Why are so many moaning about speeds?
The last couple of years has seen the average speed on our speedtester rise substantially, and if providers continue to upgrade people to a rate adaptive ADSL or ADSL2+ connection, this is likely to continue. Unfortunately the last 18 months has seen a dip in customer satisfaction evident in several surveys - why is this?
One possible reason is that with a whole new raft of broadband products due with the roll-out of the BT 21st century Network (21CN), many providers may be trying to avoid expensive capital expenditure in commissioning more BT Centrals to link into the BT Wholesale network, instead waiting for the replacement, Wholesale Broadband Connect (wBBC). When one considers that the larger BT Centrals carry a minimum 24 month contract, a service provider will need to weigh up the costs of activating this capacity that can support up to 32,000 broadband sessions, and the monthly fee, against the costs of being able to move a percentage of customers to wBBC once the trials start. Another option is for a provider to enter into wholesale agreements with LLU providers, and move a chunk of customers to a cheaper to rent LLU based service.
The new wBBC products are intended to be cheaper to run, with the cost savings of a fully IP network being passed onto broadband providers. To some extent you can see the potential savings if you look at the cost of IPStream services in 2008. For the new wave of video over broadband products, the price of backhaul from the exchange to a location where a provider can serve video data will need to drop substantially. Currently, most providers would fail to deliver streamed video if around 1.5% of customers tried to view content like this at the same time (this assumes a 1.5Mbps video stream).
This means as new services like YouTube, 4oD and BBC iPlayer grow in 2007, providers networks may creak a bit more, and other applications, if traffic management techniques are employed, could suffer. There is a fine line to be walked with traffic management as it needs to be invisible to the majority of customers. Where traffic management can go wrong is if usage patterns change quickly and a broadband provider has tried to avoid purchasing more capacity. It can take up to sixty working days for a new BT Central to be commissioned. Some providers do keep some spare capacity available that can be switched on relatively quickly (for example you can install a large 622Mbps BT Central but only activate 25% of its capacity).
Of course, us the public will always want the best possible service for the minimum price, and this is one reason why services like BT Vision are pay per view based or involve an additional monthly fee as this allows a provider to buy in extra capacity. The Tiscali TV service has a limit of 100 hours of content, with those who want no limitations paying higher fees.
Most people now pay a lot less for their broadband than they did a few years ago. The difference is that a lot of the freedoms to use it how we liked have been curtailed instead. For those wanting a return to those glory days, it is very much a case of having to pay for it. A great many of the products advertised as unlimited now rely on the average usage levels for broadband still being relatively low. If vast numbers of people utilised these products up to either the documented or undocumented fair usage levels, the provider would struggle to provide what most would feel are acceptable speeds.
If wholesale prices for backhaul do decrease significantly in the next couple of years, we hope that these do not fuel further price wars, but are used to plan sensibly for what are well sign posted changes in how people are using their broadband connections. The days of bursty web browsing with some low bit rate radio streaming are very last century. More and more people are using broadband in ways that requires hundreds of kilo bits per second for periods of an hour or two.
If enough of us do start watching a couple of hours of video per week over our broadband connections, then increases in the price of our connections may be inevitable to cater for this, even if the wholesale prices decrease significantly.