HD = Congested Internet?

Internet use has gone beyond just e-mail check and a web view here and there. With the emergence of portable video players, streaming video from the internet has become a normal activity. It’s pretty convenient for people on the go or always on the job that they always miss their favorite shows. It may be convenient for you…but internet service providers say that for them the situation has adverse effects.

Major ISPs and telephone and cable companies say that streaming videos are okay – as long as they are constricted to small clips. Evolution of TV-quality and high-definition programming could somehow pose a big threat: congestion of the internet.

Read more on HD’s effects to the internet after the jump.

Internet use has gone beyond just e-mail check and a web view here and there. With the emergence of portable video players, streaming video from the internet has become a normal activity. It’s pretty convenient for people on the go or always on the job that they always miss their favorite shows. It may be convenient for you…but internet service providers say that for them the situation has adverse effects.

Major USPS and telephone and cable companies say that streaming videos are okay – as long as they are constricted to small clips. Evolution of TV-quality and high-definition programming could somehow pose a big threat: congestion of the internet.

According to ISPs, if people start watching videos over the internet the same way they watch TV – i.e., for hours at a time – the internet is strained with usage that it wasn’t designed for. To alleviate this pressure, internet service providers say that they need to beef up the internet’s capacity and doing this will be very expensive. This may lead to bigger price tags for residential internet users or charges to service content providers for guaranteed delivery of large HD video files. This possibility has caused internet activists and consumer groups to work up a storm, saying that such plans may lead to a stagnant internet that will never innovate.

To see which side has a more thought out argument, we need to answer one key question: How much will it cost ISPs to carry out a few hours of primetime TV over their networks every day? Internet carriers are mum about the actual figures, but that doesn’t mean we cannot figure them out for ourselves.

Research firm TeleGeography presents the following data: “As a rough estimate, an always-on, 1 megabit-per-second tap into the internet backbone in downtown Atlanta, bought wholesale, costs an ISP $10 to $20 a month.” The ISP will then carry data from the tap to the internet subscribers. We are talking of only one megabit per second, but on a broadband network, internet carriers spread this number to serve around 40 DSL accounts – each running at 768 kilobits per second.

This means that to send data to each DSL, ISPs spends only about 25 to 50 cents a month per customer. This, of course excludes expenditures for the equipment (fiber optic lines and DSL or cable) that will bring data from the internet connection point to the subscriber. There are other expenses as well: sales, support, maintenance, and a whole lot more.

Henry Kafka, Bell South’s chief architect, let us in on the effect of downloading HD-quality movies. Excluding all other expenses, the monthly cost of delivering data to an average user – about 2GB – is $1. If the same user starts downloading around five TV-quality movies in a month, the charge would increase to $4.50. A soar to $112 monthly charge will happen if internet users suddenly start using internet TV like regular TV (around 8 hours a day). As Kafka said, “We don’t expect to get to the point where we’re charging anyone those kinds of prices for internet service, but it does reflect the kind of impact that high-quality video could have on the network and business models for providing the Internet.” This may also justify the extra charges being proposed by ISPs to ensure delivery of HD videos.

However, there is something to refute this reasoning. Analysts say that one megabit per second is being spread too much. ISPs are selling around 30 times more bandwidth to their end users than they can simultaneously connect to the internet. This is what’s causing internet traffic. Editor of the DSL Prime newsletter Dave Burstein says, “Traffic just isn’t moving up that fast.” In his opinion, internet video is still just a small fraction of the amount of video people watch, and this is unlikely to change overnight. The real solution here, he says, is to reduce oversubscription – which will be cheap to do so.

What will this debate lead to? Whose side will win? I guess we all just have to stay tuned and watch our download speeds.