet Usage
What makes me chuckle a bit is that according to Mediacom's Internet Usage page, the data I have consumed to date is equivalent to watching ninety-two (92) HD movies.

How Much Bandwidth Do I Need?
According to Giga OM, Netflix indicates that 1080p HD streaming video will use 4.7GB of data per hour.  Using that figure, 341.4 GB translates to 72.64 hours of 1080p video (which is the quality I choose). Using Mediacom's 2 hour run-time example coupled with Netflix's bandwidth recommendations, then my current usage 72.64 hours translates to 36 movies - NOT 92.

As Gizmodo reports, the picture gets even worse when you consider UltraHD (i.e., 4K video) which will use 4 times the amount of bandwidth as 1080p content - 18.8GB/hour. The new H.265 codec (which is not yet found in many consumer electronics devices) will drop streaming requirements for UltraHD video to 7GB/hour. Using the more efficient codec, the 350GB bandwidth cap will afford our family the opportunity to watch 25 UltraHD movies.

Take a look at this 2012 paper entitled "Capping the Nation’s Broadband Future?" which talks about how data caps have very little to do with network congestion. While traffic on US broadband network has increased, the cost to deliver that service is declining. Consequently, "...broadband is an incredibly profitable business, particularly for cable ISPs." In addition, "[t]iered pricing and data caps have also become a cash cow for the two largest mobile providers...".

The following are Internet Connection Speed Recommendations from Netflix:

  • 0.5 Mbps - Required to be broadband (under previous rules - now its 25mbps)
  • 1.5 Mbps (0.675 GB/h) - Recommended broadband connection speed
  • 3.0 Mbps (1.35 GB/h) - Recommended for SD quality
  • 5.0 Mbps (2.25 GB/h) - Recommended for HD quality
  • 25 Mbps (11.25 GB/h) - Recommended for Ultra HD quality

The Sound and Vision had a nice little infographic illustrating bandwidth requirements.  For 720p, they recommend 3.375 Mbps (1.52 GB/hour). For 1080p, they recommend 6.75 Mbps (3.04 GB/hour).
Mediacom's estimate on the number of movies that one can watch with 354.2 GB of bandwidth is 95. This equates to 1.86 GB/hour or 4.133 Mbps. Per the Netflix web site:
"HD availability is subject to your Internet service and device capabilities. Not all content is available in HD. A download speed of at least 5.0 Mbps per stream is recommended to receive HD content (defined as 720p or better), and you'll want to make sure the Netflix plan you're currently on allows streaming in HD. To see which plan you're on, visit the Change Streaming Plan page."
So Mediacom's estimate of 4.133 Mbps for HD quality is below what the leading purveyor of streaming media recommends. Even at those minimum rates, we are talking about 720p as a MINIMUM - not 1080p. Netflix stating that streaming 1080p video consumes 4.7 GB/hour equates to a 10.44 Mbps connection speed.

Mediacom's estimates for the number of HD movies one can watch with the bandwidth cap allocation is, in my opinion, overstated.

Exceeding the Additional Limit
By today  four days later, I've gone through another 50GB. In that time, I've downloaded the following movies from my iTunes account to my local computer. The only new movie that I purchase was John Wick - that came out digitally this morning at 12:00 AM.

This collection of movies did consume 45.15 GB of disk space. In addition, I did stream John Wick at 1080p (another 3.28GB). So there is no question in my mind that I used the bandwidth. But according to Mediacom's Internet Usage reports, 341.4GB is the equivalent of 92 HD movies. 399.1 GB of bandwidth is the equivalent of 107 HD movies - a difference of 15. Yet, 6 1080p HD movies consumed 45.15 GB of my bandwidth allocation.

At today's prices, buying those movies would cost me $93.94. Mediacom's policy is that once you hit your quota, every block of bandwidth over 50GB is an additional $10. So effectively, there is a 10.6% tax levied on the purchase of each movie.

FULL DISCLOSURE: I did get an automated e-mail message from Mediacom indicating that since this is the first time I've exceeded my bandwidth cap, I won't be charged for the initial overage.

Figure 3: Important Usage Notice
It is just infuriating as a consumer especially when you consider, according to analysis performed by Nate Anderson from ARS Technica, that ISP costs and current state revenues do not justify the need for bandwidth caps.

Let's Examine the ISP's Costs
Up until I made a change to my account back in August, they used to itemize the costs of the different services. Now it's buried into one package price. I'm still using the EXACT same services as I was - they're just being billed differently. When they itemized the bill, the package price for the 25Mbps download rate that I have is $49.95. This works out to be $0.14/GB. Bandwidth becomes more expensive when you go over your quota - then it's $0.20/GB. You have to push the electrons EXTRA hard when you're over your quota.

Since I don't really know what fees ISPs incur for Internet transit, I'm going to use some analysis of what it costs Netflix to stream movies across the Internet. I'll reference the "Stream This!: Netflix's Streaming Costs" article from July of 2009 published on the Streaming Media! At that time, it was estimated that Netflix paid their transit providers $0.03 per GB to relay a movie across the Internet. So the 1080p version of John Wick that I watched this afternoon (which rings in at a whopping 3.28GB) would cost 9.84 cents to convey across the Internet - in 2009.

According to the "Internet Transit Prices - Historical and Projected" article featured on the Dr. Peering web site, average transit costs in 2009 started at $9/Mbps (discounted from there based upon volume).  For 2015, Dr. Peering reports that transit pricing runs at $0.63/Mbps - a 93% reduction from what costs were in 2009. Assuming all other things remain equal, the 3.28GB HD movie that would cost 9.84 cents to convey across the Internet in 2009 would cost 0.69 cents today or .21 cents/GB.

Using this as an example, let's consider my monthly allocation of bandwidth of 350GB. We'll assume that ALL that data comes from outside my ISP's network and is NOT available from any peering partners so Internet transit, the most expensive form of bandwidth, must be used to get it on my behalf. 350 GB multiplied by $0.0021 per gigabyte would cost the ISP $0.735 in transit costs.

Assuming I use my full allocation of bandwidth each and every month, the $49.95/month I pay for my high speed Internet service would leave $49.22 to cover ALL other overhead associated with providing my service and profit which the ISP does deserve to earn.

Mediacom charges $10/50GB in excess of your data cap. Assuming the cost basis is accurate, that 50GB of excess bandwidth costs Mediacom $0.105 in Transit fees leaving - $9.895 to cover profit and overhead.

Seems like it's good to be in the last-mile ISP business!

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