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A minor media brouhaha erupted last week when the FCC Chairman sent a letter to Verizon. The letter inquired about the company’s disclosure of its intent to manage traffic for the heaviest users of its unlimited mobile plan for certain cell sites at times of peak congestion beginning in three months. Verizon responded that its actions are compliant with the agency’s definition of reasonable network management and is necessary to ensure a quality experience for all subscribers on its network. It is possible that many subscribers will never experience a slowdown.
As Sandvine’s Global Internet Phenomena reports, traffic on mobile networks is highly disproportionate. Just the top 1% of users in a mobile network consume almost 20% of a network’s capacity. The bottom 50%, consume just 2% of the capacity. The middle 49% takes the remaining 78 percent.
This presents a challenge for operators to price network access. Indeed the same one-size-fits-all price that covers cost would certainly be unfair to at least 52% of the networks subscribers who have disproportionate bandwidth use. They would either be paying too much or too little for their consumption.
Indeed “unlimited” mobile plans are subject to fair use, and in practice, all operators globally employ some amount of reasonable network management–which has been recognized by telecom regulators as a necessary, if not prudent, measure on mobile networks which may have limitations relative to fixed networks. Moreover, such fair use is common amongst other industries and companies, most notably Netflix which was the subject of a class action lawsuit over its “unlimited” DVD by mail plan. The court found that Netflix could limit the amount of DVDs delivered to heavy users as long as it disclosed the practice.
Bear in mind that a decade ago it would have taken thousands of dollars and many weeks to download the equivalent of a digital movie to a mobile phone. Verizon customers today do this as a matter of course at a fraction of the cost. In any case, before any one of Verizon’s unlimited mobile subscribers even experience the proposed network management, he will have been able to do all of the following for just $65: send several thousand emails, visit several thousand websites, stream 8 hours of music, upload 300 photos, watch at least an hour of high definition video, conduct 3 hours of video calls, and use the standard voice and text options of the plan.
What puts this particular plan over the edge is data-heavy online gambling and movies which devour network bandwidth. Net neutrality supporters want us to buy into this idea that all data is equal regardless of its technical considerations and impact to the network. But this means that the network commons are not allocated fairly.
However the answer is not to penalize any one party or impose onerous regulations. To be sure, operators can and do build more networks, but before resorting to rules that can impose unintended negative consequences, it makes sense to investigate some technical solutions. This problem can be minimized with improved video encoding and can address what is two-thirds of fixed internet traffic and 40% of mobile traffic: real time entertainment.
Video comprises the largest part of network traffic and its fastest growing category. Typical providers include YouTube, Netflix, MPEG, Amazon Video, Vimeo, Hulu, and media companies such as Washington Post, Huffington Post, and New York Times. YouTube at 17.61% of network traffic is the single largest source of all downstream mobile traffic in North America; Netflix consumes 5%. Most video content is poorly encoded and uses network capacity inefficiently.
Companies such as Denmark-based mediathand offer encoding solutions that reduce bit rate consumption by 30-50%, meaning that live or streamed video takes significantly less network capacity. Better formatting also improves user experience (no buffering, stalling or stops) and lowers cost for content providers both in the storage and delivery of content.
Moreover, video encoding can help lessen the digital divide. Solutions such as mediathand are being tested to deliver video entertainment package in remote, harsh and rural environments with limited network capacity, limited bandwidth, and older generation networks. Indeed such solutions can provide dozens of live streaming channels on TVs and mobile devices as well as interactive IP-based services such as mobile learning and education.
Smart technological solutions can help not only to resolve ideological debates, but can improve user experience, lower operating costs, and make more efficient use of networks. An ounce of technology can be worth a pound of regulation.
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