Following the recent news that the Advertising Standards Authority (ASA) is planning a review of ISPs’ use of terminology such as ‘unlimited broadband’, we invited Sebastien Lahtinen, co-founder of thinkbroadband.com, to guest blog on this subject.
- ThinkBroadband.com: Advertising of broadband speeds and ‘unlimited’ usage to get overhaul
Why ‘unlimited broadband’ is not a viable business proposition in today’s economic climate
In the last few years, broadband service providers have been offering what they call ‘unlimited’ broadband services in the hope of attracting customers in what has been a growth market. This has been possible as, historically, capacity of ISP networks has not been a major limiting factor when the typical broadband service was anything up to 2Mbps.
Now that the average user is on a broadband service which can supply anything up to 8 or 16Mbps and services such as BBC iPlayer are taking off, we are starting to see pressure at peak times in various parts of the backhaul network.
There is a parallel we can see between the fixed line broadband and mobile networks. Until recently, some mobile operators offered ‘unlimited Internet’ with selected smartphone packages to attract users but with the increasing take-up of mobile video streaming and other high bandwidth applications, the network operators are under pressure to either increase network capacity, reduce usage of those who consume the most bandwidth or, in reality, probably a bit of both. Finally, even the ASA has decided to review the use of the term ‘unlimited’ which has been so frequently abused in the broadband industry.
So, why is ‘unlimited broadband’ a myth?
When dial-up Internet access was popular, the removal of the monthly subscription meant Internet access was advertised as ‘free’ even though in reality the service providers received some income from the call charges the user would pay their phone company. The user perceived they received a free service, even though they were paying for every minute they were online and thus restricting their own use.
When broadband took off at the start of the Millennium, we saw a return to the subscription model whereby users would pay a monthly fee and receive an ‘unlimited’ service; however this was only possible because in fact there was no great driver for mainstream high bandwidth applications like streaming video or peer-to-peer file sharing. Also, broadband connections were mostly ’0.5 meg’; slow compared to today’s standards.
Broadband connections run across a contended or ‘shared’ network, a bit like the road network. When you drive into any city during the rush hour, your journey will take longer because of congestion. As broadband speeds increased and new media content was developed, providers offering unlimited broadband plans started to suffer the effects of congestion, particularly at peak times. Some started to manage this by ‘traffic shaping’, the process of prioritising some types of traffic such as streaming video to help the user experience, similar to giving public transport priority by way of providing bus lanes.
Whilst consumers are attracted to the term ‘unlimited broadband’, they must realise that a flat rate does not encourage them to ration their use and eventually the broadband pipes will get to bursting point, requiring the ISP to upgrade them. The ISP of course will only do this if they can justify additional investment, usually by charging more for their broadband service.
Broadband usage will always be restricted by one or more of the following:
- Bandwidth (capacity of the pipes)
- Caps (limited on how much you can use),
- Traffic management (slowing down heavy use/users)
- Lack of content to use the traffic
If we want our users to have 1Gbps connections, we have to accept that unlimited broadband cannot exist without some other way of controlling usage. It’s easy to deliver an ‘unlimited 1Mbps’ service as the user is restricted by the size of the pipe (bandwidth), but delivering a 1Gbps connection, one thousand times faster than 1Mbps (and not at 1000 times the cost) means restricting usage by one or more of the above levers.
If it is not cost, a hard cap or traffic shaping, then congestion will act as the natural control. Whilst the costs of upgrading the national infrastructure to meet the demands of broadband users is so high, we will not see truly unlimited broadband services available for any significant length of time. On occasion, when new technology or capacity is introduced, providers will have excess capacity which they can market as ‘unlimited use’ but when the cost of additional capacity becomes a significant factor, the user will end up paying for the bandwidth one way or another. In today’s economic climate, service providers cannot continue to invest in additional capacity to meet the needs of a few unprofitable customers who wish to pay the same flat fee as the average user but use up a disproportionate share of resources.
Sebastien Lahtinen, Co-founder of thinkbroadband.com.
We agree with Sebastien and feel that a review of the ‘unlimited broadband’ terminology is well overdue. Over a year ago Entanet revised its broadband packages to reflect clear monthly usage options instead of split peak/off-peak allowances and an ‘unlimited’ option.
In late 2009 we also introduced traffic management measures as a means of delivering quality service consistency to all users. Whilst this didn’t go down well with excessive users, feedback from our channel partners indicated that it was a positive and successful move. We don’t believe that truly ‘unlimited’ packages will be sustainable in the UK broadband market in the medium term and it’s time consumers are made fully aware of that fact. If they’re not, they risk being seduced by ‘unlimited’ advertising only to be stung at a later date by FUP’s and hidden traffic shaping policies.
About Sebastien Lahtinen
Sebastien Lahtinen is co-founder of thinkbroadband.com, previously known as ADSLguide.org.uk, a website that has provided its users with independent broadband analysis and news since the earliest days of UK broadband connections over 10 years ago. The site is best known for its broadband speed test, used by hundreds of thousands of users to check their speeds and for the largest list of broadband providers and packages.
Have your say!
What are your thoughts on this topical issue? Do you believe that unlimited broadband is still sustainable or do you agree that market forces have turned it into a modern myth? Let us know your thoughts by leaving us a comment below.
- ISPReview.co.uk: UK Advertising Authority Investigates Unlimited Broadband and Speed Claims
- Microscope: ASA launches review of unlimited broadband offers
- uSwitch.com: ASA to investigate unlimited broadband claims
- ISPReview.co.uk: Ofcom Begins the UK Net Neutrality and Internet Traffic Management Debate